Software Business in the Middle East

Part 1.
Part 2.

Some time back we sent a quotation to a hospital. They were fine with the price so I thought we were about to get a nice payment soon. All wrong!

In fact, we cannot sell our drug database directly to a hospital if they have Hospital Information System (HIS), because nobody there will use any other software other than HIS. Instead, we have to sign a contract with HIS vendor to integrate our drug database with their system, so that doctors and pharmacists get clinical alerts at the time they prescribe or dispense medications.

HIS vendor will not integrate their system with any other software if there are no benefits for them. So in additional to offering their customers new features, they get sales commission. It is fine for both parties – they get additional profit, and we do not have any headache with the first line of technical support. Also, we would be able to reach all other customers of the same HIS vendor without any serious marketing and sales efforts from our side.

So what we finally got – the customer was happy with our prices and we sent all the papers to the HIS vendor to finalize the agreement. After couple of weeks they called us back saying that the customer did not agree with the price. What? Fine, we’d adjusted the price a little bit more. After a while the HIS vendor called back again – the prices were still too high. I called to the hospital to understand what was going on. It was interesting to learn what actually happened.

HIS vendor simply tripled our price. The arguments were that they would need to integrate stuff, and, I guess, they just wanted some more money. I could understand increasing the price for 10% or even 20%, but tripled price?

The negotiation between the hospital and the HIS vendor has already been ongoing for the past nine months. The hospital now considers even the option to get HIS from another vendor. The problem is that as soon as you are locked in with one HIS, it is very difficult to migrate to any other system. We will see what happens next.

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