GE Medical and IBM postpone effort to sell total PAC systems

April 22, 1992

GE Medical and IBM have opted not to go to market with their combinedIntegrated Diagnostics picture archiving and communications systemstechnology--at least not this year. The two major medical imaging and computer firms will continueto collaborate on

GE Medical and IBM have opted not to go to market with their combinedIntegrated Diagnostics picture archiving and communications systemstechnology--at least not this year.

The two major medical imaging and computer firms will continueto collaborate on PACS technology development and could introducea commercial product in the future.

In some ways, the decision by GE and IBM not to commercializea comprehensive PAC system follows the same reasoning behind thefalling off of the CommView PACS joint venture between Philipsand AT&T. In other ways, the situations are quite different.

Philips took over most of the PACS marketing and developingwork for CommView last year (SCAN 7/3/91). The Dutch imaging vendorcontinues to plug away at the digital imaging field, althoughwith more of a sub-PACS, limited-applications focus.

CommView's potential hospital customers were not willing topay large sums for total PAC systems, particularly before thetechnology had matured. GE and IBM likewise decided that the timeis not ripe for hospitals to cost-justify a comprehensive ID PACS.

"We are both concerned with the customer's ability tocost-justify a complete all-digital operation," said JosephL. Marion, PACS product marketing manager for GE.

IBM and GE will continue to work together at their joint clinicalPACS site at the Medical College of Wisconsin, said Ronald M.Sedgley, the IBM manager responsible for the GE Integrated Diagnosticsrelationship. The two will continue to research needs in the digitalimaging field, he said.

"We have had a long-term development agreement that hasbeen in place for multiple years. That is still intact,"Sedgley told SCAN.

GE's decision not to sign up as an IBM business partner thisyear opens up the U.S. market for another IBM PACS partner, Genesysof Orlando, FL. Genesys offers its own PACS software, which runson the IBM RS/6000 Unix workstation. The small software developerhas already signed on as the designated PACS supplier for IBMnational organizations in Europe and Latin America (SCAN 1/29/92).

"This eliminates the contention for (U.S. IBM) sales representativesand ambiguity as to which (PACS) solution they are going to sell.It consolidates the IBM strategy on our product," said MichaelKerouac, Genesys president.

Opportunities may also open up for Genesys in Japan, wherethe GE/IBM relationship had extended to GE's Japanese subsidiary,Yokogawa Medical Systems, he said.

"It (the GE/IBM postponement) shows that major corporationsbanding together to put both of their overheads into a productdoesn't work," Kerouac said. "The technology changesso quickly that it takes a big company's financial stability witha small company's ability to react to technology to make (PACS)work."

In an unrelated move, IBM acknowledged last month that it isshutting down the IBM Palo Alto Scientific Center and distributingresearchers to other parts of the company.

The closure of this and other advanced research sites is partof a corporate-wide cost-cutting drive at IBM, according to aspokesperson. Some scientists will continue in their same effortsat other locations, while others will be given different missions.IBM also hopes to speed up the translation of advanced scienceinto commercial products, she said.

The Palo Alto center was working on advanced MRI processingtechnology in cooperation with the Magnetic Resonance ScienceCenter at the University of California at San Francisco (SCAN1/30/91). While it is too soon to say what will happen to theMR research effort, IBM would like to maintain its relationshipwith MRSC, she said.