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E-Health's Second Mover Advantage

Executive Summary

The revolution that the Internet is bringing to hospital supply is really two revolutions, one transaction-oriented, the other information-based. MedAssets hopes to capitalize on opportunities in the transaction-based realm by, in effect, applying Internet technology to two relatively traditional service businesses, group purchasing, and capital equipment refurbishing and resale. MedChannel, by contrast, is trying to create an infochannel that promotes wide efficiencies across a broadly defined supply chain, from OEM to end user. Both companies face a challenge: that of coming late to a B2B e-commerce market that is evolving rapidly. Their hope: a kind of "Second Mover Advantage", under which the early B2B leaders open doors to customers that both companies can more easily walk through.

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Burden of Proof

Early efforts to define the opportunity for e-commerce identified the problem--an inefficient hospital supply chain--but failed to prove that e-commerce is necessarily the answer. Now, Novation and Neoforma, a leading hospital group and its e-commerce partner, have released an industry-wide look at Internet-enabled supply chain economics, done by consultants Arthur Andersen, hoping to prove the value to both providers and suppliers of widely implemented e-commerce.

In E-Health, MedAssets Bulks Up

This latest acquisition by e-health's MedAssets underscores how important established players like GPOs are in promoting an Internet-enabled hospital supply chain. In fact, MedAssets was arguably the first major e-health player to recognize that GPOs are not only vital for the base of customers and suppliers they bring, but can also be attractive sources of revenue.

Vamedis: Bringing the Old World into the New Economy

Just when you thought the party's over in Internet-enabled e-commerce, Vamedis is staking a claim for leadership in Europe's B2B supply chain space. Over the past year, the European marketplace hasn't been much friendlier to dot-coms, particularly B2Bs, than the US marketplace has been. But far from a venture-backed start-up, Vamedis is banking on leveraging the entrenched market positions of seven of Europe's leading hospital supply companies.

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