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Cranfield, UK, 15 July 2024 – The end of June saw a veritable who’s-who of the imaging IT and healthcare informatics world descend upon National Harbor, Maryland for the annual Society for Imaging Informatics in Medicine meeting, including our very own Research Manager, Amy Thompson. SIIM is one of the pivotal moments in the year for imaging IT and can often prelude some of the big announcements and developments that we expect to see at RSNA at the end of the year. It’s also a great way to get an insider’s view on what’s happening in the market at the moment. We spotted several important and interesting themes, here are our top 3 highlights:
1 – Digital Pathology, Definitely Promising
The words on many an imaging IT vendor’s lips at SIIM were “digital pathology” and “partnership?”. While digital pathology and its integration into the enterprise imaging (EI) story isn’t exactly new, it does remain a nascent part of the EI maturity timeline. Most of the top 10 vendors have some kind of pathology solution, either natively, via partnership or via acquisition. However, many others are yet to ready themselves for the increasing provider demand for digital pathology services integrated into their enterprise strategy. There was plenty of talk about potential and agreed partnerships between digital pathology vendors and imaging IT vendors, with several still evaluating the best strategy to incorporate pathology into their portfolio. While 1H 2024 has lacked any digital pathology partnership announcements, a deluge of new agreements is expected in 2H 2024, likely tied into RSNA at the end of the year.
While it is always interesting to see more partnerships develop and be announced, the question looming as these vendors work away to bring digital pathology on board is, are they too late? As you can see above, many market leaders secured their digital pathology offerings anywhere between 6 months to over 2 years ago. Will this position newcomers as runners up to those that were more “forward thinking”?
The enterprise imaging opportunity for digital pathology is by no means completely penetrated, especially in the US where traction has been slower compared to Europe, but the latecomers will be put on the back foot as the more established players with real-world implementation reference sites may be the more obvious choice for those looking to integrate pathology into their EI workflow.
Those announcing pathology partnerships this year and into 2025 will also need to work harder to differentiate nascent products over incumbents, and one way this may be achieved, is through tighter integration with pathology AI. Imaging IT vendors that leverage these AI capabilities from ISVs will elevate themselves, but doing it successfully will be no simple feat.
Alternatively, vendors may look at other ‘ologies to integrate into their EI offering to stand out. There will be integrations of the “visible light” imaging departments such as ophthalmology, wound care and dermatology, as they represent the slightly lower hanging fruit in terms of ease of integration, but the positive uptick in terms of provider interest and conversion into an increase of business’ topline as result, will remain limited.
2 – Consolidation on the Horizon
If imaging IT vendors are to explore alternative strategies, some of the small-to-mid-sized vendors will need to look for some extra funding. Many of these companies are actively undergoing funding rounds or exploring financing opportunities, and while they may be very rosy-cheeked talking to investors about it, our outlook is a little more realistic.
While economic backdrops across the globe are generally improving, it remains a challenging environment still to secure funding, and not all currently raising will be successful. This really primes the vendor landscape for a wave of consolidation, and while imaging IT vendors probably won’t be as badly impacted as AI vendors, the results will be very similar, just on a more limited scale.
The imaging IT market is also going to soften over the mid-term, with growth slowing to low single digits in 2025 and 2026, putting extra pressure on those vendors struggling to secure financial backing. Inevitably, lots of these vendors will either be snapped up by private equity or larger companies or will simply have to bow out of the imaging IT market if they can’t remain profitable for an extended period.
Who is likely to survive the next three years? Large imaging IT vendors will be able to weather the storm based on their large market share and cash reserves, especially when they can upsell new ‘ology solutions or convert existing installed base to more expensive cloud-based offerings. Smaller vendors will not be able to rest on their laurels as much. Those that choose to explore higher growth markets such as those found in Latin America, the Middle East and emerging Asia Pacific may be able to bolster their revenue, but this remains a high-risk strategy. Vendors able to meet the evolving demands of providers will also be more likely to weather the storm, such as addressing enterprise demands for digital pathology, increasing need for reporting and operational workflow efficiencies or reliable cloud hosting offerings for imaging software. Moreover, as much of the market is under substantial pressure on resources and the workforce, proving ROI for existing services and moving clients towards more of a “turnkey” software and professional services partnership long-term is going to be invaluable.
3 – Cloudy With a Chance of More Cloud?
Cloud adoption will inevitably be one of the most important market trends in imaging IT over the forecast period and will help vendors achieve success in a market more and more receptive to cloud hosting. We’ve already seen success for the likes of Sectra and Visage, who both consistently have net-new contracts being signed with cloud-hosted solutions. The cloud trend is only going in one direction, but there are some nuances to explore.
For public cloud hosting, the vast majority of major imaging IT vendors have partnered with one of three hyperscalers; AWS, Microsoft’s Azure or Google Cloud. So far, these partnerships have generally been monogamous, but we will begin to see imaging IT vendors employing multiple relationships with more than one public cloud provider, such as seen with InsiteOne’s BRIT Solutions, that is maintaining a previous relationship with AWS and striking up a new one with Google. This will become more commonplace, as providers acclimatise to public cloud hosting and understand the benefits and drawbacks of each provider. As a result, providers will begin to have more specific demands when it comes to choosing a cloud partner, and imaging IT vendors will have to maintain more regular and close links with all three of the major hyperscalers to meet these demands. There may be some pushback from the cloud providers, that want to avoid transfer of data out of their cloud to a competitor’s cloud; provider demand will eventually overcome this and hyperscalers will have to bow to the weight of the market, but first mover advantage will not necessarily win out.
Continued high-profile cyber-attacks on healthcare institutions via their IT partners is also putting cybersecurity under increasing focus. Providers, while previously (perhaps erroneously) wary of public cloud due to security concerns, are now coming round to the idea of public cloud hosting of imaging (and other healthcare) IT as a solution to their security woes. Trusting the safety of data and IT solutions to the thousands’ strong teams and multi-billion dollar security infrastructure of the global cloud companies is starting to look like a much more enticing solution than leaving it to in-house IT teams with limited resources.
Are you interested to learn more about the impact that increasing cloud adoption will have on the imaging IT market now and in the future? We at Signify Research will be publishing our latest topical report Cloud Adoption and Business Model Evolution in Imaging IT in September this year. Please reach out to me at jake.bennett@signifyresearch.net if you’re interested in learning more about the report, being involved in the research process or in finding out about pre-purchasing discounts.
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Signify Research’s imaging IT service provides expert market intelligence and detailed insights across radiology IT, cardiology IT, and advanced visualisation IT, alongside operational workflow & business intelligence tools. Combining primary data collection and in-depth discussions with industry stakeholders, our thorough research approach yields credible quantitative and qualitative analysis, helping our customers make critical business decisions with confidence. Throughout the course of 2024, the imaging IT team will be further assessing developments in the market through its’ Imaging IT Market Intelligence Service.
About The Author
Jake is the Senior Market Analyst on the Imaging IT team and joined Signify Research in late 2023, after over half a decade in the medical devices and healthcare market research industries.
About Signify Research
Signify Research provides healthtech market intelligence powered by data that you can trust. We blend insights collected from in-depth interviews with technology vendors and healthcare professionals with sales data reported to us by leading vendors to provide a complete and balanced view of the market trends. Our coverage areas are Medical Imaging, Clinical Care, Digital Health, Diagnostic and Lifesciences and Healthcare IT.
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