Hello MADX, certainly no competition intended here, not least given we are all (in the main) invested in this company and want it to excel! I think my earlier post was more about taking stock of some potential share price catalysts in light of the announcement, more so than the content of announcement itself.
In my view, there may well be some merit in you uptake accelerator proposal.
Some commentary, if I may, regarding the matter:
1. This idea of product “stickiness” is frequently mentioned in this forum; once embedded, I could indeed imagine that medical informatics systems and software would remain in place for some time. The frenetic pace and “24 / 7” nature of hospitals and health issues experienced by their patients (and consequentially the duties of doctors, nurses and other staff) I suspect would make it seriously impractical to overhaul pre-existing systems, where even a momentary slow-down, inconvenience others glitch could potentially mean the difference between life and death for some person.
Hence I take the view that each LHD, NHS Trust, private organization or hospital with whom ALC signs a contract for one or more of the offerings in its product suite is likely almost always to represent a significant achievement - and furthermore that there may be a genuine likelihood that product will then remain in place for an indefinite period thereafter.
2. Having regard to (1) above, it logically follows that ALC’s clients and prospective clients are only all too aware of this state of affairs and the product “stickiness” to which frequent reference is made. Accordingly, when considering whether to take the major step of potentially acquiring and implementing something new, I can only imagine the level of administrative “red-tape” that would need to be cut through, the reviews by committee, quality assurance checks and extensive stake-holder consultation processes that would be required before a contract is signed.
I believe it is very likely that the cost of the products themselves may be the least concern of ALC’s customers (just take a look at some of the money available in this sector; for instance the approx. $30 million Cerner / HealthShare NSW contract I located on eTendering NSW recently) when considering the adoption of their technology, particularly in the context of what they may already be spending in that area - and noting also they would presumably looking at new technology that may, in theory, save them money via benefits and efficiencies that will flow from its use.
3. I guess the upshot of what I am trying to say in so far as your uptake accelerator idea is that:
- when an LHD, NHS Trust, hospital agrees to contract with ALC for one of its products, it is likely because a significant amount of time and effort has gone into the decision to adopt the usage of a particular product and it fits their specific needs; and
- The cost of ALC’s entire suite of products is perhaps unlikely to be the primary issue. By reason of this, on balance, I suspect that adopting further tech / software simply because “it’s free” will not enable health care providers somehow to bypass the rigorous processes they must usually go through before they can approve the same and integrate it into the systems on which they rely in upholding their duties of care to patients and staff alike. Accordingly it is unclear that making products available free of charge will result in greater uptake of them by existing customers.
4. By way of general comment, I also think that: (a) good things are usually worth paying for; and (b) that is inherent in our society (rightly or wrongly I might add) to associate quality with things that are commensurately expensive. As such I personally consider that ALC should charge full-tariff for the on-selling of its additional products where a customer has already adopted one of its others.
This is to be distinguished, however, from ALC’s more recent provision of the COVID-19 dashboard free of charge to existing customers, where I understand this was by way in effect of an “addendum” to the product those customers were already using, rather than an entirely separate from ALC’s broader suite.
5. Notwithstanding the above, in so far as the uptake accelerator is concerned:
- I can see that it may help in giving some customers a useful “nudge” in the right direction of ALC’s broader product suite (or services), where they may already be considering a change, upgrade, improvement or be dissatisfied with their existing systems.
- It may also provide the opportunity for ALC products (or services) to be trialled by customers who might otherwise not even have been contemplating or looking to adopt anything further of that nature, and who may then realise the material benefits that might flow from them expanding their technology or that the trialled product has all of a sudden become “indispensable”.
So, overall, I can see both pros and cons of your proposal MADX (and thank you for sharing it in this forum, gives us a lot of food for thought). This is all speculative of course, and I think those who work at ALC would be best placed to comment! Hopefully others might chip in their comments too.
Best.
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