Symantec (NASDAQ:SYMC) recently announced the launch of a hosting service designed to let health care providers store, archive, and share their medical records using Symantec’s remote storage facilities.
The company’s new Symantec Health service is designed to help hospitals and health care companies reduce the costs associated with housing medical records. As health care firms are forced to keep more image-based files (such as lab tests) for longer retention periods, their storage costs have soared.
The Symantec Health service will offer a cloud-based storage environment where companies can budget and pay only for the storage they need from Symantec. We believe that this new offering can spur further growth in Symantec’s Software-as-a-Service (SaaS) business which we estimate constitutes 4% of Symantec’s stock currently.
Security and Easy Sharing Key to Symantec Health
Symantec Health will incorporate two different components: Symantec Health Safe and Symantec Health Image Share. Symantec Health Safe will handle the image archiving, and provide the necessary security to keep those images safe and protected. Symantec Health Image Share will take care of the file sharing, letting medical providers access and view the stored records.
Symantec Benefits from Health Care Industry’s Focus on Cutting Costs
Symantec’s Health product will help hospitals deal with the high cost of health care. The average health image file now ranges in size from a few tens of megabytes to several hundreds of megabytes. This is pushing up the costs for the industry despite the fact that storage hardware costs have come down drastically over the last few years.
The service will also allow health care providers to share their reports and images with hospitals and doctors over the Internet. This is an alternative to the CDs and DVDs that many companies now use to send out reports, and will further help save costs.
Software as a Service Constitutes 4% of Symantec’s Stock
Symantec Health falls under Symantec’s Software as a Service (SaaS) business which includes antivirus, backup and email security software delivered on-demand as a service over the internet. With SaaS, customers pay only for the product license which they want to use, and not pay for the whole security package.
For example, a customer may only pay for the basic anti-virus security and not necessarily buy the complete security package which may include backup and email security.
Furthermore, SaaS saves companies money by reducing the amount of time their in-house IT departments need to spend on updating software through new installations. Access to the latest software on-demand helps reduce the total costs of software ownership.
Symantec Health Could Drive Symantec SaaS Revenues
We estimate that the Consulting and SaaS revenues for Symantec could increase from about $0.5 billion to $1.1 billion by the end of the Trefis forecast period. You can modify our forecast above to see how Symantec’s stock would be impacted if the SaaS revenues were to grow faster than we forecast as a result of demand for Symantec Health.
For additional analysis and forecasts, here is our complete model for Symantec’s stock.
