Fitbit said Wednesday that its wellness programs for corporations will be HIPAA compliant. That move is a key hurdle for Fitbit as it aims to grow its business via enterprises, health plans and benefits providers.

HIPAA refers to the U.S. Health Insurance Portability and Accountability Act (HIPAA), which governs privacy for patient data.

The news comes amid reports that Fitbit will work with Target to offer trackers, health competition and wellness programs to employees. Target, which has 335,000 employees, would be Fitbit's largest wellness customer.

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The wearables market faces stiff competition, pricing wars and smartwatches such as the Apple's Watch. For a health-focused wearable device maker like Fitbit, enterprise accounts can provide a moat around the business. Fitbit's corporate services business is only about 10 percent of sales, but the profit margins over time are likely to be more secure.

Fitbit won't see a huge business-to-business bump from being HIPAA compliant. However, HIPAA compliance does check off one key hurdle for enterprises.

According to Fitbit, its wellness unit can use HIPAA compliance to work better with health plans, hospitals and other entities that are regulated.

Fitbit has about 50 Fortune 500 companies as wellness customers.

It remains to be seen how Fitbit's enterprise wellness effort plays out, but analysts are applauding the company's move to diversify. In a research report, Pacific Crest analyst Brad Erickson said:

Fitbit has concrete opportunities to diversify its revenue channels away from strictly direct-to-consumer through corporate wellness channels--a $100 million revenue run-rate business today with the chance to grow significantly larger.

Erickson also argued that Fitbit Wellness could grow as a business due to the proliferation of the Internet of things. Employees may not want to share their health information with their companies, but may be engaged for discounts, perks and a little gamification. Erickson said: