For many organizations, the key question is not whether to invest in Digital Health Solutions (DHS), but when to do so. Investing too early, too broadly, or without a clearly defined purpose can result in underutilized platforms, increased regulatory complexity, and ongoing costs that outweigh the benefits delivered.
When it comes to connected medical devices, DHS are not simply an extension of existing hardware functionality. It introduces new responsibilities related to software development, cybersecurity, regulatory compliance, post-market surveillance, and lifecycle management. These factors fundamentally change the operating model of a product and the organization that supports it.
The most successful digital health investments are those made with careful consideration, specifically when the device, market, and organization are adequately prepared to support them. Instead of treating DHS as an add-on to be implemented late in the development process, it should be regarded as a strategic capability that aligns with long-term business objectives, clinical outcomes, and regulatory requirements.
This article explains how medtech companies can determine the right level and focus of digital health investment based on their current position in the healthcare ecosystem, and how to use that insight to build a practical, outcome-driven business case that enables them to move to where they’d like to be.
The first thing medtech companies need to do is define where they sit in the healthcare ecosystem. They generally fall into one of three categories:
Understanding which category your organization currently occupies is essential because it shapes how you think about ROI, risk, and resource allocation. The right time to invest is not universal. It depends on where a company falls on this spectrum and whether it has a feasible roadmap to evolve its digital identity over time, if needed.
Once a company has defined its ecosystem role, the next step is to assess whether its current position supports investment in DHS or whether it needs to evolve first. A strong business case for DHS must be tailored to an organization’s ecosystem role and should recognize that value is created differently at each stage.
Device Vendors
For organizations whose primary focus has traditionally been the performance, safety, and usability of the physical device, DHS present an opportunity to extend product value beyond the point of use. Even if the current commercial model remains centered around the device, targeted investments in DHS can strengthen competitive positioning and help future-proof the product portfolio.
At this stage, the most effective investments are those that build the essential capabilities required for digital scaling. This includes establishing secure connectivity, developing a clear data strategy, and creating governance structures to manage regulated software and post-market lifecycle activities. These foundational elements empower device vendors to enhance their service models, improve customer support through remote visibility, and generate real-world evidence that supports both regulatory and commercial objectives.
These investments do not require companies to completely transform into digital health ecosystem players from the start. Instead, they lay the groundwork needed to evolve beyond being device vendors. By integrating digital readiness into their product architecture and operating model, device vendors can respond swiftly as market expectations change, reimbursement models adapt, or new opportunities based on outcomes arise. In this way, digital health solutions become a strategic advantage for hardware differentiation rather than a distraction.
Digital Enablers
Organizations that already collect and use device data are well-positioned to enhance their digital health capabilities. Having established the technical and operational mechanisms to collect, manage, and act on data, the next wave of investment is about converting insight into measurable value for a broader set of stakeholders.
For digital enablers, DHS investment is most impactful when it moves beyond internal optimization and product support needs and begins to shape external experiences. This may include clinician-facing tools that support more informed decision-making, patient applications that improve adherence and engagement, or analytics that demonstrate real-world outcomes to providers and payors. Additionally, the successful movement down this path may improve the “stickiness” of their product in the market, ensuring longevity and continued value.
The organizations that succeed are those that pair their existing data capabilities with a clear product and service vision that connects device performance to clinical, operational, and economic outcomes.
This is also the point at which platform and partner decisions become increasingly strategic. Investments in interoperable, scalable digital health solutions allow enablers to support multiple products, markets, and stakeholders without recreating infrastructure for each new initiative. The result is a digital capability that grows in value across the portfolio rather than remaining tied to a single device.
Digital Players
For organizations operating at the ecosystem level or transitioning to it, DHS are no longer an addition to the device; they are a core component of the value proposition.
Investment is now focused on integrating devices, data, analytics, and services into cohesive care models that yield measurable clinical and commercial outcomes. This can include enabling remote therapy management, supporting value-based contracts, integrating with provider workflows, or generating continuous real-world evidence across patient populations.
At this level of maturity, DHS investment is less about introducing new technology and more about scaling a cohesive strategy. Clarity on ecosystem partnerships, business models, and long-term governance enables the deployment of digital capabilities consistently across regions, therapeutic areas, and product lines. The digital platform becomes a reusable asset that accelerates innovation rather than a series of one-off solutions.
Crucially, organizations operating as digital players can align their device roadmap, digital roadmap, and service strategy around shared outcomes. This creates a reinforcing cycle: devices generate data, digital solutions turn that data into actionable insight, and services translate those insights into improved care and stronger customer relationships.
Deciding when to invest in DHS for connected medical devices is a strategic choice that depends on an organization’s current position within the healthcare ecosystem and its long-term vision. Growth beyond the physical device comes from combining technical innovation with a business model that can capture, deliver, and scale digital value. Whether a company positions itself as a Device Vendor, a Digital Enabler, or a Digital Player, success depends on aligning digital initiatives with clear business, clinical, and operational outcomes.
To learn more, download our latest whitepaper, From Medical Devices to Digital Health Ecosystems: Navigating the Complexities of Product Development here
Hear from industry leaders at Inspire, Natus, and S3 Connected Health as they provide practical guidance across the entire product lifecycle — from concept and design to development and ongoing management — to help teams build devices that thrive in today’s connected healthcare environment.