Boy, if there is one sweeping broad generalization I would make, it's be very, very careful when accepting investment advice from a doctor (dentists even worse). Seriously, I would be very skeptical about investing in a new company in the RMDY/VNTV/SCOP space for several reasons.
1) Reputation. The existing companies have built good customer reputations. It will be very hard to swim upstream.
2) Resources. The existing companies have deep pockets and large sales forces, infrastructures, etc. This is very hard (but, not impossible) to go against. In particular, for a large customer with a multi-site or otherwise complex implementation, the support and professional services resources are important. The relationships that the big guys have built with the Big 6, and firms such as Cambridge Tech. Partners, etc., are big edges.
3) PRoducts. They have good products. A new guy might also, but the existing guys have very large R & D budgets.
Now, this is not to say that there could be a very thin niche that a new player identifies and moves into, with a specialized product. But, I think it will be so specialized that it will be difficult to get a larger market share, and hence, a larger valuation. THere are always exceptions in every market, of course, I am just going with the greater odds. Even an inside straight gets filled every once in a while.
IF anything, I think you will see industry consolidation and companies either being acquired or dropping out. The big guys will get bigger, and the little won't.
This is really nothing specific to this industry - it is the way of the business world and a reality. |
