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A Game Changer in the Cloud!

October 24, 2011
by Joe Marion
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A 'freemium' service in the cloud that could change the game, and force other vendors to do the same

About two weeks ago, Merge Healthcare (http://www.merge.com/) changed the game relative to image sharing cloud services! Over the past two years, a number of companies have been attempting to make a business model out of offering CD replacement services for sharing images. To some extent, all these services offer some degree of hardware and/or software, and usually charge a per study fee for the service. For sites that do a large amount of image sharing, these services have been an attractive alternative to putting images on CD’s or DVD’s and relying on the patient, transport services, or “snail mail” for delivery.

The alternative of using internet connectivity, cloud storage services, and secure delivery applications is gaining popularity as more and more healthcare goes digital. In a recent conversation, George Fiffick, Vice President, Interoperability Solutions at Merge Healthcare, highlighted Merge’s intentions and rationale. Merge intends to introduce an image sharing capability at the 2011 RSNA (Radiological Society of North America) annual meeting in November that in its base form is a free service. This is a radical departure from others who offer similar services on a fee per study basis.

“Free” comes with a price however, in that only the basic service is free. Merge will offer additional capabilities as “premium” services, depending on the user’s requirements. For example, the casual user who needs to upload or download a study occasionally will probably be able to meet their requirements with the free service. On the other hand, a large referral center that usually receives dozens or more CD’s per day may have requirements that exceed the practicality of using the basic service. So, the casual user could get by with a manual software application to upload/download studies, whereas the more sophisticated user would require a local “appliance” to manage the process automatically. Of course there would be a charge associated with the local appliance and volume of studies handled. The cloud portion of the capability will be managed using Dell’s cloud infrastructure based on another recent announcement by Merge.

According to Merge, the capability currently known as “Honeycomb” is a great way to connect to customers and build customer relationships and good will. According to Merge’s publication on the capability, Merge already has the “largest medical image sharing network,” although others might beg to differ. Merge will simply piggyback additional business on its network, reducing the investment for the free service.

It will now be interesting to see how the more established vendors react to this game changer. I suspect that they will match Merge’s market structure with free “basic” services, and attempt to make their profit on the more sophisticated requirements. The expectation has always been that the larger vendors would follow the lead of the innovators, and ultimately drive such services into a commodity. What is surprising is how quickly this has occurred!

Since last year’s RSNA, I have continued to be impressed with the direction the current management is taking Merge. They appear to have done their homework in terms of shaping a business around the changes in healthcare policy, particularly with respect to the role of imaging. It will now be interesting to see how the rest of the industry reacts to Merge’s latest volley. Stay tuned!

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