Oneview Healthcare PLC (ONE) Earnings Call Transcript & Summary

Good morning, everyone, and thanks for joining us. This morning, we are joined by James Fitter, CEO of Oneview Healthcare. Oneview is a stock couple within our access research team here at MST, and we recently published a note following the announcement of Baxter value-added agreement -- value-added reseller agreement. We considered in our published research at the scale, reach and quality of this agreement was much than we could have guessed following the teaser from one of you following that ASX share price inquiry. So just before we start, just to point out, I mean, if you do have questions for James after his presentation, please feel free to put them into the chat below, or if you prefer, please e-mail them to me at [email protected]. So with limited time available, let's go on with it. James, congratulations on the agreement, and we're keen to learn more. So welcome.

Thanks very much, Dan. Much appreciated. Good morning, everyone, in Sydney. Thanks for joining on a Friday morning. So just let me get the right -- share, choose this one, and we'll get going. That looks more like it. Terrific. Everyone can see that now, I hope.

Yes, we have you, James. That's great.

Great, fantastic. So just the first, obviously, legal disclaimer around forward-looking statements. We obviously won't be making any -- anything we'll talk about will be in the public domain. And as Dan mentioned, this call is being recorded and will be available on our website later today. We are still domicile in euros unless otherwise specified, and we are at calendar year-end. So just to remind, any references to year-end will refer calendar 2023. So I'm quite cognizant that some people on the call are not overly familiar with what we do. So if you'll allow me, I'm just going to do a quick refresher on what the key value drivers of the business are; talk about how we navigated the pandemic; obviously, an update on the Baxter VAR to the extent we can. I want to talk a lot about BYOD proposition and also some developments on the competitive landscape in Australia, which some of you may already be aware of. I'll try to get through these slides pretty quickly and leave a fair bit of time for questions. So at the heart of it, Oneview is really bringing together these 3 critical members of any hospital admission, which is, of course, the patient themselves, their family and their care team. And I guess if there's one thing the pandemic told us, it's just how hard it is to bring all these to disparate stakeholders together. It's a single unified platform on -- typically on hospital-owned devices. And this is why BYOD is such an important driver for us because up until now, all of our hospitals are buying hardware to support the deployment of the Oneview platform. We'll have a quickly what that looks like in a second. So we refer to the product as the Care Experience platform. The reason for that is exactly that. It's -- as the name suggests, we're trying to provide Oneview into a whole bunch of disparate systems that typically don't talk to each other. It's a unified technology platform that provides a visualization layer into a series of very deep integrations. And really, this is the mode of the business. The business was founded here in Dublin in 2008. So we've been going for 15 years now. I joined the company in January 2013. At the time, we were a 10-person startup with no revenue. So we've gone from a very humble beginnings to something that now includes 3 of the top 20 hospitals in the United States as customers. It is our breadth of content and our platform and analytics that really drive value for our customers. We have a very sophisticated data platform that allows us to understand exactly how the patients are interacting with the technology platform whilst they are hospitalized and able to share that information with our customers on a real-time basis to help them change the product offering, which includes both content that we build ourselves, but increasingly, content coming from other providers. At the heart of it is an open architecture. So we need to be [ swift lane ]. We need to accommodate different hospitals' requirements. So the integrations, for example, with electronic health records, we obviously cater to Epic, to Cerner, to Allscripts to MEDITECH. The good news is that MEDITECH in the United States is fairly oligopolistic. So once you've built the 4 or 5 integrations, you tend to cover around 80% of the addressable market. So it's very impactful from that point of view. I want to talk a bit about navigating the pandemic because, I mean, so many industries and so many of us were touched in different ways by the pandemic. But I don't think it's sort of the statement to say that no industry was more affected by the pandemic than the hospital industry, which obviously represents 100% of our customer base. We only focus on hospital clients today. And obviously, they were focused primarily on saving people's lives. And it's been quite a journey, which we're going to have to look at, in a second. So our first response was to ask our customers what can we do to help. And almost all of them said, it would be super helpful if we could use the technology that we already have at the bedside to enable some form of video communication, whether that was through things like Zoom that we're using today, Teams, Cisco Java, Facebook Messenger, it didn't matter. We just wanted to get some form of 2-way communication between the care team and the patient. That was primarily to save on PPE and prevent the care team from having to go into acute hospital rooms unnecessarily. And that led to the inspiration to develop our Cloud Start program with NYU Langone as our first customer. That was a huge success at a time when New York was very much in the epicenter of the pandemic, where we deployed 400 tablets to 4 new hospitals for them. As we sort of look back on it, the pandemic really has validated the value proposition of bedside technology in a hugely meaningful way, and we'll talk a bit about that in a second, but really around new hybrid models of care. So we're all obviously coming from different corners of the world this morning, and that is true across every industry and something that's really starting to have a huge impact on nursing. Our core hypothesis. The pandemic, obviously, has had a terrible impact on our top line growth. Notwithstanding, we grew our contracted book of business by 50% during the pandemic, we haven't necessarily been able to convert all those beds because we had restricted access to hospital rooms. But we've been hearing for the last 12 months that patient experience was going to be a big priority, as hospitals in 2023 that they had set aside budget for bedside technology. And that was validated by our first quarter where we had a record net new customer acquisition with 3 new logos. What's interesting about these 3 new logos is that all 3 of them, the executive sponsor that is buying Oneview is someone who has come from an organization previously that also deployed Oneview, which is the ultimate validation that they have gone to a new health system, and one of the first things they've chosen to do is to deploy Oneview. So this is a pretty busy slide from a pretty forgettable period of time, which, of course, was the 3 years that we were effectively locked out of the market. And the slide is designed so that below the line, we are showing what we were doing during the pandemic to try and make sure we had a business that was better, more scalable coming out of the pandemic. And on the top line of the commercial milestones we were able to achieve despite the fact that we were in a pretty challenging period. So as I mentioned, the first thing we did was launch our Cloud Start program. And when we say Cloud Start, that was simply the ability to deliver a solution which brought both entertainment and video communication to the patient bedside. We didn't have the context of the patients. So all we knew is what room the tablet was in, and we have the ability for that tablet to auto us a call from the care team outside the room. And that was the genesis for our team to say, look, we need to try and lift our entire product to the cloud. Health care has been a very slow adopter of cloud technology, but the pandemic has been the catalyst to change that. So it took us just over 12 months to migrate our entire product to the cloud. And the important part of that, of course, is the ISO certification, which is the security framework, which gives us the confidence -- it gives our customers the confidence that we can manage the private data in a positive way. That was a huge lift for the organization. And then we also went through the process of validating new set-top boxes and all-in-one devices, which again provide a range of different deployment models. And we launched the first version of our digital door sign. On the top line, you can see we signed a number of new logos, but we also managed to renew a very large portion of our business, including Epworth in Australia. And 2 of our largest customers, BJC in St. Louis, we went from a 1,000-bed deployment to an additional 2,500-bed expansion in the middle of the pandemic, the largest contract the company has ever signed. And NYU and Langone, doubled their deployment from 1,000 beds to 2,000 beds. So the fact that customers are both expanding and extending contracts, I think, voice to the stickiness of the business. So as I said, despite the challenges, I think we achieved a lot. We also managed to keep together our entire leadership team throughout the pandemic and to this day, which in the face of the great resignation, I think it was a really important achievement. So this is just quickly update on our logos. I think that these kind of speak for themselves. Looking at this slide, you could be excused for thinking that the business was evenly balanced. It's not. Over 70% of our business is now in the United States. That number is going to continue to grow as we continue to move forward, particularly with the Baxter agreement. Also helps when -- we're seeing continued consolidation in the United States. And as I mentioned, BJC is already our largest customer with 3,500 contractor beds. BJC owned a group called the BJC Collaborative back in 2012, which is a group of health systems in the state of Missouri and Illinois. Originally 4 systems at which St. Louis was one of the founding partners with BJC, further 4 systems joins. So there's now 8 systems representing nearly 50 hospitals. And BJC and St. Louis have announced this intention to merge. We don't want to be presumptuous. But we do know from all of our customers that they want to have, including BJC, they want to have an equitable experience. They don't want a patient turning up at 1 facility, I think it's very modern, sophisticated experience on Oneview, and then going to an older facility, where it's back to the 1970s and TV only. So again, absolutely no guarantee that this merger will go through, firstly. But secondly, not necessarily that they'll standardize on us, but I think there's a very high probability that they will in the fullness of time. So a quick reminder of the 4 kind of places we're really focused. So the genesis of the business was the tablet and the television, which you see in this picture. But the pandemic has exposed 2 new business opportunities for us. One is the My Stay overview Board. You think of this as being the digital whiteboard. So if you turn up at any hospital room in Australia or in the United States that you undoubtedly see a white manual market board, which during the pandemic was tended to be overlooked because nurses were too busy to update the board and therefore, didn't feel like to rely upon on it. So the increasing trend is to either have a separate digital board, separate monitor adjacent to the TV, which surfaces all the precautions for the care team when they walk in. Or alternatively, our preferred mode is to actually launch that whiteboard as a separate tile on the Oneview platform. And then in a similar vein, the Digital Door Sign outside the room is almost always now included in RFPs where, again, we're providing visual cues for the care team through our integration with the electronic medical record that are providing precautions around the patient's condition before the care team enters the room. So this has been the -- perhaps the most important slide in sense of what the pandemic did, which was, first of all, ask -- our patients asked to bring that video onto the tablet in the room. That was a quick fix, a band-aid kind of solution because the tablet is not the most stable device. It might be facing away from the patient. So almost every conversation we're in now is in this immersion category where the hospital is looking to deploy a camera with a speaker and a microphone on top of the television that is connected to the Oneview set-top box and allows us to interchange between the patient experience. So a patient might be watching the cricket or the footie, but the care team want to remote into the room. We get a message from the telehealth provider. It could be any one of people like Agility, Amwell, Teladoc. There's a whole host of players in this space that we build integrations with. We pass control of the television to the telehealth provider. The provider conducts the call with a patient and also allows for things like virtual nursing and virtual patient observation. This is a huge driver. I just got back from Washington this morning, where we've been in another very large health system. What we're hearing pretty much across the U.S. now is the health systems want to get eyes and ears in every room in order to enable remote patient monitoring, and that's something that has really changed the value proposition of what we do. And the future state of that is that we may not even need a human to be monitoring that patient. It could be done through computer vision. So we're working with a partner in that space as well that is going to allow high-risk patients to be monitored by technology rather than a human, which is obviously a huge driver of workforce efficiency going forward. So let's talk about the Baxter VAR, which is hot off the press. And I think Dan has done a very good job of articulating the significance of this in his research. But suffice to say, we are beyond thrilled to be partnering with Baxter. This has been a competitive process that began in October 2022. So it's been going on now for nearly 9 months. They went out to market following Baxter's acquisition of Hillrom. As often happens with these large mergers, there was a review of their portfolio. They made some portfolio decisions around their connected care platform, where they decided to end of life certain product offerings. And as often happens, the market changes. The pandemic has perhaps changed the emphasis on some of those requirements. So Baxter went out to market in search of a partner that could provide the care experience capabilities, which we have, to help broaden their portfolio. So obviously, Baxter doesn't need too much introduction. They are a super impressive organization, have been an absolute pleasure to deal with. That project is literally kicking off this week. We've already had a number of calls with their teams. And we will be in next quarter going through the collaborative marketing and development of this product. But suffice to say, their reach in the United States is pretty much unprecedented. If we wanted to go out and handpick a partner to help us broaden our access in the United States market, I'd be hard-pressed to think of someone who would be more suitable. So Hillrom Holdings was formerly a New York Stock Exchange listed company, which was acquired by Baxter. In December 2021, they are the dominant provider of hospital beds in the United States with a market share depending on who you -- which all of you read is somewhere between 50% and 70% of the hospital bed market. But more importantly, they have this Connected Care division, which brings nurse call and unified communications to a very large sector of the market as well. And it's that portion of the market that will be the key focus for us initially. That business has around about a 25% market share of U.S. hospital beds. So as we mentioned in the release, Baxter are confident they can bring between 3,000 and 5,000 additional beds to us on a go-forward basis. That would represent a very small portion of their installed base in the United States. And I think this is a classic case where 1 plus 1 is going to equal meaningfully more than 3. And we also have incentives in the agreement for them to take on more of the professional services piece as the partnership grows, which will free us up to run capital light and really focus on building great software and pass some of the implementation burden across to Hillrom, which is going to be pretty exciting for us as a business going forward. So very early days. But as I said, we couldn't be more excited about the impact we think this can have on our business. The second thing we spent a huge amount of time on in recent months has been the idea of a bring your own device product. So suffice to say, this is something that the market has been asking for literally for as long as I've been with the company because there's been a sense of why can't patients use their own mobile phone to access the offering. So for hospitals, obviously, we know budgets remained under intense pressure, particularly on the CapEx side. Deploying custom hardware in hospital rooms is particularly disruptive. So not only in order to house the tablet, you either have to put in an articulated arm or you have to install the device on the meal tray on the table. It is disruptive. It's time consuming, as we discovered during the pandemic. If hospitals are closed to vendors, we can't actually deploy our hardware. And then supporting OEM hardware at the bedside adds real complexity for both ourselves and our customers. Also supporting multiple hardware formats and multiple Android versions, for example, is something that is time consuming and puts further burden on our engineering teams. But the real key here is reducing that hardware and installation costs. So it's not just the physical cost of buying the arm, installing the arm in a unionized labor market like Chicago, to install an arm or a television in a patient room can cost upwards of $1,000 a room. That's after you bought the hardware. And most importantly, in order to install the hardware, you have to shut the room for at least 24 hours and potentially 48 hours. So it has a hugely disruptive impact on the ability in clinic care at a time when census is running very high in the United States. So vision here is that we can take that off the table, allow the patient to deploy on their own solution. So we spent the first 4 months of this year validating this approach. We developed a product, which we then went and tested with both existing and potential customers and with user groups, both in the United States, Australia and Europe. And the feedback has been unanimously positive. We had 2 of the top 3 hospitals in the United States offer to be co-design partners for this product, which then tells you how much they appreciate the direction we're going. We plan to bring this product to market initially in Q4 of this year, so before the end of the year. And the benefits, I think, are fairly obvious for the patient. Obviously, it's -- there is -- we live in a world now where, obviously, everyone is driven by their own device. And particularly amongst the younger generation of patients, it was unanimous that they want to -- much prefer to use their own device than use a hospital supplied device. But to give you a sense of the reduced hardware costs, if we take a typical 250-bed hospital, if they were deploying Oneview, they would need to incur a capital expenditure somewhere between $750,000 and $1 million and then be paying us a license fee for a 5-year period. That obviously makes much more complex to get through capital budgets. When we move to a BYOD solution, we think we can dramatically shorten the sales cycle. It's going to lower procurement barriers. It won't need, for example, a decision like this probably won't need to go to the Board, it's something that could be handled at a lower level of procurement. And it's super important for us. The implementation and the reason we haven't done this before, I should have stressed, is that until we got in the cloud, we weren't really in a position to develop this capability. It's the fact we've moved to the cloud. We have got ourselves ISO-certified that allows us to bring this. This will be cross-platform. So wouldn't matter whether the patient is iOS or Android. There won't be native apps. There will be micro apps, so it will be much easier to deploy and maintain from our perspective. And it also opens us up to the full continuum of care around preadmission and post-discharge, which is something that is again a global trend that I'm sure Dan and Andrew are hearing as they travel around the world, that hospital and home is where most major health systems are trying to drive their business. So this gives us that mobility. It gives us an omnichannel delivery methodology. And it should have a material impact on our sales cycle, which really, if we're being honest, is the hardest thing about this business. It's super hard to get in, is the bad news. The good news is once you're in, it's very, very sticky. But this, I think, we'll talk about existing customers. All of our existing customers see this as an add-on rather than an alternative. So if we think about customers like NYU Langone and BJC, they see the in-room experience has been part of their competitive differentiation. They simply see this as an additional modality that will drive value for existing customers. So we engaged some outside consultants to look at the market and try and assess what that market opportunity looks like and which markets would make sense for us. We see the BYOD market as a $1 billion addressable market for Oneview. We've looked at 5 specific markets: United States, Australia and Canada are all obviously markets we're very familiar with. So that work was fairly easy. But this is a really interesting opportunity for the U.K., which is obviously a neighboring geography for us here in Ireland, a market that is really struggling from a capital availability point of view. But we think this is a solution that will resonate very well with the most innovative for the NHS Trust. And then we also -- as we previously announced, we did a market analysis of the German market with Enterprise Ireland, where we scoped a market entry scenario there and looked at that market. And again, we have identified a segment of the market, including university, pediatric, and private operators in Germany where we think this product will resonate. We already have a customer here in Ireland, who is -- keening to be the pilot customer here. And similarly, in Australia and the United States, we feel this is something that's going to get very rapid adoption amongst our existing pipeline of opportunities. So very important development for us as a business and I think something that's really going to change our growth trajectory in a meaningful way. As I mentioned earlier, we plan to bring the MVP to this market in the fourth quarter of this year, and we'd expect to have full functionality or as close to full function as we can by second quarter of next year. But importantly, as with all agile development, we want to get the product into the hands of real customers, get their feedback and iterate on their development from that point on. And then this is my final slide, which for those of you in Australia, I'm sure you're aware that the sad story around the demise of Hills. The reason this is important for us is that Hills has a very large business in the Australian hospital market for what we call patient pay entertainment solutions. So this is a scenario where the Australian public sector in particular provide RFPs where they ask for vendors to provide hardware to the hospital in return for the right to charge the patients for free-to-air television. And that ranges from between $10 and $12 per day. It's a terrible business model, in our opinion, and we're not at all surprised by this development because I don't think too many people are excited about the value proposition of paying $10 a day for free-to-air television, and my kids don't know what free-to-air television is. So I think this is a very old business model. But it does create real opportunity for us because they have 17,000 beds in their portfolio where this is currently deployed. We have been in touch with the administrator, as you would expect. We have no idea how this is going to play out, but we see it as a potential opportunity that might open up a very large segment of the market that was previously blocked for us. Every time one of these hospital systems goes out to procurement, we respond with the nonconforming bids, and we think the business model is outdated. We've been trying to encourage Australian hospitals to use that television in the room as an innovation device to provide meal ordering, education assignment, telehealth that we looked at earlier. And I think this might be an opportunity that suddenly brings that into reality. So as I say, we'll know more. We're still waiting for the administrative to provide some information and access to data room, but we expect that to happen perhaps as soon as next week. And that's the conclusion of my prepared remarks. I thought we'd leave a few minutes, if we have time, for a couple of questions, Dan.

Thanks, James. We actually do have, I think, we're booked through till 9:45 Sydney time, so we have 12, 15 minutes. But people might have to leave. But let's just carry on and keep asking questions until everyone has something better to do, I guess. So James, thanks very much for that. Just a reminder for everyone. If you do have questions, please feel free to add them to the chat at the bottom of the screen or alternately e-mail them to me, and I can ask them on your behalf. James, just starting from me. Look, I think we're fascinated about the -- we will get on the BYOD. But for now, we're fascinated about the agreement with Baxter. Can you give us any background there? You told us that Baxter came to the market looking for a solution. Do you have any feeling for what features does CXP prevailed? Why did Baxter go with Oneview?

I think one of the reasons, Dan, is that our set-top box is something that we have invested very heavily in because it allows us to standardize the delivery of the software across large enterprises regardless of what type of television you have in the room. So if you turn up at any health system in the United States today that has more than 1,000 beds, they're probably going to have 3 or 4 different types of television. Most of our competitors are focused on a smart television, where they're insisting that a hospital go and buy a smart TV, which is both expensive and puts pressure on the capital budget. Our philosophy has always been we don't want to have to not to deal with deploying on -- even if, let's say, we went out and bought a bunch of LG TVs today. And then the next hospital is opening in 6 months' time or taking the product in 6 months' time, there's a very high probability that the firmware on that TV is different from the one we're buying today. So it gets increasingly difficult for us as a software provider to manage the solution on different hardware configurations and different firmware within those organizations. So our approach for the last 10 years has been we are much better putting a compute device behind the television, which is standardized and allows us to deliver our software seamlessly regardless of what the TV is. Now obviously, it's going to be an HDMI compatible TV, but most TVs that are deployed in health systems today. So Baxter shared that was a really important differentiator for them, that they saw that as something that as we scale us across large organizations, it's a simple exercise to deploy that set-top box, which is dramatically cheaper than a smart TV and allows us to utilize the existing infrastructure in the building. The other thing that we've spoken about in the past is that, that device is also capable of deploying both IPTV and coax. And again, the vast majority of hospitals, both in the United States and Australia, any new hospitals being built today was built with Cat 6 or Cat 7 cabling. But a lot of legacy hospitals are still running coax. Very difficult to deploy seamlessly cross-coax. But our OEM partner that builds the set-top box is a very impressive organization. The way we found them is they have the contract to supply Hilton hotels with set-top boxes globally and have delivered over 100,000 of these devices to Hilton. So we had very strong references on the OEM. We're very happy with the choice we've made. And I think that's a key driver of the decision.

Just continuing on the same theme. I think you mentioned that we know that Hillrom shut down some parts of their product range since the acquisition by Baxter. Can you give us any insights into what they shut down and what the crossover was between your offering and those discontinued products?

Yes. So the one that we -- they publicly announced they've sunset was their digital door sign, so the one we looked at before, which is the device outside the [indiscernible]. This is the information about the patient, the medical precaution. So if a patient has an allergy or has NPO, those kind of precautions would be presented outside the room. Part of that was they had made a technology choice to build that on iOS, which is kind of the antithesis of open architecture. And I think with hindsight, they recognized that might have been not the best decision. So Android is obviously open and scalable. So we know that there's a huge opportunity there. They had, I think like all the bed manufacturers, have had a little bit of a dalliance with patient experience, but we did not come up against any of the manufacturers in competitive RFPs. So I think this is a natural extension of their business. It's something that makes perfect sense given they're obviously so closely integrated with the patient. We see, for example, one of the use cases we talked about not with them, but with other bed manufacturers, is that if the guardrail on the hospital bed is down, the smart bed would send that alert typically to the nurse station, which is very helpful. But we think it's also helpful to send that alert to the patient themselves so that they're aware that the device is putting them at risk. If they are at full risk, we know the guardrail's down, well, let's put a message on the tablet or on the television in the room to serve as a reminder. So again, I think that's an example of where there's leverage between their technology and our technology.

Which leads to the question, James. Are there any costs associated for Oneview integration costs? Have Baxter put any stipulations, things that must be delivered outside of your current offering?

No, no, no. I think in the fullness of time, they have a very impressive real-time location system software, which we think is a natural evolution. So in a number of our customer sites, for example,at BJC, every time the care team enters the room, we have an integration into their RTOS system, which is not Hillrom. Where it identifies the care team as they walk into the room. So if I'm the attending physician, as I walk into the room, my photograph appears for 30 seconds on the television. It explains who I am and what my role is in the patient's care. It's a huge satisfier both for patients and families, but also for the care team. So one of the use cases we think is really interesting, and this is not yet built, is that we would use that event as the care team walks in the room to bring that digital whiteboard that we looked at earlier. So rather than having a static information with the digital whiteboard is always on in the room, as the care team comes into the room, we would have -- we use that as the trigger to surface the whiteboard on the television as they come in and out of the room. Because the feedback from patients has been they really want the TV to be for their entertainment purposes. They don't necessarily want to be staring at their precautions or their allergies all day. But obviously, when the care team come into the room, they want to see that information. So I think that might be an example of an integration that would make a ton of sense for us down the road.

Thanks, James. Look, to speak to this question. I'm aware that I'm at risk of trying to put words into your mouth. But when we looked at this after the announcement the other day, we looked at the crossover between the current product offerings from Hillrom and CXP. And it does appear that you are filling a lot of gaps in the Baxter offerings. And I guess we know that these big conglomerates like to be a one-stop shop. They like to be everything for their customers. To what degree is that true? And is that -- do you think is that an important factor for Baxter's decision to go looking for a partner here?

Yes. Look, I think it's a great fit. And I think as with all these things in the same way in our own business, we have to make decisions, do we build, do we buy, do we partner. And I think in this case, Baxter made a very good decision that they want to partner. And we're obviously thrilled that they've chosen us. They have an unbelievable level of knowledge of the U.S. health care market. They know how hard it is to be successful. They have a customer base that would be the envy of any company our size. And look, it's obviously very, very early days. But as I said, we are really excited about this impact it have on our business. We think it is incredibly synergistic and really excited to get going.

Okay. And then perhaps some upside/downside questions. How's the cancellation of those Hillrom products created a liability for Baxter? And this is a question that's put to me yesterday by an investor. Is there -- had Baxter been promising things that have now they've been unable to deliver via that Hillrom cancellations of products?

I don't think so. I don't think so. They certainly haven't -- they haven't suggested that's the case. But as with anything, if you're a company of that size that has a product in the market and you make a decision to sunset, you really have a kind of at least a moral obligation to make sure you can continue to deliver that functionality either yourselves or through partnerships. So I suspect that is an element in their thinking. But we certainly don't have any evidence that they're committed to stuff that they can't deliver.

Understood. And I guess, looking at it from the flip side. Look, Baxter is a monster in the market. Obviously, with huge market share and exposure to somewhere around, we've find 60% to 70% of med surgical beds in the U.S.

Yes.

On the other side of that, does this cut you out of the other 30% to 40% of the market?

Well, I guess by definition, it may. I mean, that segment of the market may go to RFP, where we could be successful independently. And I think that's -- there is a large force to market that tends to get to RFP. Yes, look, I think the -- there's always pros and cons with any transaction, but I think the pros far outweigh the cons in this scenario.

Okay. And similar theme. And whilst I think we're pretty clear that we think this is an exciting development. But in context, 4,000 to 5,000 beds per annum versus perhaps 550,000, 600,000 beds that Baxter have exposure to. That's actually a fairly -- it's a fairly modest target in perspective. It's a great outcome, but it's a fairly modest target. So what's the limitation here? Is the limitation how fast you can roll out or how fast that Baxter is going to introduce you to those customers? What's the thinking there?

I think in my experience, large companies tend to be pretty conservative, and I think they wanted to give a sense of what they thought was achievable and hope that they wouldn't under-deliver. So look, I think we all know what the potential of this is. But I think we also have to start. We have to get to know them. They need to get to know us. I think, as with any burgeoning partnership, there's a betting in time that will really define the ultimate success of the partnership.

Okay. And just in terms of, I guess, staying on the glass half empty track for a second, James. Small cap health care in Australia is littered with the carcasses of companies that have had great agreements upfront, but there's been some misalignment and the reseller or the royalty agreement hasn't quite worked out. What sort of confidence can you give us that there is going to be the right alignment of financial incentive for the sales force for Baxter, Oneview?

Well, I think we've put a lot of thought into that. But I think they have obviously put a lot of thought into it. I mean, I think with all these things when you're starting out a new relationship, you obviously get a pretty strong vibe from both sides as to how this is going to work out. And I just think the confidence level is very high on both sides of the table. But it's going to be up to us to deliver. And I think, ultimately, they have been very clear in saying that their expectations are going to be higher. Our own expectations for ourselves were obviously very high. But they did point out they had experiences in the past where they've had resellers that weren't able to deliver their needs. And they made it pretty clear that they're expecting a very high standard, and we intend to deliver to that high standards. So I think there's a lot of mutual understanding around the transaction we've added into. And a lot of time, it's always gone into trying to make it -- make sure the alignment is right. We've had experience before. I mean, for example, if we think back to the partnership we have with Samsung, it's a fantastic partnership. But we're sort of one step removed because that partnership is with the Samsung reselling community. So it's the CDWs and the connections of the world who are -- wants to remove -- Samsung themselves don't have particularly strong direct relationships with hospital systems in the United States. This is very different. This is where Baxter's sales organization, direct sales organization will directly be selling the Oneview product. So I think it's -- in terms of potential impact, I think there's a meaningful difference there.

Okay. And look, James, I've got to ask this question. I'll tread carefully, but I'll be a bit impertinent. I mean, why don't Baxter buy the technology? I mean that's -- for a company of that size, it must be an option for them. Do you get a feel for why they've chosen to partner rather than acquire?

Well, firstly, the company is not for sale. We have a strategic shareholder who's made it very clear that he is not a seller of the business. And I think, ultimately, that's the key issue right now.

Okay. Great. Look, just moving on, I do want to talk and spend a little bit of time on BYOD. BYOD is something that we actually back on that is a game changer the tech people have been -- as you say, have been asking for, for some time. Just the exact -- a little bit of specifics around the timeline for when we can see that basically in the market on trial and then available to the broader customer base?

Yes. So we expect to have it in the hands of pilot customers in the fourth quarter of this year, so before Christmas. As I mentioned, that will give us a chance to iterate, to get customer feedback. As I mentioned, we've got a design partner who's actually coming to Dublin in September from the States to help work on the project. So they're very motivated. They want to see it in the market quickly. And as I said, we hope to have what we would describe as kind of core functionality well and truly available both by middle of 2023 -- middle of 2024, I should say.

And James, the -- how will -- think about your P&L, your current cost structure. I mean, how will BYOD change the margin or the top line and the margin of the business?

Yes. It'll change at the margin, but not materially. We think the cost is -- we haven't yet shared the development cost to market. So I don't want to share any information that we haven't shared publicly. But suffice to say, it really is leveraging the back-end integrations that are already built. So it's about building the front end. So it's a react project, which shouldn't be a particularly heavy lift. The fact we think we can get it to market so quickly, I think, speaks to that. And that is again the barrier to entry is that we're really leveraging these back-end integrations that we spent the last 15 years building in order to deliver a different user interface. So we think it's fairly seamless. And we think the revenue impact is going to be almost immediate for the reasons we talked about. It's not going to get stuck at this procurement bureaucracy, which can take literally months and years to work its way through the system because there's no capital involved.

Understood. We're tied for time here with a couple of minutes left. But we do have a couple of questions that have come in via e-mail and on the chart. So first one, James, can you -- what can you tell us about the financial metrics, the payment model to -- between Baxter and Oneview?

I can't say anything because they're commercially sensitive other than to say that it would be that the terms are what would typically be expected in the United States or a revenue share. I think, Dan, you've made some assumptions in your report, and I think those assumptions seem pretty reasonable from our perspective.

Okay. And just for background for anyone listening, we base our numbers on other value-added reseller agreements we've seen. And we've suggested that there is somewhere between a scaling 20% to 30% pay away to Baxter on behalf of this. But moving on, I think it's going to be the last question we can fit in. And it's a question regarding Hill. Did Hill have any market share in the new technology that they were trying to roll out aside from the TV rental model?

They do. They have a nurse call business in Australia, which from what we understand is pretty well thought of. They bought a business called Merlon some years ago. I want to say probably 4 or 5 years ago. I think that's a pretty good business. I hear from customers we know that deploy Merlon that they're very pleased with it. So I think there will certainly be interest in the nurse call side of the house. I think it's difficult for us to envisage having looked at it ourselves previously. It's very hard to come to terms with this patient entertainment model because it just -- and just from a PR perspective, the fact you're asking patients to pay $10 a day for free-to-air TV just doesn't pass the smell test as a sustainable business model. So for us, the best possible outcome is that, that market dies and is proven to be unsustainable, and that opens up the opportunity for us to bring our care experience platform to that 20% of the market that they currently have tied up.

And James, I know we are at time, but there has been 1 follow-up coming. I'll just squeeze it in. It's basically asking, you mentioned that you've been in contact with the, I shouldn't say liquidators, what they are, administrators for Hill. Are you implying there are assets there that Oneview would be interested in?

Well, we don't know is the answer. That's why we put the expression of interest in. I think it just moves us to understand what do those contracts look like, what is the -- what are the fundamentals of that business. We've made some assumptions ourselves from outside the business and from market intelligence. But I think if we were invited to the data room, I think that could be an interesting opportunity for us. We don't know yet.

Understood. Look, we are, over time. I think people need to get away. James, thank you for joining us. Congratulations on the developments, and congratulations everything that Oneview has done to date. And we look forward to hearing more.

Thanks, Dan. Appreciate your time, everyone. Have a good day.

Thank you.