Energy efficiency and protection of the environment has been a priority for the Danish government since the early 1970’s. A recent analysis shows that at least every other company in Denmark believes that green IT will have a large impact on their business in the future. With a general increase in focus on green technologies, the demand for green IT is projected see large increases in the years to come. The Danish market is receptive to a range of innovative solutions that facilitate a green IT profile and interconnect cost- and emissions savings.
The concept of green IT receives increasing attention in Denmark. Most Danish researchers agree that IT in general will play a large role in transforming climate statements into real solutions and transforming green into business.
Green IT is used in a variety of contexts and is not easily defined. This overview provides a holistic view on green IT, i.e. ICT solutions that facilitate environmental benefits. While sustainability is important to the companies, the associated infrastructure optimization and economic savings continue to play a vital role. Figures show that 70 percent of those who have employed green IT solutions list costs of energy as the primary reason. Furthermore, the possibility of future legislation and the need to improve efficiency and TCO all contribute to "greenness" being imperative for CIOs.
Denmark occupies a leading international position in the field of sustainable energy technology. Because of different sources of indirect regulation such as the green tariffs (Grønne Afgifter) and tariffs on energy consumption, Danish electricity prices are comparatively high, which enhances incentives to go green.
In 2008, the Ministry of Science, Technology and Innovation initiated the promotion of energy-sound IT use by citizens, companies and authorities. In April 2008, the Ministry published its "Action Plan for Green IT in Denmark".
The action plan contains eight initiatives divided into two main focus areas - greener IT use and IT solutions for a sustainable future. These areas concern the proportion of CO2 emissions stemming directly from the use of computers and other IT equipment (estimated to approximately two percent) and CO2 emissions in general (the remaining 98 percent). In December 2008, the Ministry published guidelines and an interactive guide on green IT for public authorities containing 27 specific recommendations aimed at helping public authorities and institutions purchase and use IT equipment in a more environmentally correct manner.
The Danish Council for Strategic Research allocated approximately USD 70 million to green IT research projects in 2009. The public sector has an objective of saving USD 30 million on electricity use over a three-year period through the purchase of energy-saving equipment.
Market Demand and Best Prospects
According to IDC, 35 percent of large European enterprises already rely on IT to drive a green agenda deep into their organization in response to macroeconomic changes, competitive pressures and existing inefficiencies in IT infrastructure. Throughout the green IT sector, demand is continuing to increase and progresses rapidly.
One of the booming areas is the consolidation and outsourcing of datacenters. The increasing demand for greening requires efficient datacenter suppliers with knowhow and economies of scale. Especially total outsourced solutions are in demand within the public and private sector in Denmark. The small and medium-sized business segment is considered particularly lucrative as the 'lean' aspect of green IT is highly applicable in terms of consolidation, standardization and improving overall energy efficiency of the IT infrastructure and datacenter operations. Some firms within the Danish green IT sector, such as CSC, already employ a holistic view in their approach to green IT operations with knowledge of datacenter operations combined with e.g. the reuse of excess heating.
Virtualization is also an area of high potential. Despite the economic headwind, virtualization uptake and penetration figures continue to rise in Denmark. Gartner Research and IDC rank virtualization as one of the top priorities for 2010 and predict a large increase in demand in the years to come. Both software and hardware virtualization solutions are estimated to play a key role in the continuing promotion and uptake of various cloud computing solutions, on a business-to-business as well as a business-to-consumer level.
As with virtualization, cloud computing is highlighted as being one on of the top 10 green IT investment predictions for 2010. The upcoming years will see a continuous development and maturing of the cloud services delivery and consumption model — which, for the past three years, has been identified as the most important transformational force in the IT market. According to IDC, a unifying theme for the developments of cloud solutions will be the emergence of "enterprise grade" cloud services — services that support the more demanding security, availability, and manageability requirements of traditional IT in the cloud services world.
In addition, the market for thin clients is growing at a rapid pace, with large scale deployments within the public sector such as in hospitals as well as within various private business operations. Other research is seen within smart house, smart grid and embedded software. Although Denmark is geographically small, the international engagements and collaboration between many national firms fosters an incentive to make use of telecommuting. Such technologies are already adopted, but the market is expected to develop further.
The market is dominated by many SMEs. Within datacenter operations and consultancy, some of the largest international suppliers that are present in the Danish market include IBM, HP and CSC. When it comes to cloud services, global firms such as Amazon, Google, IBM and Oracle take the lead.
Market Issues and Obstacles
Products have to adhere to existing standards and the CE Mark is required.
The Danish healthcare IT market is developing with rapid pace. Large consolidation projects within the Danish Regions, an ongoing effort to implement international standards, as well as large national projects all contribute to a high demand for a great variety of solutions. Best prospects include Telemedicine and The National Patient Index. While some obstacles, such as a language requirements as well as unfinished standardization projects, do hinder a truly international sector, the market does look promising for U.S. suppliers.
The Danish healthcare system is publicly financed with annual healthcare expenditures of approximately 14 billion USD. In addition, a relatively small sub-sector of private healthcare services is also present. There are more than 3,500 hospitals, pharmacies, home care agencies, general practitioners and specialists practicing in Denmark.
In January 2007, the regions and municipalities were re-established as part of a major reform of the local government structure in Denmark. Fourteen former counties were merged into five regions, and 275 municipalities were merged into 98 larger municipalities. The reform has (and will have for years to come) a major impact on the general IT market situation in Denmark. As a result of the reform, all local and regional authorities are struggling to get consolidated infrastructure, IT systems and strategies in place.
The definition of Healthcare IT in this report includes all patient-oriented IT. Infrastructure hardware and software, HR solutions, duty roster software, office systems and other administrative solutions are not considered. The current Danish healthcare IT sector can generally be segmented into the following entities:
Denmark’s early focus on building national networks for healthcare IT across the former counties resulted in an employment of many different, well functioning systems all relatively distinct from each other. According to a presentation by Digital Health, the scattered EPJ landscape and lack of strict government controlled coordination has resulted in the challenges seen in the Danish healthcare IT sector today. The early IT strategies did have a goal of developing and implementing a single, universal EPJ system for the entire Danish health sector. However, the strategy is now (2008-2012) to provide patient centric healthcare services across organizational boundaries with a focus on data security, regulation, standardization and applications. The idea of a universal EPJ solution has been abandoned in favor of a strategy towards a portal based system with a common frontend and underlying diversified solutions. This central index database will be called the National Patient Index (NPI) and will be a module-based structure built on privately supplied solutions from a range of different national and international firms. The goal is to create an index of meta-data where all underlying data is stored locally in their respective locations. The new regions are still in the progress of consolidating the many different solutions and it is forecasted that it will take at least another year or two before the consolidation process is complete in all regions. Subsequently, effort will be made to adapt the various EPJ solutions to the common HL7-based NPI database which will require various gateway and infrastructure middleware to be acquired from private vendors.
In Denmark, EPJ financing vary from local to national levels. Regions and Municipalities own their healthcare institutions and finance their EPJ systems themselves. State and Associations of Local Authorities either finance or co-sponsor central or cross-sector services and projects. GPs act as individual business units and purchase their own systems.
In Denmark, early efforts to exchange data used EDIFACT as the primary standard for electronic communication. Since then Denmark has initiated the use of XML standards for data exchange. The Danish government has also focused on translating and distributing the SNOMED CT nomenclature. The government spent EUR 2.7 million to translate SNOMED CT and will in the future make it available to health IT vendors to implement in systems. According to MedCom there is an ongoing further implementation of HL7 in all solutions throughout Denmark. This is done to ensure easier import and export of healthcare IT solutions.
Market Demand and Best Prospects
Danish Regions, Digital Health and The E-health Observatory (E-sundhedsobservatoriet), which is a organization with a large advisory group of the most prominent Danish experts in the field of healthcare IT, have all emphasized Telemedicine as one of the most important and promising prospects in the Danish healthcare IT market. This demand spans across the different segments within the market, both covering the primary sector with home care activities as well as the hospitals. More specifically, home monitoring is expected to boom in the coming years which will enable a large amount of chronically ill patients to be permanently discharged from the hospital. In addition, telemedicine has received a high level of attention both at a national level as well as at an EU level, with subsidization from both parties. If U.S. companies can provide solutions that integrate with the common national and regional platforms, these should have good potential. In addition to subsidization, the telemedicine field has comparably lower development costs than other fields within healthcare IT.
As prioritized by public authorities, demand for new solutions that support the natural consolidation progress within the regions is also increasing. There is an increasing demand for integrating the private GPs and private hospitals in the NPI and other national solutions. Especially IP-technology based middleware solutions are in demand, and the demand is not technology driven but rather driven by specific problems in specific situations. This calls for tailor-made software solutions that comply with current standards, but fill out holes in which IT solutions are not sufficiently in place already. It is estimated that the daily use of IT and EPJ solutions still lacks in around 30-40 percent of all hospital departments.
On a larger scale, the NPI solution is estimated to go into a formal public tender around July 1, 2010. According to Digital Health, the project will have a value of approximately 50 million USD. The NPI will be implemented gradually which enables a multi supplier environment. Danish guidelines stress that international suppliers must be given the same attention as national bidders.
In the newly passed national budget for 2010, it has been decided to build a large new hospital in the mid-western part of Jutland. In addition, there is an increasing demand for single sign-on solutions. As of the end of 2009, 60 percent of the regions have not implemented a solution, but all the regions have committed to a common goal of having single sign-on solutions ready by the end of 2011. The most widespread solution today is a system with ID cards and thin clients.
CSC Scandihealth and CEDI (Center for Digital Government) estimate the total market size to be around USD 250 million. This number excludes the market for basic IT and therefore complies with the definition of healthcare IT stated above. According to projections made by CEDI and Digital Health, this figure is expected to grow to around USD 300 million in 2011.
The adoption of healthcare IT solutions is widespread across sectors in Denmark. Within the Primary Care, 95 percent of the GPs use EPJ systems. The corresponding figure for the Danish hospitals are harder to determine, but it is estimated that around 35-40 percent of the departments at the hospitals use EPJ systems. The GPs within the Danish Primary Care were initially slow in adopting the use of Electronic Ordering of Laboratory Tests and Electronic Prescription Services, but with directives in place which lowers reimbursement for those not facilitating these e-services, around 80 percent have adopted the use of Electronic Ordering of Laboratory Tests and almost 100 percent use E-Prescribing.
In order to enter the Danish healthcare IT market it is essential to create a local presence in the country. This is needed in order to participate in collaborative partnerships with potential buyers and in order to gain valuable knowledge of the demands within the sector. In addition, both private vendors and public organizations such as Digital Health have expressed that being present at national conferences on healthcare IT, such as The E-health Observatory´s annual conference, is highly rewarding for all involved. It is also important to get approved by MedCom as quickly as possible in order to be properly acknowledged by potential buyers.
One of the most essential requirements is Danish language. Within the healthcare IT sector, there are strict rules of translation where only symbols and short common words are allowed to be in English. Danish Regions estimate that language localization is one of the biggest barriers of entry. Within the Diagnostic Imaging (RIS/PACS) sector there is an international market with vendors who are not locally present and who do not customize products specifically to the Danish market, but Danish language is still a requisite in many cases.
Market Issues and Obstacles
The MedCom standards for interoperability create a need for customization of an international product. Together with the requirements for the implementation of Danish language in software solutions, this is a significant barrier of entry which will require a substantial amount of dedicated resources.
Another important issue is the unique patient identifier used in Denmark called the CPR number. Several reports, such as the ITIF report, highlight the fact that the CPR number provides a good foundation for the data grid backbone and gathers all patient specific data under one ID. As such CPR system is not in use in the U.S. this could require further customization of U.S. solutions as solutions in which patient data are handled must be able to integrate with the CPR system.
As of 2008, all Danish public institutions must comply with the Danish Information Security Management System (ISMS) called DS484 which is built around the ISO 27001 international standard. This implies that all healthcare IT solutions for the hospital sector as well as most of the solutions for telemedicine and home monitoring must comply with this standard.
Danish Regions note that relatively large and detailed requirements for reporting to central registers combined with the CPR system and language requirements are the most dominant reasons for the lack of big international suppliers on the Danish EPJ market.
Computer Software and Information Technologies (CSF)
Denmark is a highly computerized society with a large and steady demand for state-of-the art software and IT products. The total market is around USD35 billion in, and the market is estimated to increase slowly in the coming years. Local software producers are quite successful, but are often lacking the resources necessary for continued growth on their own. They are, therefore, increasingly entering into strategic alliances with foreign system vendors, most often from the United States. A recent example is the Danish-based software manufacturer Navision, which in May 2002 was purchased by Microsoft for almost USD1.75 billion. Thus, neither local production nor third-country suppliers appear likely to threaten the dominant position that U.S.-brand software has in this market. Both the import and export of IT products have only increased slightly over the last year, but over a five-year period, there has been a steep increase. More IT products have continually been imported than exported. Imports of IT products rose from USD 4.5 billion in 1996 to USD 8.4 billion in 2004, corresponding to an increase of more than 80 percent. Exports rose from USD3.0 billion in 1996 to USD 6.6 billion in 2004. New-to-market companies will face serious competition from long-established U.S. companies. In a market with few independent importing agents and distributors, new-to-market companies should be prepared to establish a wholly-owned subsidiary or sales office in-country.
The Danish ICT sector is structured towards a service market rather than a production market. A new market analysis of the IT sector by the Danish IT Trade Association predicts even better times ahead with increased orders, growing production and new jobs as a final proof that the industry is coming out of its slump.
Outsourcing of IT functions and software development in the public and private sector is a big growth area. The Danish market for IT outsourcing was DKK 8.4 billion in 2005. .According to a recent survey, more than 50 percent of the existing IT outsourcing agreements in the public and private sector are due for renegotiation during the coming years. The contracts are expected to be worth DKK 3 billion (USD 500 million), although the majority is expected to keep their existing suppliers.
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1 big bottle of Carlsberg in front of the Radhuset (City Hall)