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Cemax builds sales group to capture PACS demand


While many scanner vendors pare operations to contend with sluggishhospital purchasing, picture archiving and communications systemssupplier Cemax is boosting its sales organization to capitalizeon rapid OEM sales growth. The privately held Fremont, CA,

While many scanner vendors pare operations to contend with sluggishhospital purchasing, picture archiving and communications systemssupplier Cemax is boosting its sales organization to capitalizeon rapid OEM sales growth. The privately held Fremont, CA, firmdoubled its revenue over the past year, according to Oran Muduroglu,vice president of sales and marketing.

Muduroglu was hired last year from Toshiba to accelerate themove by Cemax into OEM supply of image processing and PACS softwareproducts (SCAN 4/22/92). Earlier this year, several changes weremade to expand the sales organization further:

  • Tony Wade, formerly president of interface supplierAdaptive Video, was hired last month as national sales manager;

  • Scott Ernst was promoted to OEM business manager;

  • Bruce Olson, previously responsible for health-careintegration efforts at Sun Microsystems, will head up a new Cemaxeffort targeting managed care and other large health-care purchasersas director of corporate accounts; and

  • Ronald Parker, a top performing Toshiba CT specialist,was hired as central region product sales specialist based inChicago.

Wade was president of Adaptive Video for an interim period,following the departure of Michael Franco in January (see followingstory). He was previously vice president of sales and marketingat Adaptive. Wade has been replaced as president at Adaptive Videoby Johnson Chua.

Cemax, originally a three-dimensional image processing workstationsupplier, jettisoned its proprietary hardware business three yearsago (SCAN 8/15/90), opting instead to tailor its image processingsoftware to run on Sun Microsystems' off-the-shelf Unix workstation.

The firm's R&D effort is presently aimed at developingplatform-independent software, Muduroglu said. That effort wasfacilitated earlier this year with the purchase of medical imagingworkstation supplier Virtual Imaging (SCAN 4/22/92). VI had beenwriting medial imaging software for operation on IBM-based computers.Cemax is developing its software to function on the IBM RS/6000Unix workstation. The firm has not yet shipped this product.

"We are looking to expand our IBM distribution channels,"Muduroglu told SCAN, "But it takes time to port all thissoftware to the different platforms."

Cemax showed a 1-terabyte optical disk jukebox, supplied byan outside archive vendor, at the 1992 Radiological Society ofNorth America conference as part of a broader range of PACS products.The jukebox is the basis for what Cemax calls its Archive Manager.Although several customers have expressed interest, the firstof these high-capacity centralized image storage systems is notexpected to ship for six to nine months, he said.

There are economic and department-management incentives forhospitals to centralize image archiving. This process is likelyto be gradual, however, as imaging sites build and integrate piecesof a digital system, Muduroglu said.

One advantage of the hardware-independent focus of Cemax isthat customers are able to scale up implementation at their ownspeed, perhaps starting with one CT scanner and a workstationand gradually adding other modalities and output devices, he said.

As with computer workstation technology, the cost of both archivingand display technology is declining, while technical performancehas improved dramatically, he said.

"That (1-terabyte archive) technology did not exist afew years ago," Muduroglu said. "It would have takena whole room (to store that much data) and cost four times asmuch."

Cemax software connects to all major laser imagers and scanners,he said. The firm's technology differs from other PACS interfaceproducts that are expansions of video frame-grabbing technologysince it is based on full 16-bit image data sets used for imageprocessing, he said.

AS NATIONAL SALES MANAGER, Wade will be responsible for coordinatingsales to imaging sites made in cooperation with OEM partners,such as Du Pont. This differs from the company's pure OEM business,coordinated by Ernst, in which the Cemax software disappears intomajor-label products. Cemax has 15 medical imaging OEM relationships,Muduroglu said.

Direct sales to national accounts, led by Olson, composes athird tier of the vendor's sales strategy, he said.

The capital equipment side of medical sales by film vendorsis growing in size and evolving beyond its initial role as a loss-leaderfor film sales.

As medical imaging film vendors offer more complex digitalimage management systems, there is less reason to justify low-pricedsales as incentives for film contracts, he said.

"You can give away processors and laser cameras all daylong. A thousand dollars here and a thousand there is not muchcompared with multimillion-dollar film contracts," Muduroglusaid. "But, when a hospital looks at a three- or four-yearimage management plan, it is hard to make a case for film subsidizingthat business."

The economics of PACS has improved considerably since the daysof initial market optimism--and disappointment--a decade ago,Wade said.

"The PACS market is strong now," he said. "Thereason is that it can be shown to save money, reduce personneland (avoid) lost films. That is what everybody is pointing towards,increased productivity and lower cost. PACS is poised at the thresholdto accomplish that."

Wade, still a major stockholder in Adaptive Video, believesthere will be continued demand for that company's 8-bit imagemanagement technology, particularly given the large installedbase of imaging equipment utilizing analog output.

Adaptive has arranged a new infusion of capital and is readyinga networking product for release later this year, Wade said.

Demand for Adaptive Video's print spooler has waned, however,as most of the medical printer companies have developed equivalentproducts of their own.

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