Philips takes reins in CommView venture

July 3, 1991

Philips Medical Systems and AT&T restructured their CommViewjoint venture in picture archiving and communications systemslast month. The two partners had been discussing ways to reducecosts and make the venture more profitable since late last

Philips Medical Systems and AT&T restructured their CommViewjoint venture in picture archiving and communications systemslast month. The two partners had been discussing ways to reducecosts and make the venture more profitable since late last year(SCAN 1/30/91).

Their final agreement gives Philips control over future productdevelopment planning and software/applications design. AT&Twill continue to participate in CommView as a supplier of hardware.

"We will have a bigger voice in what gets developed, howit gets developed, and in what time frame," said MichaelP. Moakley, president and CEO of Philips Medical Systems NorthAmerica of Shelton, CT.

Philips will have more latitude in setting PACS product goalsaccording to how the imaging vendor perceives the market in bothEurope and North America, Moakley told SCAN. PACS product developmentresources will be strengthened in both Shelton and Hamburg, Germany,where the Dutch vendor has an imaging R&D facility, he said.

AT&T is licensing its PACS software technology to Philips,said William Proetta, manager of the CommView strategic businessunit for AT&T. The technology transfer process will take placethroughout this year, he said.

Both companies agreed that this transfer of product responsibilityis the best way to assure CommView's business growth, Proettasaid. He contested the characterization of AT&T's new roleas that of a supporting player in the PACS venture.

"We still have a cooperative agreement with Philips,"he said. "Our role is to supply the hardware to them. Theirrole is to evolve the software as we move forward."

Although Philips has performed its own PACS R&D, the vendor'sprevious position in CommView was predominantly one of sales andmarketing.

While sales of full digital imaging departments have been disappointing,Philips expects good growth in the mini-PACS business, Moakleysaid. These smaller image display and transmission systems areparticularly useful in intensive care units, emergency rooms andother hospital areas with identifiable imaging handling and processingneeds, he said.

Philips has made considerable investment in its attempt tostimulate the PACS market over the past five years. Hospital costconstraints, however, have cut deeply into demand for larger PACsystems, he said.

The vendor's experience with CommView has provided Philipswith a knowledge of digital imaging that is helpful in targetingspecific applications where there is demand, he said.

"We paid our dues. Hopefully, all we have learned aboutthe market will start paying rewards," Moakley said.

PMSNA has revamped and expanded its PACS/PCR (Philips ComputedRadiography) business to take over the additional business responsibilitiesin CommView. Dr. William Angus, senior vice president, has beenassigned to head the unit. He will be assisted in Shelton by ThomasGiordano, program manager, and James Champagne, manager of marketingfor North America.