TDOC & Microsoft to Collaborate

On July 14, Teladoc (TDOC) https://www.teladoc.com, announced a collaboration with Microsoft https://www.microsoft.com, where Teladoc’s Solo platform for hospitals and health systems will be integrated into the Microsoft Teams environment.

Both companies will dedicate engineering resources as part of the collaboration and aim to deliver providers a more seamless and unified experience by leveraging data, artificial intelligence, and machine learning. 

Credit Suisse https://www.credit-suisse.com, analysts briefly caught up with TDOC management. The company notes that there are a lot of interesting capabilities the companies can work on together and for Teladoc to be able to leverage their own products.

Importantly, TDOC sees their partnership with MSFT expanding over time. Recall that TDOC uses Microsoft Azure as one of their cloud providers as part of their multi-platform approach to the cloud.

Credit Suisse analysts explain that while near-to-medium term financial implications should be small, they view this as a highly important strategic move for Teladoc. While TDOC has the leading presence in the employer/health plan telehealth market, the company is relatively less penetrated in the provider telehealth market (unlike Teams that have strong market share in the provider market.)

Notably, Credit Suisse’s Investor Sentiment Survey published July 14, 2021, respondents cite growth in the provider telehealth market potentially offsetting growth in employer/health plan channels as the most important concern for Teladoc. This collaboration with MSFT should suppress some of these concerns.

Additionally, analysts see the TDOC/MSFT partnership putting TDOC in a better strategic positioning by having a big tech company partner. As for logistical details, there are no revenue share agreements between MSFT and TDOC, but both companies would  dedicate engineering resources to the partnership.

From the providers’ point of view, there are no changes to licensing requirements, as providers will still need licenses to both Teladoc Solo as well as Microsoft Teams, (granted the Microsoft suite of services is already prevalent in many health systems across the country.)

Providers will have the ability to stay within the Teams environment to access their Teladoc Solo workflows, data, plus the InTouch network, in addition to accessing clinical data from the EHR through Teladoc Solo’s integration with EHRs. 

For information on the Credit Suisse note, Teladoc & Microsoft to Collaborate: Thoughts after Catch-Up with Management, ask questions, provide feedback or news, email Jailendra Singh at jailendra.singh@credit-suisse.com or call 212-325-8121.

 

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