The Big Picture: Tough times loom for PACS market

May 1, 1999

Tough times loom for PACS marketMost vendors participating in the PACS sector are reporting strong customer interest in digital image management technology. After years of hype about the benefits of large-scale PACS, end users finally appear to be

Tough times loom for PACS market

Most vendors participating in the PACS sector are reporting strong customer interest in digital image management technology. After years of hype about the benefits of large-scale PACS, end users finally appear to be getting the message. Multimillion-dollar sales have begun to gain momentum as the market broadens beyond the early adopters and academic institutions that have been the primary users of PACS.

Unfortunately, just as the sector begins to live up to expectations, a sizeable bump in the road lurks in the form of Y2K. Although the impact on purchasing has not been widely felt yet, indications are that PACS implementations will be placed on the back burner toward the end of this year.

The slowdown could continue through the first half of 2000, as hospital information systems departments assess any lingering effects from Y2K software patches.

But there may be a silver lining to the Y2K cloud. As Y2K bugs are ironed out by healthcare institutions, pent-up demand could ultimately trigger large increases in PACS purchasing. That's not a foregone conclusion, however. IS managers already have a lot on their plate, and it will take a strong marketing and educational message to gain their attention.

Wise vendors will position themselves most effectively in the market by offering broad image management systems and upgrading and emphasizing their integration and work-flow capabilities. This drive could also spur further consolidation among PACS firms.

--Erik L. Ridley, Editor