Stentor, Amicas benefit from EMC’s deep pocketsFirm opts for Web-based over legacy PACSRather than setting up its own technology investment fund like Intel and Sybase have done, data-storage giant EMC has joined two separate
Firm opts for Web-based over legacy PACS
Rather than setting up its own technology investment fund like Intel and Sybase have done, data-storage giant EMC has joined two separate financial groups that have already invested millions in Internet-based imaging. In back-to-back deals, EMC participated in raising $8 million in second-round financing for Amicas and $20 million in second-round financing for Stentor.
In each case, EMC is the only nonventure capital or financial firm participating. Other partners in the Amicas deal include InvestCare Partners, TAIB Bank, Radius Ventures, Portage Venture Partners, and Banc One Equity Capital. Amicas plans to use the funds to expand its sales and marketing efforts and accelerate deployment of its image distribution system (HNN 9/20/00).
Stentor plans to use its new bankroll to expand product development and engineering, customer service, sales and marketing, and ongoing research and development for next-generation products. In addition to EMC, the companys latest investors include Gilo Ventures, Caduceus Capital, and Sanderling Biomedical Venture Capital.
Stentors core technology redefines the way high-resolution images are viewed across networks, said Davidi Gilo of Gilo Ventures. We recognize that Stentor is in a unique position to take advantage of an important marketplace opportunity.
EMC originally got into the image-management systems business through a $1.1 billion stock acquisition of systems integrator Data General last year (PNN 9/99). Data General provided PACS to its customers through a partnership with MarkCare Medical Systems. But EMC has been slowly phasing out Data Generals PACS business and does not plan to exhibit any PACS at the upcoming RSNA meeting. The company will continue to support Data Generals installed PACS base, however.
Not surprisingly, these days EMC is more interested in ventures that leverage the Internet as a data transmission and storage backbone. Hence the investments in both Stentor and Amicas.
EMC has taken a minority investment in a number of Internet-based ventures across different industries, including medical, said Dana Lieske, a spokesperson for EMC. We have done this because these companies represent an innovative direction for storage and management of information, which is EMCs core business. While many of the companies are EMC customers, we took the investments to promote new and promising industries in areas that we see as building new markets for EMC.
EMCs total revenue for data-storage operations rose 47% to $2.14 billion in third-quarter 2000 (end-Sept.) from $1.45 billion for the same period in 1999, accounting for 94% of the companys revenue. The firm attributes the increase in third-quarter earnings to growth in demand for storage area networks and network-attached storage implementations. EMC holds nearly 35% of the market share for networked storage, according to research firm Dataquest.