Kodak takes new turn in PACS market by placing its bets on Cemax-Icon unit

March 3, 1999

Cemax-Icon technology to make up bulk of new PACS familyPerhaps no other medical imaging vendor has made more twists and turns in negotiating the PACS market than Eastman Kodak. The Rochester, NY, company’s latest PACS permutation came last

Cemax-Icon technology to make up bulk of new PACS family

Perhaps no other medical imaging vendor has made more twists and turns in negotiating the PACS market than Eastman Kodak. The Rochester, NY, company’s latest PACS permutation came last month, when Kodak announced that it would move its digital image management operations to its Cemax-Icon subsidiary in Fremont, CA.

The announcement puts to rest questions over Kodak’s direction in PACS, as well as doubts about the long-term future of the Cemax-Icon unit. Kodak acquired Cemax-Icon with its purchase of Imation’s medical imaging business in December (SCAN 12/16/98). As Kodak already possessed major operations and OEM relationships in PACS, some market watchers saw Cemax-Icon as a potentially redundant operation.

But in the end, Cemax-Icon’s technology won the day. The company’s Archive Manager and AutoRad workstations will become the heart of the Kodak product line. While some elements of Kodak’s PACS family will be continued, Cemax-Icon technology will make up the majority of the offerings going forward. Kodak is currently integrating the respective Kodak and Cemax-Icon products.

All development, marketing, sales, manufacturing, and service for Kodak’s PACS operations in the U.S. and Canada will be handled in Fremont. In Europe, Kodak will distribute, sell, service, and market Cemax-Icon products. Plans for distribution in the rest of the world are still being developed. Cemax-Icon will function as a wholly owned subsidiary.

The strong collaborative workflow abilities of the Cemax-Icon product line led to Kodak’s decision to continue with the company, said Cemax-Icon president Gary Larson. A 3M and Imation veteran, Larson replaced former Cemax-Icon president and CEO Terry Ross in November.

Cemax-Icon will continue to support and provide Kodak’s Digital Science Medical Viewing Station, however, which is supplied on an OEM basis by Dutch PACS software developer Applicare Medical Imaging. While Cemax-Icon expects that the Applicare workstation will be used primarily for secondary image viewing applications, such as clinical image review in ER/ICU environments, it will provide the product to customers who wish to expand their current installations, Larson said.

Cemax-Icon’s ClinicalAccess product will serve as Kodak’s clinical referral and teleradiology workstation. Kodak’s Medical Image Manager image acquisition device will also be continued because of its strength in supporting printing applications, Larson said.

A key benefit of the integration between the companies is Cemax-Icon’s ability to offer Kodak’s printing and computed radiography systems, Larson said. The company will also be able to offer customers one-stop shopping for PACS, CR, and printing purchases.

“If a customer wants to purchase a PACS that includes a CR and a DryView printer, and wants to place one purchase order, we will facilitate that,” Larson said. “In addition, we are now part of a company that has a significant presence in the CR world and in laser imaging. We have the opportunity to integrate them and add features and functionality that will more tightly integrate CR with PACS.”

The Kodak/Cemax-Icon team has begun communications with Kodak PACS customers and will be diligent in offering transition and upgrade plans, Larson said.

Kodak will continue to maintain its PACS group in Dallas, a legacy of Kodak’s acquisition of PACS pioneer Vortech Data in 1993. That deal was supposed to make Kodak a leading player in digital image management, but Kodak experienced difficulties in integrating its operations with those of Vortech. Since then, Kodak has relied on a combination of internally developed PACS software and OEM relationships with companies like Applicare.

Kodak will keep the Dallas facility open and will retain the engineering staff related to the product lines that it will continue to market. The facility will report to Cemax-Icon. Customer service and support functions will also be maintained to provide support to Kodak’s installed base. Over time, Kodak expects to see some staff restructuring at that location as a result of the new emphasis on Cemax-Icon.

Kodak’s Allendale, NJ-based ultrasound miniPACS business, which houses the firm’s Access radiology product line and echocardiography image management offerings, will remain an independent entity, however. There will be collaboration between Cemax-Icon and that group, and discussions are beginning to determine how it will fit long-term into the business, Larson said.

Larson will report to Dan Wiersma, director of Kodak’s newly created digital medical business and a vice president of Kodak’s health imaging division. Wiersma is responsible for the ultrasound miniPACS efforts, as well as new business opportunities. He reports to Nancy Sousa, general manager and vice president of new businesses for the health imaging division.

Kodak’s decision to consolidate its PACS business into Cemax-Icon is a vote of confidence in the Cemax-Icon product line. It’s also a statement about Kodak’s own PACS business, which finally seems to be gaining some needed stability.

“This is the smartest move Kodak has ever made in PACS,” said Michael Cannavo, president of Image Management Consultants of Winter Springs, FL. “The Cemax-Icon product line is very solid, and it puts Kodak in a much stronger position than they were before.”