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The medical device industry is going through a very interesting and comprehensive transformation that spans across technology, governance, policy, innovation, and business models. Despite these changes, some of the core challenges within this industry, such as compliance, profitability, and security, remain important.

The two important drivers of change within the medical device industry are how manufacturers monetize their technology and how they secure their devices through the software controlling them. In fact, device vendors of all types whose primary business model was to price per device and sell accordingly are now embracing software monetization concepts to increase revenue. Interestingly, more device vendors are coming to realize that the hardware components of their products are becoming commodities and it is the software where innovation is taking place, thus giving them the ability to more fully monetize and drive incremental revenue.

In order to successfully monetize and secure the software IP, medical device manufacturers will need to leverage a successful software monetization strategy. Within the software monetization and authorization space there has been significant innovation in the cloud and embedded space. While there is a definite overlap in functionality, device vendors whose primary focus is IP protection lean toward an embedded solution, while vendors whose focus is on business transformation leverage cloud monetization solutions.

First, examine the importance and need for security and how medical device manufacturers are securing the software that runs these devices. The increased functionality controlled by the software layer behooves the need for IP protection and control, primarily because medical device manufacturers now face problems that have plagued traditional software organizations for years, including deliberate and occasionally unintentional misuse of their software, product and feature overuse, competitive IP theft, product reverse-engineering, and code tampering. The key to controlling access and use of a device really means controlling who is granted access to the software running the device, when they’re granted access, and to what extent.

Protecting Valuable Assets

The software embedded within a medical device is a very valuable asset. It not only holds all the development secrets hackers or competitors would love to gain access to, it also determines how the product functions. Stolen code can end up in the hands of competitors or be used to reproduce pirated versions of a similar product. While theft of trade secrets is one threat, for many medical device manufactures, so is tampering. The cost associated with a malfunctioning device because of software tampering is extremely high both in economic terms as well as impact on life. These scenarios have great potential to damage a brand and overall market share and therefore decrease revenue potential. Tampering with the software embedded within a device can change how the device functions. This can provide users with access to features they have not paid for, or even worse, could result in regulatory compliance problems. Without proper protection, medical device vendors are unknowingly leaving their code vulnerable to tampering.

By effectively controlling access to the source code of the software, the device vendor is able to protect revenue and safeguard the integrity of both their brand and their products by preventing product tampering, reverse engineering, and IP theft.

In 2013, Frost & Sullivan came out with a study on the top five technology trends in the medical device market. Now explore how adopting a cloud monetization solution can enable and drive adoption across some of these important trends:

Multi-functionality of the product: Manufacturers need to build versatile systems capable of addressing multiple needs due to price sensitivity and lack of floor space. In the past, if a vendor wanted a premium and a standard version of a piece of equipment, they would build two applications for installation on two different hardware platforms. Now with cloud and feature-based licensing and entitlement management, device manufacturers can develop and maintain a single, feature-rich application that is installed on all devices. The functionality of the device is then controlled through licensing. This enables software vendors to ship the same product with different functionality to different customers at varying price points and upgrade customers remotely. These changes can be made in real time and tied to a user (surgeon/operator) giving them the ability to build once and deliver many.

Big Data: There is a significant uptick in the amount of healthcare data captured, which in turn impacts smart or “AI” driven diagnostics. Similarly, leveraging a cloud solution for monetization and usage tracking can give device manufacturers true visibility into how their devices and applications are being used and what features and functionality are being consumed over others. This insight will enable them to make smarter investments in their products and also give them valuable intelligence on pricing and positioning their devices better.

Low-cost alternatives: Driving down costs has become a significant driver for most medical devices. This is a result of increased competition as well as the need to expand into developing markets that are historically price sensitive. One way medical device vendors can tackle this problem is by leveraging cloud solutions to introduce alternative business models. Several vendors are moving to subscription- or consumption-based models and are leasing their machines to hospitals and charging on a pay-as-you-go model. Actual usage (e.g., number of scans, images, X-rays, etc.) can be captured and collected from a medical device. This information can in turn be put into a billing solutions rating table and the hospital can be invoiced seamlessly. Similarly, the hospital can pass on this true usage cost (with a mark-up) to the patient or the insurance company. Device companies can offer medical facilities in price-sensitive geographies the option to lease their device (in a subscription mode) at a fraction of the cost and then billing based on consumption. With the ability to track usage, device manufacturers now have the ability to move these medical facilities from a CAPEX to an OPEX model.

Download this article in .PDF format
This file type includes high resolution graphics and schematics when applicable.