http://boards.fool.com/Message.asp?mid=13295564Gorilla Candidate?I believe the stock shows Gorilla characteristics. To be a gorilla a stock must conform to the following criteria and be a:1) Discontinuous innovation2) Proprietary open architecture3) Barriers to entry4) Switching costs5) Value chain6) TornadoMnemonic device: Don't Pick BS Versus Truth – from TekBoy1) Discontinuous innovation - Patients have had consultations in the past but this is something else. Virtual consultations for the chronically ill that benefits the payor, the carer and the patient all while reducing costs. It is the essence of discontinuous innovation and the cost savings will force the uptake. The invention is an enabling technology that will allow 3rd parties to exploit the secure medical network.2) Proprietary open architecture – the EHC has patents to cover its production and there are network patents pending. Add to this the patented HelpPath system that comes with every unit. Finally, this is a health network. They will be encouraging third parties to join.3) Barriers to entry a) Development - to compete you need a technology team and a medical teamwork together. Then you are going to challenge patents, see patents section above, or license the technology. You need approval from the FDA (typically 3-6 months) to sell your product and then HCFA ( need to complete a study, at least 6 months) to get reimbursement. You are going to compete against a product that has integrated its data feed into the hospital accounts admin (see accounts above). Then you are going to have to prove it works, lives are at steak.b) Infrastructure – Cyber-Care are producing an extranet, the Internet does not allow enough security, and the build out will need significant costs. Access to the network is through firewalls controlled by Cyber-Care, you will not be able to piggy back your service off their infrastructure. c) Nationalized Health service – many of the markets have a national health service, if they standardize on Cyber-Care you will have problems entering that country.d) Operational – if the network is successful, a few hospitals will get more work leading to an increase in specialization. The company that networks these hospitals will have an unparalleled expertise. In addition, doctors will be encouraged to free lance on the network. They will gravitate towards the network with the most work. Having the Mayo clinic 'on-line' was a strong reason for the Asian contract wins.4) Switching Costs - Once you have installed the Cyber-Care network. What would a competitor have to do to allow a hospital to move to another network?a) Integrating a new system is difficult. You need to confirm that the accounts system is workingChanging to another system will mean running 2 concurrent systems together, while maintaining the integrity between the two different databases, i.e. Cyber-Cares' and the new competing product. The system cannot be closed down as lives are at steak.b) Doctors/Nurses will be used to using Cyber-Care's system, a system they use to interact with the patients, to track their progress and outcome. They will need training to move over to another system. c) Administration – data is to be integrated into the hospital's accounting system. The integration will be using XML, I do not know if it will be a proprietary interface. d) Revenue sharing agreement on costs saved with AmericChoice is significant because you can only do this with further integration of the system. This will become a massive switching cost.5) Value Chain – this is yet to form. Cyber-Care is trying to stop manufacture of their EHC product and have the current competitors licensing their superior technology. In effect trying to turn the competitors into a value chain. It will consist of hospitals, HMO's, doctors, nurses. Other systems will be able to exploit the network to enable new functionality. 6) A Tornado – 100% revenue growth. There are no significant revenues from the EHC division as yet. This year we should achieve around $40 million from the rest of the company. Next year will be generated 81 million from the EHC alone. This is without any more significant orders or manufacturing build out. There are high switching costs and high barriers to entry. Ranged against this will be the buying power of health insurance companies, who dictate what treatments their patients will get. However, until there is a credible competitor both parties have the same aim, to save money. As the relationship develops there are reasons to believe the barriers to entry could reach Gorilla proportions on this new enabling technology.
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