Luc Vandenbroucke is Senior Vice President of Barco N.V., Belgium, and member of its Executive Committee as well as President of Barco’s division BarcoView, which designs, manufactures and markets visualisation systems, displays and graphic controllers and strategic software equipment for demanding high-tech niche markets such as Air Traffic Control, Avionics, Vehicle Electronics, Defense & Security and Control and the Medical Market.
Luc obtained a Commercial Engineer degree, Quantitative Business Economics and Informatics at the Catholic University KU-Leuven in 1973 and a degree of Expert in International Trade at the International Trade Invest Institute, Antwerp, Belgium in 1977. He joined the Barco Group in 1975 and assumed different functions in worldwide Marketing and Sales, with emphasis on new product definition, product introduction and internationalisation. Successively, he was active as Sales Executive, Sales Manager, Market Director and Commercial Director. In 1986 he became involved in the start-up as co-founder and later as General Manager of an innovation company for high technology products for the graphics market.
In 1989, as Corporate New Business Manager, he has acquired expertise in the search for and acquisitions of companies for the Barco Group.
The following interview with Mr. Vandenbroucke was conducted by Industry Analyst, Srividya Badrinarayanan.
Frost & Sullivan: What is the vision and mission of Barco with regard to the global medical imaging industry?
Mr. Vandenbroucke: We defined in our vision that advanced medical image acquisition and imaging pervade healthcare enterprises worldwide. The massive amount of image data produced, will necessitate advanced and ergonomic viewing and analysis methods, enabling efficient and reliable diagnosis. Not all medical professionals are able to view this massive amount of information with the use of normal tools to, ergonomic viewing and vision analysis is required.
Our mission derives from these developments - which is to become a global player whose role is to support enhanced technical and clinical visualisation for medical imaging. We will try to deliver productive and better clinical outcomes for patients, doctors and healthcare systems. According to a Frost & Sullivan research, PET -CT generated revenues of close to $500 million in the year 2004 and they would reach $725 million in 2011. If you look at this situation, and when you know that the volume of images per study – nearly 200 Mbytes to 600 Mbytes - is going to explode with the arrival of 300 PET and 300 multislice CT images, you understand that this requires new and more powerful means of visualization.
Frost & Sullivan: What is Barco’s strategy to handle this new market situation?
Mr. Vandenbroucke: Barco will continue to sell to and through its PACS partners. We want to remain market leaders in the PACS visualisation market, maintaining our present market share and technology leadership. It was the first market we conquered and we want to stay the market leader by being present on a worldwide basis.
The second thing which is important for us is that we want to become a worldwide standard-setter in visualisation. Barco took a first step with the acquisition of Voxar, which became our product line for 3D visualisation in the PACS environment.
Furthermore, we have a group in Barco called modality OEM solutions. With this group, we want to penetrate the modality OEM market with custom solutions for imaging modalities and image processing in 2D and 3D.
Last, but not the least, we want to explore new opportunities in the medical imaging market. And whenever a trend becomes an opportunity, we need to be ready to take it.
Frost & Sullivan: From Barco’s perspective, how has the acquisition of Voxar Ltd changed the market scenario for medical display monitors and 3D imaging?
Mr. Vandenbroucke: There are a number of elements that we need to highlight. The market scenario for our medical display solution is unchanged – it is business is as usual. We are doing our business with our channels and OEMS. In the area of display solutions and workstations, we are studying new opportunities in visualisation. As far as 3D is concerned, the acquisition of Voxar has given us new insight into hospital workflows and how 3D is used in a hospital. We have learned to appreciate the need for higher productivity in the healthcare market and, in particular, the need for better clinical visualisation.
In this context, we pay much more attention to these factors. It helps us on a continuous basis to enhance workflow and productivity, not only helping the hospital but also the medical professionals. We like to continue contributing to a better clinical evaluation of the imaging data when it is produced in the facility. For example, our recently introduced Vesselmetrix module. The module, which is a clinical module, improves the doctor’s productivity and enables better clinical evaluation of data produced by 3D systems. That is an example of the direction that we want to pursue in the future.
Frost & Sullivan: Do you think that the 3D imaging and medical display monitor business complement each other?
Mr. Vandenbroucke: There is little overlap at the moment. This might increase in future with certain technologies evolving. It is too early to discuss this in great detail. At this moment, we see little overlap but we can foresee growing integration in the future.
Frost & Sullivan: The acquisition of Voxar has made Barco’s position very strong in the industry. How important do you consider acquisitions and alliances in this industry?
Mr. Vandenbroucke: Barco is not selling directly to end-users, and we don’t plan to in the future. We have an indirect business model and we sell to and through different partners. At the same time, we maintain strong relationship with some hospitals in order to understand and pick up on trends. We maintain good contacts with certain reference hospitals and these relationships help us to define future products. We receive their feedback on some clinical and viewing applications and try to understand their real day-to-day problems.
Frost & Sullivan: So these hospitals are places where you start R&D to create new, improved products?
Mr. Vandenbroucke: When you bring a product to market, you have to make sure it solves the problem. And, to better understand the problem, we have to work in-depth with the people who are confronted with imaging problems on a day-to-day basis.
Frost & Sullivan: Can we expect more acquisitions / alliances in the Asia Pacific region?
Mr. Vandenbroucke: We are always looking for alliances, potential partners and opportunities. We are on a continuous search for that but, at present, we have nothing in the pipeline that I would be able to announce.
Frost & Sullivan: Barco is today a well established vendor for medical imaging solutions and for 3D visualization. What are the latest growth trends in these specialisations?
Mr. Vandenbroucke: We have already spoken about the massive data generated by modern medical scanners. This is a trend that will continue, many studies confirm this. The first trend is to bring new solutions for the visualisation of 2D and 3D data. We expect the number of images generated by the modalities and hosting through PACS systems will increase up to 80,000 images per day. When you assume that a radiologist can view one image per second, which is very fast, then he will need 22 hours per day to interpret these 80,000 images. The use of 3D information and tools will bring better interpretation. Clinical applications tools such as Vesselmetrix will be a necessity to view this massive amount of data.
A second trend is that clinical applications which, in the past, were part of modalities, are now more and more being integrated into the PACS environment. This shift has an impact not only on the software implementation, but also on the display related hardware. Today’s display systems are more than just tools to visualize 2D static information. Today’s displays are solutions that are able to show images also in color and dispose of dedicated graphic controllers to allow simultaneous uploading of large data sets in a split second and swift image manipulation such as rotating 3D images in real time.
A third trend which we see is basically the introduction of modern modality such as the multislice CT, which is triggering the development of new and affordable solutions. For 3D, it means that the images are becoming available everywhere in the hospital. These images need to be viewed not only by radiologists but they have to be made available throughout the hospital. Other departments can use the images for pre-operative insight and for treatment planning. This means that we need to keep in mind that new opportunities have to enhance productivity in a cost efficient way.
A fourth trend is that we enter the next phase of PACS where the captured digital images are transformed and manipulated into images that can be analyzed.
Frost & Sullivan: We have new applications such as multislice CT for angiography and other diagnostic applications. So the basic idea would be to make the workflow of the radiology department as efficient as possible?
Mr. Vandenbroucke: Yes, of course. The workflow in a hospital is very complex. Our role, together with our partner OEMS, is to make it very easy for the hospital to handle general as well as 3D images at all places in the hospital - not only in the radiology department. Because specialised workstations aren’t available all over the hospital, we have to make sure that we can transform and manipulate the images quickly and that it can be viewed everywhere. The introduction of multislice CT and MRA are very, very important drivers for this market.
Frost & Sullivan: How do you see these trends developing in Europe over the coming years?
Mr. Vandenbroucke: From what I understand, there are only positive trends. The main trend we notice is that the 3D market is moving from an early adopter stage to mainstream. That’s really important for the growth of this market.
Frost & Sullivan: How would you describe the competitive landscape in both the areas? How have the major OEM modality vendors contributed to this field?
Mr. Vandenbroucke: PACS is still growing at a fast rate for the next coming 5 years, but price erosion is very strong as well. We expect new competition to come up but we can imagine a need for consolidation in the supply as margins keep dropping. There is a lot of movement. I think the big flat panel manufacturers have seen this market moving out of a specialised to a more ‘plain vanilla’ market. We see quite some movements with some companies getting in and out the market.
Also for 3D we see a very competitive landscape. The advantage for Barco is that we are able to offer our software independent from the hardware and that our software is network deployable (central server). This approach allows us to handle small size installations as well as economic site wide deployments.
Frost & Sullivan: In the case of 3D and 4D imaging, how has reimbursement played an important role? Have the various healthcare systems been keen on adopting these efficient methods as standards for medical diagnosis?
Mr. Vandenbroucke: In some countries it has been the driver in the successful opening of new markets. I am talking about countries such as the United States, Korea, and Japan where the reimbursement practice has had a really big influence on the growth of 3D and 4D visualisation. On the contrary, we have also seen that the reimbursement practices are not so well established in Europe and as a result, there is a different growth pattern. In Europe we see that the PACS systems are not always in place, and that 3D is not deployed in the modality environment. It is just starting, but we do expect that growth in the installed base of multislice CT will push PACS implementation and also drive the growth of the 3D imaging market in Europe.
Frost & Sullivan: Europe is very diverse with each country having its own separate system. How would you compare this situation with other regions? Is there any country in Europe which has been forward in adopting reimbursement policies?
Mr. Vandenbroucke: As mentioned earlier, in Japan and Korea we saw an explosion of the market at the moment that the government decided not to support analog systems in film management anymore and pushed for a digital environment- that is, PACS systems. Of course, their reimbursement philosophy was supporting this growth following no more reimbursement for films but for PACS.
In Europe we are still lagging behind, but I do believe that the fundamental trend, multislice CT generating all these images, will pressurise our governments to allow reimbursement for 3D visualisation. If that is the case, then we will see an acceleration factor, which is true not only for us but also for other companies such as GE Healthcare and, Siemens just to name a few.
Scandinavia is very much advanced in terms of adopting new technologies. Others might also follow but the question remains when - this is very difficult to predict.
Frost & Sullivan: So all the companies are waiting for these rules to change and make PACS and 3D imaging more accepted by physicians? Are industry players like you or the OEM modality manufacturers doing anything to convince the healthcare authorities about this reimbursement issue?
Mr. Vandenbroucke: Waiting is maybe too heavy a word. We know that in university hospitals there are installations of 3D systems along with new CT scanners or other modalities using 3D. Here you are not waiting for a one hundred percent reimbursement plan. But for big growth in Europe - yes, we are waiting for reimbursement. I think this flag is carried by the OEM companies and PACS integrators. They are talking to the governments in their respective countries with whom they have more of an in-depth relationship. They are carrying the flag and we are following them. Of course, we are trying locally to influence it.
Frost & Sullivan: You mentioned that Japan and Korea have been very forward in terms of implementation of 3D. If we compare Europe, North America or Asia Pacific, how would you rank them in terms of their potential? Are there any strategies or special focus on regions such as India, China etc? How is Barco preparing to develop itself in the Asian region?
Mr. Vandenbroucke: If you look at the United States, Japan and Korea, then I think that penetration is comparable. That means PACS systems are available and the information within a hospital has been completely digitised. What still needs to be done is in the 3D environment is to make the 3D information available through the PACS systems, using the PACS system as a gateway. This still needs to happen.
In Europe, only in the countries which have this advanced vision and are socially oriented, such as Scandinavia, this is happening. Three other regions - Germany, Austria and Switzerland are advanced in comparison to the United Kingdom and France. They are closely following the Nordic countries. Countries such as France, the United Kingdom and Italy have started, but not at full speed.
And among the Asian countries, we have large countries such as India and China that have seen a moderate start but not at the same speed that we saw in the United States a couple of years ago. We are also looking at these countries. We have our offices in China from where we support our OEMs and eventually also the local system integrators. Yes - we do have a strategy which is to support our present and future partners and build the market globally.
Frost & Sullivan: What are the challenges that your company or the industry, as a whole, is facing?
Mr. Vandenbroucke: We do believe that the potential for 3D imaging in Europe is big but, as we indicated before, at this point, it is lagging behind the United States due to the reimbursement policies and the limited proliferation. Of course we see the start of interest in the diagnostic capabilities of 3D which is in conjunction with the new modalities supporting the 3D. In Asia, we also see acceleration in the market. Although we do not believe this is as strong in the United States and in Europe. As I explained, in Asia we have a strong organisation that is close to the market and we are ready to grab every opportunity there. So we are preparing ourselves for Europe and Asia by continuously promoting the 3D capabilities and its potential to enhance productivity. As I said, we are continuously looking for partners to come close to our customers and enhance our offerings.
Frost & Sullivan: One additional question - what is the role of R&D in this whole process? How much is Barco investing in R&D to bring out better products in the market?
Mr. Vandenbroucke: R&D is very important. On a global level, Barco is spending about 10 percent of its revenue on R&D. So, in Barco we have a revenue of about 700 million, we invest 70 million in R&D. In BarcoView, the R&D investment is somewhat higher with an average of 12 to 13 percent. R&D is important but has to be guided by a very good understanding of the needs of the market.
Frost & Sullivan: Are we looking for some more worldwide acquisitions of PACS companies by Barco who are operational in different regions?
Mr. Vandenbroucke: We are looking for acquisitions in different geographical regions, or partnerships, or alliances. Not only to establish ourselves in new geographic areas, but also to add new technologies or new competencies to our product range.
Frost & Sullivan: Any other comments that you would like to add….
Mr. Vandenbroucke: From Barco’s perspective we would like to add that the medical imaging industry market is, for us, a very important growth market and we see it as a long term opportunity. We will continuously build and grow our presence in this market through new offerings and also by being more visible on a larger geographical scale- more than we are today. It is a true worldwide business for us.
Thank you so much Mr. Vandenbroucke for your time and answers.
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