Lab Soft News: Abbott Acquires Starlims; Speculation About a Future Direction for the Product

Mr. HIStalk reports some interesting news -- Abbott has acquired Starlims. Here is his account:

Abbott Laboratories will acquire Starlims Technologies, an Israel-based lab systems company, for $123 million. It sells systems to hospitals, HMOs, reference labs, and pharma labs. All Web-based, zero client, and high tech, running the presentation code in a .NET control in the browser. Abbott mentions wanting to get into healthcare informatics, so perhaps this has more than the obvious significance.

Here are some more details from the press release:

Abbott Laboratories ...has agreed to acquire Israel-based Starlims Technologies Ltd for $123 million to boost its position in the global diagnostics market. The deal amounts to $14 per share for all outstanding Starlims equity....The acquisition will give Abbott Starlims' advanced web-based applications to help laboratories store, retrieve and analyze clinical, managerial and administrative data, the company said.

So, what may have prompted Abbot to acquire Starlims? First of all, LISs and LIMSs are first cousins. Both support the work of laboratories with the former term used for systems installed in hospital and reference labs and the latter deployed in a broader swath of facilities including industrial testing labs (see: LIS vs. LIMS: It's Time to Blend the Two Types of Lab Information Systems). Abbott has been trying to find its way into IT territory for a number of years with special emphasis on middleware. Their Maestro product goes way back to 1993 and was sold as an intelligent workstation. It did not survive in the market. LIS/LIMSs have come a long way in the last 16 years marked, in part, by the emergence of relatively low cost web-based LISs/LIMSs such as Starlims

I have made occasional previous references to the concept of software-as-a-service (SaaS) which refers to the business model of renting software rather than requiring the end-user to purchase it. This term is now being replaced by the term Platform-as-a Service (PaaS) which is defined in the following way in the Wikipedia: The delivery of a computing platform and solution stack as a service. It often goes further with the provision of a software development platform, that is designed for cloud computing at the top of the cloud stack. In a recent note, I predicted that the provision of digital pathology services would soon include cloud storage of the image files generated in pathology departments (see: Digital Pathology Offered as a Service Rather Than a Product).

Putting all this all together, I think that it's possible that Abbot has the following scenario in mind as a long-term goal: sell to clinical labs, as an integrated package, analytic instruments, reagents, and test result management supported by a cloud-based LIS/LIMS. Pricing would be on a per-click or taxi-meter basis. This would be the first PaaS offering for the clinical lab industry. Of course, it's also possible that Abbott's short term goal, and perhaps only goal, is to just run Starlims as a LIS/LIMS vendor without any attempt to integrate it into their IVD core business. I sincerely doubt the latter idea because it drifts away from their core competency.