Are Juniper and HP doomed to follow Aruba?
Juniper Networks, Inc. (NYSE:JNPR), on the other hand, has attempted to boost its presence in healthcare IT by emphasizing the more robust security measures in its WLAN products. According to the Ponemon survey, weak security measures caused 63% of hospitals to suffer data breaches in the past two years; this caused BYOD bans to continue.
Juniper Networks, Inc. (NYSE:JNPR) is attempting to simplify networking in hospitals by assigning a single policy per user which works across the entire network. While tougher security and simpler procedures sound catchy on paper, they don’t substantially alter its original business of selling routers and switches.
Hewlett-Packard Company (NYSE:HPQ), on the other hand, has recognized the need for expansion into other areas of healthcare IT. It recently announced a major deal with healthcare IT giant Cerner Corporation to upgrade the data analytics that form the backbone of its EHR business. In addition to selling routers and switches that only generated 2% of its 2012 revenue, Hewlett-Packard Company (NYSE:HPQ) could expand its much larger HP Services segment that accounts for nearly a third of its top line to also cover the healthcare sector.
Companies like Aruba and Juniper Networks, Inc. (NYSE:JNPR), which primarily produce routers, switches, and WLAN access points, will be at a disadvantage against Cisco and Hewlett-Packard Company (NYSE:HPQ) which have more flexible business models.
While companies like Cisco have focused on building large enterprise Wi-Fi networks, Broadcom Corporation (NASDAQ:BRCM)’s WICED Direct allows OEMs to create wearable smart devices which can seamlessly connect and share data across the cloud. WICED Direct emphasizes higher performance coupled with more efficient power usage, making it an essential component in next-generation wearable health monitoring products.
Broadcom Corporation (NASDAQ:BRCM) noted that a study from Juniper showed that the smart wearable tech market could be worth $1.4 billion by 2014.
The Foolish bottom line
Just as telecom companies laid down the groundwork for the growth of the Internet, networking companies are building the infrastructure to help EHR companies flourish to optimize patient care.
More diverse companies like Cisco and Hewlett-Packard Company (NYSE:HPQ) might have an easier time growing their market share, while companies like Aruba Networks, Inc. (NASDAQ:ARUN) and Juniper Networks, Inc. (NYSE:JNPR) that are less diversified might struggle to maintain their profit margins. Other companies focusing on wearable tech, like Broadcom Corporation (NASDAQ:BRCM), are also worth following in anticipation of a new wave of wearable smart devices.
The article These Networking Companies Are Modernizing U.S. Hospitals originally appeared on Fool.com is written by Leo Sun.
Leo Sun has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems (NASDAQ:CSCO).
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