Purpose: This paper explores the constituents of and challenges related to the innovation of technology-based services in the long-term homecare sector. Methods: This research used purposeful extreme case sampling, a mixed methods approach to research that included focus groups and interviews, to learn from the experiences of an innovative telehomecare project. The paper uses a framework that integrates service management; information systems innovation and medical informatics theory. Results: The findings indicate that the claimed and the rather abstract benefits of the technology espoused by information technology vendors were difficult to transform into a service concept. The organization studied is still struggling with conflicts between technological possibilities on the one hand, and the prevailing service delivery systems and user preferences on the other. Decisions about the extent to which the service needs to be reengineered, what non-technology resources are required, what should be the role of the consumer in the new care process and identifying who is actually the primary beneficiary and user of the new service remain. Conclusions: A comprehensive development model and 'mindfulness' is necessary for radical service innovation in the long-term homecare sector. Creating new services that exploit the capability of radical technical innovations requires organizational development and the use of many non-technology innovations and resources. To understand what combinations of technological and non-technological resources can provide sustainable benefit, all key internal and external stakeholders must be involved from the beginning of the project.