Archive for the ‘Medical’ Category

The Future of the Medical Device Industry

What the Medical Device Internet of Things (IoT) means to Device Manufacturers and Embedded Vendors

 

Prologue

The key to expansion of the embedded marketplace is predicated on the ability to grow the user base increasing demand. The potential seems clearer if we are able to “follow the money” – that is to understand who is going to make money, who is going to make the necessary investments, and what financial benefits will accrue to the user (purchaser). We then can look at what embedded vendors can do to enhance their position and capture a larger share of the growth.

 

Let’s begin with the medical device marketplace as an example. Currently it addresses a limited user base. The first considerations are that one needs to be sick to use currently available technologies and that patient monitoring devices today are reusable. The best way to expand the marketplace is to develop a self-funding and user beneficial way to address the large population of walking well users. This we will cover in this paper.

 

For those that prefer to read that last pages of a book in order to save time, we can preview who we expect to be the winners (and why). Don’t forget to follow the money.

 

Expected winners:

 

Operating Systems

  • ThreadX
  • Nucleus
  • Commercial Linux

 

IDEs

  • Green Hills
  • LynuxWorks
  • Wind River
  • Microsoft
  • Eclipse users

 

Communication Middleware

  • DDS (Realtime Innovations – RTI)
  • Cisco

 

Modeling:

  • IBM Rational
  • MathWorks
  • PTC (Atego)

 

Big Data Providers:

  • Amazon
  • Yahoo
  • Google
  • IBM
  • Hadoop providers

 

Component providers (enhanced if combined with OSes and modeling):

 

Wireless

  • Clarinox (efficient and comprehensive Bluetooth, WiFi and Zigbee). Already partnered with ThreadX and LynuxWorks

 

Interconnect technologies

USB

  • MCCI – partnered with LynuxWorks

TCP/IP

 

Storage

  • Datalight

 

For example, let’s address how the IoT can expand the medical device marketplace. And why some vendors are in a better position than others. Behind many of our assumptions are the thousands of detailed survey responses from embedded developers. One can see how our data is gathered and analyzed by visiting www.embeddedforecast.com.

 

Overview

 

A significant growth in the medical device marketplace can be realized by expanding the medical device user base from the limited number of patients sick enough to require monitoring to tens of millions of individuals that can benefit from preventative support and ongoing monitoring of treatments (e.g., diabetics, high blood pressure, senior citizens, etc.). This will create a market for millions of new devices, expanded networks, large storage systems and Big Data capabilities.

 

If this seems too ambitious an assumption, one might consider the forecasts by Cisco who is predicting that there will be 50 billion “things” connected to communications networks within six years, up from around 10 billion mobile phones and PCs today. We maintain that one needs to consider how these “things” can be commercially monetized for them to become a reality. Just because they can doesn’t mean that they will.

 

The technology for the new medical device marketplace is already developed and ready to be integrated into the new ecosystem. What remains to be done, and it appears inevitable that it will be done, is to bring the necessary parties into agreement as to the financial incentives for each participant.

 

Insurance Companies, Hospitals/HMO’s and governments (worldwide) need to become willing participants in purchasing and using patient information to determine “best outcomes” based on data from millions of patients undergoing various treatments for the same diagnosis. From these data, insurance companies and hospitals, for example, can reduce costs and provide better care for patients.

 

The upside implications for embedded developers is significant. Profound economic conditions spawn profound opportunities and challenges. As in any economic contest, there will be winners, losers and those that can’t tell the difference. Market uncertainties challenge vendors and OEMs alike to find new niches, competitive advantages and markets that will remain stable while enjoying growth potential.

 

Successful embedded vendors will be those that respond to evidence-based research that define the new marketplace. Those that continue to believe that their products represent the solutions to medical monitoring and patient care will continue to lose money and remain non-competitive. Strangely, more than a couple of vendors believe that the mission critical nature of their products is in alignment with medical device requirements. Nanosecond response times and Common Criteria standards are not necessary for physiological monitoring wherein the highest required frequency response is 100 Hz and patent safety can be guaranteed by fail safe alarm designs. Many RTOS vendors have spent millions of dollars chasing a market that doesn’t exist. Medical device developers are laughing at the audacity of those that try to sell their inappropriate solutions.

 

EMF, believes, based on thousands of developer responses to detailed surveys that vendors that provide integrated solutions to device developers and managers will benefit from the coming growth in product deployments. RTOS vendors, for example, that have integrated wireless protocols (Bluetooth and WiFi) USB and storage capability support into their OS will find a more receptive user base than the large vendors that believe that they can force their solutions on medical device developers.

Read the rest of this entry »

What Medical Device Embedded Developers and Vendors Need to Know About Obamacare

Medical device companies and embedded vendors that sell to this market segment are facing, depending on the outcome of the 2012 presidential election, a huge downturn in this market segment. Unless Romney is elected president and the Republicans get control of the senate, the provision of the Obamacare (Affordable Care Act) tax on medical device manufactures will have significant repercussions. It is ulikely that this tax will be overturned if the current makeup of congress and the white house remains in 2013.

Especially hard hit could be the hundreds of small companies developing medical software applications. Many of these apps can significantly impact and enhance the practice of medicine. The IRS is deciding now whether to treat apps as medical devices subject to the tax – somehow I don’t find comfort in the potential outcome.

As a result of the looming device tax, many medical manufacturer companies are moving production overseas, good jobs are going to Europe and Asia, and many cutting-edge medical devices will now be produced elsewhere for import into the U.S. It would be irresponsible for CEOs to wait until after the election and the seating of the new congress to not take appropriate actions to protect their company.

Therefore the impact of the Obamacare tax may cause irreparable disruptions. Embedded vendors will need to re-strategize their sales efforts and offerings to the medical device segment. Vendors will need to show:

  • That the use of their tools, operating systems, processors, etc. will result in a lower development cost (data based)
  • That these will result in products being shipped earlier meeting targeted windows of opportunity (again supported by data)
  • That such tools, OSes, etc., will be reusable for future designs and developments

  Read the rest of this entry »

Establishing a value for Market Intelligence? Can you avoid the Coming Embedded Tsunami?

We all can agree that good market information is essential for a company’s growth, competitive and strategic planning and sales support.

 Giving up

 

        

       But what is worse – bad information or no information whatsoever?

 

 

 

 

 

 

 

 

I recently read a story about an explorer looking for artifacts along the Amazon River when he happened upon some 50 or more tribesmen each carrying spears. Fearing for his life he cried out “Dear Lord I’m totally screwed”. A dark cloud appeared and a loud voice cried out, “you are NOT screwed – pick up the stone in front of you and kill the chief.” The man picked up and threw the stone hitting the chief in the head, killing him instantly.

The explorer looked up to see more than 50 tribesmen running at him aiming their spears at him. Looking up to the dark cloud, he heard the voice say “NOW you’re screwed!”

 

This is what Dolores and I ponder when we are publishing survey-based market intelligence and using it to address opportunities and threats that confront our subscribers. Giving advice is easy – giving “good” advice based on statistically accurate comprehensive surveys is essential.  

 

We carefully track what we and what others publish and how close each of us comes to correctly forecasting the marketplace. As Dolores is relatively new to our industry, she is finding it hard to understand why market research groups that have been grossly wrong made much more money than we did. Dolores was beside herself asking what happened to those companies that got it wrong. The answer is nothing – newer companies bought their research and the analysts that were wrong found new lines of work. We, on the other hand, have been here for 15 years and plan to be here a lot longer.

 

Before we get to our forecasts, let me provide some background. Perhaps some of you can help me answer some of Dolores’ questions – questions that I wish I could answer. Times have changed since I was on your side of the industry.

 

 A bit of background:

 

Dolores moved from education to the dreaded private sector when we became engaged some 5 years ago. Though having sufficient credits to complete a Ph.D. in performance analysis for validating student progress (skills that would bide her well at EMF), she was already at the highest pay level she could attain and she was more interested in seeing student improvement first hand, rather than theorizing about it and writing papers for her peers.

 

The professional environment in which she performed was union-based and raises were predicated on time on the job, degrees and post-graduate credits – actual performance was not a consideration and tenure was earned in as little as 3 years.

 

Her transition to our performance-based world was easy – she studied hard and attended many conferences and technical presentations over the years, yet her background in data analysis and performance outcomes supported her curiosity regarding how businesses grow or fail based on how they use available information for strategic planning, competitive analysis and sales support. Not only was she able to support my data-mining efforts with her experience, but she is able to ask embarrassing questions of me when she read (and schoolmarmed) my reports.

 

As embedded professionals, perhaps you can relate to the questions she has asked – and maybe provide us some feedback.

 

It usually begins with “I’m sure that this is a stupid question, but …” If I can’t explain it to her, then I probably didn’t think it through sufficiently.

 

Here are some of the many questions that she asks about companies in the embedded industry that I have a hard time answering:

 

1)     Why do companies with very smart people spend hundreds of thousands of dollars on sales development and much less on marketing?

2)     Why to companies that understand the value of marketing for sales and competitive positioning – and spend in some cases millions of dollars in their marketing efforts – spend very little on detailed, relevant and comprehensive market intelligence information?

3)     Why do these very smart people choose to ignore clear market signs (even when made aware of them) that can significantly impact current markets, future revenue streams and company survival?

4)     Why do so many European-based company CEOs micromanage their executives instead of hiring the best and freeing them up to success? Is this a better approach to corporate controls?

 

Forgive what might be construed as a commercial – what really drives her buggy is that she asks me (and not infrequently potential subscribers) “Tell me what I’m missing here; Companies can have access to detailed data that they can use for sales promotion, strategic planning, and competitive analysis for less than one-fourth what they pay for an administrative assistant. Moreover, they can have access to the information that the US military and many prime contractors have about them in order to better respond. Why isn’t someone fired?”

 

 

 What’s on the Embedded Horizon?  EMF’s look at markets that are in transition – creating opportunities as well as threats

 

Looking at Mobile Devices and Consumer Electronics

 

If you are in – or looking to get into – this market segment you will find plentiful opportunities and incredible challenges. New processors and new platforms are appearing regularly and the fickle user base will drop you without hesitation. Now that analog TV signals have gone the way of the Platypus, the FCC is assigning these “white channels” for public use. Herein we will see long range WiFi, and enhanced data handling capabilities that will provide new and dazzling apps that will drive newer markets. Time-to-market will be a crucial consideration, so the ability to reuse code and to apply such code to new interfaces and hardware will determine who will win and who will lose.

 

Do you provide mobile or consumer electronic products or applications? Do you know what processors, OSes and platforms provide better and timelier design outcomes? Does it matter to you? Is your resume up to date?

 

Looking at Medical Devices

 

If we separate medical devices into two cadres; one that supports devices that are attended to by medical staff (ultrasound, CAT scans, renal dialysis, etc.), the other that needs to operate independently of medical support staff (patient monitoring) we see that the same technology that keep military and commercial aircraft operating under secure and mission critical conditions is overkill for medical applications.

 

Did you know?

 

  • The medical device marketplace has been growing at a double digit rate – and new considerations should enhance opportunities for embedded vendors in 2011 – IF they take the time to correctly understand the selling points
  • Considerable attention has been given to the medical marketplace by vendors seeking a safe haven from the expected decline in mil/aero. EMF believes that many such vendors don’t understand the market segment, how to sell to it, or what the users need and will purchase
  • It would be funny if it wasn’t sad that certain leading RTOS vendors are pushing their certified high power, mission critical OSes towards an industry that develops products whose defining frequency requirements are less than 100 Hz
  • New CDRH/FDA initiatives are acting to create opportunities and threats.

 

Having brought many products through the 510k process and to market, and understanding the purchasing value system within the medical device marketplace, I am amused at the hundreds of thousands of dollars that vendors throw away on pursuing meaningless approaches to this marketplace. Dolores gets the “everything looks like a nail theory” and it was hard for her to keep a straight face when one colleague who is a vendor’s VP told us that it took them a year (and mucho dinero) to discover that what we gave them for free was correct.

 

The Coming Tsunami

The Aerospace and Defense Industries of the United States are poised to undergo one of the most significant changes since the end of the Cold War; perhaps the most significant since World War II. We believe that observers (embedded vendors included) who expect small changes are mistaken, thereby fostering a false and dangerous sense of security across much of the industry and government.

 

The impact to our economy goes far beyond our current financial problems and involves fundamental structural changes taking place in the industry and in the market. As in prior shifts of this nature, there will be winners and losers – however these shifts may be profound, creating more dramatic winners and losers than in the last cycle.

 

The impact of major primes shifting financial challenges to their vendors (and by association to embedded sub-vendors) will reach down into the value chain, in some cases devastating naïve second and third tier vendors.

 

To make matters more challenging for industry, as spending draws down, the effect on industry will be dramatic beyond the proportions of top line reductions.  This will be caused by a squeeze on the so called “Investment Accounts.”  These Investment Accounts are the funds used for product development and buying equipment.

 

Embedded vendors that offer “high end” OSes and tools will be hardest hit as reductions in DoD discretionary funding and the actions of prime contractors to absorb overhead within the limits of their financial structure.

 

We expect to see reductions in outsourcing to and purchasing from embedded markets defined as “mission critical” and that involve MILS security, DO-178B, and virtualization technologies as these anticipated contractions take place over the ensuing 2-3 year period. Many high-end vendors are already looking to alternative markets to shore up expected reductions – but most lack the data to determine which markets they can competitively serve.

Meeting CDRH/FDA Guidelines for Medical Device Companies

You Better Design Right, You Better Not Fail, if You Don’t Follow These Guidelines Your CEO’s going to Jail; The FDA/CDRH is Watching You Now

(Sung to Santa Claus is coming to town)

BP Cuff

 

Yes indeed – and it’s about time.

The FDA’s Center for Devices and Radiological Health (CDRH) reported that in 2006, 21% of all medical device recalls were for software defects – it is also estimated that one-in-three software-based products is recalled. They haven’t updated this data since, but one can assume that it might have gotten worse.

Medical device developers and company CEOs should be aware that this is an unacceptable situation and that it is going to rapidly change. Those that don’t get it straight won’t be around when the dust settles.

Is there enough aspirin to relieve the headaches that our government is giving medical device manufacturers? Moreover, is it deserved? The answer – depending on the specific question – is yes and no.

The Obama administration under pressure from Congress has combined the medical device industry with the drug industry as one, and has proposed taxing both industries to pay for universal health insurance (Obama Care). Hopefully thoughtful senators and representatives will see that these taxes will be passed down to patients and other users and will also impact the elderly who most require such devices and can ill afford them – then again it is more realistic to depend on the Easter bunny. But logic is no relief for the headache – particularly when it comes to Washington politicians. It’s no fun being a medical device executive today.

On July 31, 2008 a Senate Bill cosponsored by Senators Edward Kennedy (D – MA) and Chuck Grassley (R– IA) was filed that  would require senior officers or directors of drug and medical device companies to certify under penalty of perjury that all information submitted for a product’s approval is accurate and in compliance with federal regulations.

The Drug and Medical Device Accountability Act Bill expired at the end of the two year Senate session on December 31, 2008, but was refiled in the Senate (2009) with the hope of amending the current legislation by the end of October 2009. This is an important piece of legislation, and medical device executives should get their house in order to accommodate the provisions.

The Bill provided that product applications later found to have contained false or misleading information would be subject to stiff fines (up to $5,000,000), assessed both to companies and their senior officers, who, in addition, could face jail sentences of up to 20 years. These are serious issues. Currently the CDRH has a forensic group that looks at device software only after a device has been recalled.

This is a bad time, and a very costly time (regardless of the Act) for a medical device manufacturer – particularly if software development hadn’t been given the detailed oversight of using best practices. The new Obama tax on medical devices – used to pay for Obama Care – is allready a blow to the industry and to smaller medical device manufacturers.

The “Drug and Medical Device Accountability Act” will change the medical devices industry similarly to how the Sarbanes-Oxley bill impacted corporate accountability. Laws being what they are, we should expect overkill from its enactment. This is why medical device company’s senior management should take time to rethink their strategic approach to the delivery of their products.

EMF has available a report presenting alternative paths for developers to produce quality software for medical devices, minimize product recalls, and affordably provide comprehensive audit trails for CDRH inspectors (Critical Issues Confronting Medical Device Manufacturers). Keeping the company alive and your CEO out of jail are bonuses.

2010 Embedded Systems Conference – Silicon Valley (ESC)

Fearless and no longer loathing in San Jose (with apologies to the late Hunter Thompson)

 aim-high

 

Dolores and I made our annual trip to the Left Coast to attend the annual Embedded Systems Conference last week. It was the best ESC West in many years – more booths; larger booths; good floor traffic; interesting announcements and new to embedded players.

 

I’m not sure how Rich Nass does it – but the keynote speaker was again excellent. This time Michio Kaku, the co-founder of string theory and TV science presenter was the speaker and was charming, funny (but Seinfeld can breathe easy), informative and delightful. We joined the mass exodus to avoid the obligatory hour dedicated for the Microsoft Embedded Group (aka MS Purgatory – otherwise known as We B Arrogant). Granted that Microsoft contributes a lot of $$ to these very important events – for which I am grateful – but give me a friggin break MS, Windows 7 is not the promised land for the embedded world.

 

This was the year that the chip companies made confessions of love to many OS companies. Freescale made announcements with such stalwarts as Green Hills, while Intel teamed with LynuxWorks for an ill chosen medical product. ARM was very impressive as was Microchip, while Xilinx ran away with the FPGA application announcements. Xilinx for the 7th consecutive year (by EMF survey data) was the most used FPGA in the embedded space (and had the best ROI).

 

Green Hills also made a networking arrangement with Cavium (who recently acquired MontaVista and MV Linux) which caused us to ask if Dan O’Dowd (who has publicly claimed that anyone who used Linux was brain dead – or worse) had to be drugged or restrained to cut a deal with a Linux company. We checked the stock market for Prozac manufacturers to see if consumption was up in Santa Barbara. All chuckles aside – it was an excellent deal for Green Hills.

 

It surprised and impressed us that Green Hills made behind the scenes moves that portend for significant growth and positioning against Wind River by hiring two individuals that bring another dimension to the competitive marketplace that will be to their advantage. Although I’m not obliged to keep such under wraps, I do respect the Green Hills folks and will keep these details to ourselves – other than to mention that they are the first of the usual suspects to clearly see the light.

  Read the rest of this entry »

Medical Device Industry Redux: How Obama Care is penalizing the Industry

Failure is an Option – what Joe Biden should have said instead of dropping the F-Bomb

HealthCare2A few months back I gleefully reported what the voters of Massachusetts did for the medical device industry by electing Scott Brown as our new Senator. The US Senate had cobbled together a poor Health Care Bill in order to send it onto the House of Representatives assured that the Republicans would not win Kennedy’s seat and gain the blocking vote. It was, by admission of many Democratic Senators, a terrible bill – but that it would be cleaned up in a House-Senate conference. 

With Senator Brown finally seated it seemed to be a no-brainer that the Health Care Bill would have to be dropped or reconfigured as it would not stand a filibuster challenge.

I was one of those relieved given my concern for my beloved medical device industry which was going to be the scapegoat of the current administration and be severely taxed for no other reason than its name sounded a lot like the pharmaceutical industry. I felt that we had ducked a massive bullet.

The gross distortions in favor of forcing through the bill under Reconciliation were mind-numbing. How the public could be convinced that spending more than a trillion dollars would result in a “massive middle class tax reduction” and how could taking $500 billion out of Medicare “strengthen” it?

Here’s what has happened and what we might expect – how much more damage can Congress inflict before the November elections?

Read the rest of this entry »

Forecast 2010: What Is in Store for Embedded Developers

Taking a “dog’s-eye” view of what we might expect in 2010

Light at end of tunnel

 

 

 The year 2010 is just around the corner, and we are doing what we do best — forecasting. After all it’s our name. But we aren’t just guessing — we base our forecasts on historical facts and data. For the past 12 years, we have been tracking what developers are doing, what tools, OSes and processes they are utilizing and what their design experiences have been. We also report on what issues trouble them the most.

Now we are preparing our 2010 detailed and comprehensive EMF Executive Survey of Embedded Developers and Managers. We will be inviting you to take the survey to see how you our “loyal readers” compare with the larger statistically based responses (please contact us at surveys@embeddedforecast.com if you are willing to participate). Respondents who take the survey will receive a complimentary copy of our survey overview (a $399 value).

Read the rest of this entry »