Installed base looms large for PACS firms

February 1, 1999

Installed base looms large for PACS firmsAgfa's planned acquisition of most of Sterling Diagnostic Imaging's assets and Eastman Kodak's 1998 acquisition of Imation's medical imaging business revealed several important truths about the medical

Installed base looms large for PACS firms

Agfa's planned acquisition of most of Sterling Diagnostic Imaging's assets and Eastman Kodak's 1998 acquisition of Imation's medical imaging business revealed several important truths about the medical imaging and PACS marketplace. First, film market share is still crucial for the success of these firms.

Despite years of hype, market penetration of PACS technology remains at very low levels. The future is certainly digital for hospitals, but in today's market, film sales continue to provide an important revenue stream for these vendors.

In addition to providing profits today, a hefty film market share may also pay off down the road. By maintaining strong relationships with customers, film companies would likely have a leg up on other vendors for future sales of digital image management technology. In a complicated sales situation like PACS, relationships can make all the difference.

Although it did not acquire film market share, Access Radiology took a similar approach in acquiring installed base through its acquisition of fellow teleradiology firm EMED (PNN 12/98). That company hopes to leverage off EMED's stable of on-call teleradiology users for more advanced teleradiology implementations.

While it is too early to tell whether Agfa, Kodak, and Access will be successful in their efforts, it's hard to argue with their approaches. More often than not, customers will go with the company they know and believe they can trust.

--Erik L. Ridley, Editor

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