Tag Archives: Vendor Sentiment Index

Signify Premium Insight: Futures for the Faithful – Vendor Sentiment Index Q3

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As a young and quickly evolving segment of medical imaging, the AI market is more liable than most to be buffeted by both global headwinds and localised eddies. Amidst these challenges, which include inflationary pressures, the risk of faltering economies and stretched healthcare systems, there are also reasons to be optimistic.

The challenges that providers are facing such as staff shortages and huge backlogs of patients may give impetus to adopt new technologies, while regulatory clearances, investor backing, and greater availability of reimbursement highlight the growing regard in which the nascent market is held. Whether vendors themselves are confident in these opportunities is another matter, one which is explored in the latest Vendor Sentiment Index survey, a key deliverable of Signify Research’s AI in Medical Imaging Market Intelligence Service.

 The Signify View

The latest Vendor Sentiment Index survey, which was conducted between July and September 2022 assesses the confidence both imaging IT vendors and AI independent software vendors (AI ISVs) have in securing pilot sites, commercial sites and the overall market in the coming quarter (Q4, October to December 2022) and the coming 12 months (October 2022 to September 2023).

Broadly, the level of confidence vendors hold is stable, with some, ongoing patterns apparent, such as AI ISVs being overall more optimistic about their prospects, than the more tempered views of the imaging IT vendors – an unsurprising difference given the attitudes needed to launch a start-up into a nascent market. There were also some notable changes, however.

Last quarter’s Index, for instance, saw imaging IT vendors hold, in general, an altogether more pessimistic view of the market. An assessment that has since recovered, with the vendors harbouring more positive views. There are several causes for this dip and recovery, the most likely of which, as suggested in the last quarter’s analysis, is simply that there is less activity over the summer months given summer holidays and decision making often delayed until the autumn. The current Q3 index, which, assesses vendors attitudes towards Q4, is not impacted by these seasonal slowdowns, giving vendors a greater opportunity to make both agreements for commercial deals and for pilot sites.

That isn’t to say that there were no impacts particular to the quarter. Both ISVs and imaging IT vendors are far more confident in their commercial prospects in the coming 12 months than they are in for the upcoming quarter. This may be largely a result of RSNA 2022, which, as a major showcase for both AI and imaging IT vendors, absorbs a significant amount of resource. This effort, which can lead to traction at pilot sites and commercial success in the longer term, does however, hamper vendors’ abilities to focus on commercial opportunities in the nearer term.

Confidence Gap

There was one area that diverged from trends established in previous quarters. In past surveys there has been a relatively stable gap in the different types of vendors’ confidence in their ability to secure pilot sites over the coming months. This is reflection of the typically more bullish attitudes held by ISVs, often hungry start-ups, which only operate in one area, and whose entire reason for being is their belief in the potential of AI. In the latest survey, however, the confidence levels of imaging IT and ISVs has almost completely converged, AI ISVs are relatively far less confident than they were in previous quarters.

This suggests that the pilot site pipelines of AI ISVs are running low, and these vendors are struggling to garner much new interest in adopting their solutions on even a trial basis. Again, part of the reason for these thinning pipelines, beyond the known macro challenges of limited resources to assess AI adoption at providers struggling with long waiting-lists and budgetary shortfalls, is likely to be RSNA, which represents a rare opportunity for these vendors to network and expand their reach and so is requiring of their focus. Imaging IT vendors appear to be less affected by this problem. They also have better-established customer bases, an asset they will be able to tap into to secure pilot site agreements. What’s more, compared to many AI ISVs, the customer bases that imaging IT vendors have, furnished the vendors with solid reputations. An invaluable tool when attempting to convince a provider to be a test case for complex new technologies.

A Consolidated Future

While this is merely a single data point, and conclusions should be drawn gingerly, it does suggest the advantages that imaging IT vendors have compared to many ISVs. Trust is essential in adopting a new technology, particularly from an unfamiliar vendor. While imaging IT vendors can leverage the trust built elsewhere, through other products, AI ISVs must build this trust themselves. This is why clinical validation studies and standout performances at pilot sites to garner positive testimony is crucial. The AI market is likely to become very quickly dominated by incumbents, and smaller start-ups will find it increasingly difficult to gain traction, so any vendor that does not want to risk falling behind must push forward quickly to claim share while it is still available.

This also ties into one of the longer-term trends of market consolidation. Over the coming 12 months, the confidence level of securing a pilot site of the most pessimistic imaging IT vendors was 5/10. The figure for AI ISVs on the other hand was 2/10. This very low level of confidence among some dedicated AI vendors emphasises their worries about securing pilot sites, a necessary precursor in many cases, to commercial rollouts. Given the dwindling funding of some AI vendors, the lack of confidence in even the first stage of commercial deals suggests that some firms may begin to struggle over the next 12 months, perhaps finding themselves turning to acquisitive companies to save them from perishing. For those unable to turn the tide, a market exit or pivot may be looming, but one which can be overcome following a buoyant RNSA show, raising further capital, or even securing reimbursement for their solution.

Converting Pilots

Other AI ISVs are perhaps guilty of another sin: overconfidence. While imaging IT vendors are more confident around pilot deployments in the coming 12 months than commercial deployments, AI ISVs are almost exactly as confident in securing commercial sites as they are in securing pilot sites. This optimism may well be misplaced. Aside from the fact that some pilot sites may not derive the expected value from their deployments the sales cycle, which is typically 9-12 months means that any upcoming pilot sites are unlikely to be converted to commercial sites within the coming 12 months assessed by the survey. As such, it suggests they are very reliant on the conversion of their current pilot sites into commercial sites. This is particularly true given the lack of confidence in securing future pilot sites.

There are factors that could change this picture. New products launched and new partnerships entered into at RSNA will help propel the market forward, as will any additional reimbursement for the use of medical imaging AI solutions, which appears to be gaining momentum. Such changes could well see confidence levels rise among vendors as they would move toward achieving commercial traction. But even so, these changes will favour the better-established AI ISVs compared to the long tail of smaller vendors that will, over time, bear the brunt of the anticipated market consolidation.

Ultimately however, while there is variation and pessimism in some quarters, Q422 and the year ahead harbours a lot of opportunity. AI ISVs have the first RSNA in several years to not be overshadowed by Covid-19 to target a large and likely receptive audience, while imaging IT vendors have had opportunity to understand what their clients want from AI and consider how they can best support their users with the technology. Questions surrounding affordability and value remain, which will ultimately lead to consolidation in the market. But, for those more establish and larger vendors that have covered all the bases, invested in clinical validation and health economics studies, and worked to establish their credentials, they can be confident of making headway as interest in AI continues to grow.

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This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here

Signify Premium Insight: The Power of Perspective: AI Vendor Sentiment Index Q2

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

Co-written by Dr Sanjay Parekh

Each vendor has a unique view of the market. One of the deliverables offered as part of Signify Research’s AI in Medical Imaging Service, the Vendor Sentiment Index (VSI), captures these views and assesses how confident vendors are feeling about the overall imaging AI market outlook, their ability to establish pilot sites and their ability to convert the pilot sites to paying customers or secure new commercial deals over the coming months and years.

With a cocktail of global headwinds, including inflationary pressures and the risk of a global recession, geopolitical tensions, and stretched healthcare systems dealing with a myriad of other priorities, AI vendors could be expected to be nervous about the months ahead. However, with recent success in procuring new (relatively large) funding, and shifts in potential reimbursement (e.g., new CPT codes), there are, for some at least, also reasons to be cheerful.

The Signify View

Data for the latest edition of the survey was collected from vendors during Q2 (April 1st – June 30th) and offers insight into their sentiment towards the following quarter (calendar Q3) and the upcoming 12 months. It includes data from 26 AI vendors, ranging from those with strong global prominence to those which are relatively unknown, alongside engagement from informatics vendors representing more than 58% of radiology global market share, including 6 of the top 10 vendors according to Signify’s vendor market share data.

Some of the findings of the Q2 survey are consistent with the results from the Q1 analysis. AI vendors, for instance remained more confident than their imaging IT counterparts. This makes sense. Imaging IT vendors are, for the most part, longer established, have more historical experience of the market, and frequently interact with a broader array of healthcare providers, companies providing support and tertiary services, and other vendors. Their point of view is likely to be wider than that of a smaller AI vendor, which has a more specialised focus on its market. As such, imaging IT vendors could face a larger number of risks or face greater exposure to them compared to dedicated AI vendors.

In addition, young, hungry AI vendors, developing not only new products but entirely new product categories, using hitherto unutilised technology, and attempting to sell their wares to often sceptical and cash-strapped providers need to be bullish. Why would they take on such a challenging endeavour if they didn’t believe their product promised worthwhile returns?

There are also some more pragmatic reasons AI vendors can be confident in the face of incoming global headwinds. While providers still face barriers such as clinical validation and technical and legal hurdles, which are stymieing the adoption of medical imaging AI tools, progress is being made. In June, for example, Optellum’s solution became eligible for reimbursement, highlighting that AI solutions are making progress towards becoming more cost-effective and a viable value proposition beyond efficiency gains. During the quarter, there were also some significant funding rounds, such as Viz.ai’s $100m haul, highlighting that AI vendors aren’t out on a limb, with investors also confident in the future of the technology. This, in turn, bolsters the confidence of AI vendors’ Q3 and beyond outlook, as reflected in the VSI.

One of the major observations, however, was that the overall results for the second VSI survey (Q3 outlook) were more conservative and less positive compared to the first VSI survey (Q2 outlook). This was especially true for vendors’ outlook on commercial deployments, which is likely to be a significant influence behind the gloomier outlook in the market overall.

Summer Slowdown

Another trend that held over from the Q1 index was that vendors were more confident about the coming 12 months rather than the coming quarter. This is understandable. The Q3 period, July, August and September, is, especially in Europe, often slower for businesses. Staff are taking vacations, and major purchases and installations are often delayed until the autumn. As such for the three metrics assessed (overall market outlook, pilot installs and commercial deployments), it is likely that vendors expect less activity over the summer months, ramping up over Q4 as teams get back from the summer holiday period, and events like RSNA give them a chance to promote their products.

As such, an uplift in confidence should be seen in the next survey, for which data is currently being collected, which assesses vendors’ confidence in Q4 onwards. This will prove to be something of an acid test. If confidence remains low, it could illustrate the severity of the challenges ahead, and weigh on the overall market outlook for the year ahead. Adoption of AI in medical imaging has long been forecast to be a measured process, but a lack of confidence in the ability to find pilot sites and secure new commercial deployments will highlight that the rollout will take longer than expected.

Alternatively, the fall in confidence seen in the Q2 index may instead represent a return to “normality” after the overconfidence observed among some vendors in Q1. At that time some vendors were perhaps overly bullish, with the lingering optimism from the last RSNA show, and the recession of the Omicron wave of Covid-19 offering a cause for confidence. However, it appears vendors may have failed to consider the other global challenges affecting the fortunes of the AI and imaging IT market performance.

Cooling Confidence

How significant the impacts of this tempering of confidence remains to be seen. It could represent nothing but a periodic bump in the road, with the overall trend of the market still overwhelmingly positive. Alternatively, there could be several, relatively swift repercussions. For imaging IT vendors, which are juggling lots of different priorities, a lack of confidence in the near-term commercial potential of AI solutions, including AI platforms, could encourage them to increasingly focus on these other areas. They are, after all, also looking to facilitate transformative changes among providers, with cloud adoption, enterprise imaging strategies, and workflow integrations, among the other burgeoning trends.

This could be particularly true given the reduction in confidence of securing commercial deployments for both AI vendors and in particular imaging IT vendors, whose confidence fell 2.3 points from 7.0 to 4.7 for the quarterly outlook, and 1.9 points for the 12-month outlook from 7.7 to 5.8. AI vendors are focused only on selling their AI solutions, whereas imaging IT vendors must focus on selling a wider portfolio, which often offers greater margins. Customers could expect some AI functionality as part of a broader imaging IT deal, or AI tools could be used as an incentive to make a deal, for example, with these types of negotiations relying on the sacrificing of AI’s potential for broader commercial aims.

Year-End Celebrations

Despite these nuances, confidence among both imaging IT and AI vendors is, overall, expected to improve in the next survey, with vendors likely to feel more optimistic about both the outlook in Q4 and the following 12 months, in terms of both commercial deployments and pilot sites. There are several factors, from funding to reimbursement that have emphasised the potential of the market going forward. Beyond that, RSNA presents vendors with an opportunity to demonstrate and promote products. The corollary of this expected optimism will be a shrinking of the gap in confidence levels between AI and Imaging IT vendors. Imaging IT vendors are likely to have new AI products at RSNA, while the AI capabilities added to their existing solutions will also have matured, rendering AI a more important part of their offering.

Conversely, if the optimism of imaging IT vendors continues to lag severely behind that of AI specialists, it could either signal a change in strategy and a de-emphasising of AI, or market traction is far slower than previously anticipated, despite AI vendors’ bullishness. Longer-term, other trends could start to dampen vendor confidence, which may represent difficulty in the overall market. Increased competition, for example, could make it more difficult for individual vendors to secure pilot sites or commercial deployment, hurting their confidence. However, the fact that the market can sustain such competition is indicative of its overall health (and depth of investors’ pockets). Another, similar factor ties into the ongoing product evolution of AI solutions. As tools are becoming increasingly sophisticated and focusing on entire care pathways and downstream outcomes, or evolving into comprehensive solutions, for example, less complex tools risk being commodified. As this happens, some AI capabilities may become ‘just’ another feature of an imaging IT system, rather than a stand-alone product with a robust value proposition. Some vendors would see this opportunity very differently to others, resulting in varying confidence levels.

Such concerns can be left for the future. At present, different vendors are drawing different conclusions about the opportunity the market offers. The coming quarters offer a chance for AI to make significant progress, allowing vendors to close out the year on a high. However, if this fails to happen, and vendors still fail to see the upside, 2023 could instead become a year of reflection and renewal instead of growth and optimism.

About Signify Premium Insights

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here

Signify Premium Insight: Overconfident or Underappreciated? How AI Vendors Feel in Q1 2022

This Insight is part of your subscription to Signify Premium Insights – Medical ImagingThis content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here.

Co-written by Dr. Sanjay Parekh

A new component of Signify Research’s AI in Medical Imaging Service is its Vendor Sentiment Index. This quarterly analysis will assess how confident different types of vendors are about their prospects in the coming months and years. As well as quantifying and tracking the optimism of vendors throughout the year, the differences in vendors’ assessments of their prospects also offers glimpses into the health of the market, and the wider outlook for AI adoption. As part of a special series for Premium Insights subscribers, each quarter we’ll provide the top-level headlines of the latest analysis and dig into what it means for vendors and the wider market.

The Signify View

The Dunning-Kruger effect is a form of cognitive bias in which individuals with a lower aptitude for any given task are likely to overestimate their ability, while those with a higher level of expertise are more inclined to underestimate their skills. One of the common explanations of this premise is that people who are at the beginning of their journey to mastery of any given skill don’t yet have the knowledge to fully appreciate what knowledge they lack, and therefore are more confident in their abilities than is warranted.

While all the vendors assessed in Signify Research’s vendor sentiment index are far from novices and each has a wealth of expertise in their own domains, a somewhat similar trend could be inferred. Confidence was higher among the AI independent software vendors (herein AI vendor) compared to imaging informatics (IT) vendors; this was true for both their expectations over the coming quarter as well as the coming twelve months.

Imaging IT vendors have a longer heritage and greater experience of the healthcare market, enabling them to appreciate the challenges that lie ahead for the adoption of medical imaging AI. This is reflected in the differing attitudes of both groups of vendors; however some more experienced AI vendors, which have achieved regulatory approval, published realms of clinical validation studies, and commercialised algorithms will also be aware of the difficulty in achieving these milestones.

A younger AI start-up, on the other hand, undertaking these challenges for the first time is far more likely to underestimate them, particularly if they conflate the speed at which the broader technology market moves with the speed that healthcare markets move. Moreover, with strong investment from the investment sector burning holes in their pockets, new AI vendors are under pressure to succeed fast.

The Great Divide

An element of this is predictable. It would, for example, be strange for an ambitious founder of a young, hungry AI vendor, who put all of their resource into growing the start-up, to be overly bearish about its prospects. But there is also additional nuance to these expectations. Many innovators, engineers, futurologists, and entrepreneurs have breathlessly expounded the possibilities of AI, but the difficulty arises in bridging the gap between that potential and the commercial reality. This is also evidenced in vendors’ sentiments from this first benchmark research.

For both specialist AI vendors and imaging IT vendors the sentiment surrounding pilot deployments was significantly higher than sentiment surrounding commercial deployments. This reflects the current state of the market, in which providers are keen to explore and understand the potential of AI in their hospitals, but several barriers stymie their full adoption. Some prevent commercialisation, with factors including regulation, clinical validation studies and even reimbursement hindering vendors’ abilities to promote their products at providers. Other challengers come on the provider’s side, with a lack of budget to allocate to novel technologies, especially due to Covid-19, or a lack of resource to invest in the integration (e.g., deployment of AI platforms), education and evaluation that such tools would require. Additionally, for some providers, AI is a lower priority compared to other more pressing needs, such as operational workflow, enterprise imaging platform integration, and cloud adoption. In response, imaging IT vendors may focus on these customer demands rather than pushing AI tools.

One specific delay, for example, is in MDR CE mark audits, with unregistered companies reportedly facing minimum waits upwards of 12 months. Compounding this delay will be vendors with existing CE mark (MDD) needing to upgrade to MDR classification before May 2024. Without such an audit a solution cannot, in Europe at least, be commercialised. Regardless of the technological capability, such a delay is going to hamper a vendor’s ability to sell its product within the coming year. As backlogs such as this increasingly start to bite, vendors’ confidence could be eroded.

Of The Rough and the Smooth

Most vendors had a cautiously optimistic outlook, the position which is arguably most warranted. There were, however, some outliers which were far more optimistic than their peers. These overly positive attitudes seem to ignore not only some of the broader trends in the market but also some of the specific evidence. There is huge potential in medical imaging AI, but it is foolhardy for vendors to ignore recent events and dismiss their messages. This year alone MaxQ AI has been forced to abandon its medical imaging AI aspirations, while HeartFlow, one of the most successful AI vendors has failed in its quest to list publicly. These, and other events, highlight traps that many vendors could fall into. An unwillingness of VC investors to continue to support AI outfits that don’t generate significant revenues; an over reliance on a limited product and an unwillingness to invest in developing a more clinically valuable solution; and an overestimation of a vendors’ own worth has had significant impacts on these vendors. Vendors who fail to acknowledge these mistakes and proceed with glib optimism are those that are most likely to repeat them.

Some patterns could also be identified in the types of vendors that were most confident. One notable trend was that those with more diverse portfolios tended to be more confident than those centred around a single tool. This makes sense as not only are the more diverse vendors better able to handle upset and disruption, but in many cases the focus on creating a broadly capable solution indicates a willingness to develop sophisticated, clinically useful tools, rather than relying on a foundational product.

Conversely, other vendors are unusually pessimistic. This is result of where individual vendors are in their own journeys, a force stronger than that of the broader market conditions. This could be the result of an imaging IT vendor turning away from partnerships and focusing on native algorithm development, a scenario which promises longer-term advantages but near-term uncertainty. Alternatively, this could stem from targeting larger, but more crowded markets (e.g., breast imaging AI), where a vendor could face an uphill battle to gain traction.

Great Expectations

Ultimately, despite the nuances of the individual vendors indexed, some broadly applicable conclusions can be drawn. Both groups of vendors are, in general, optimistic about their prospects. At the time data was collected in January, the Omicron variant was having a significant impact on health systems across the world, although this was expected to lessen as the year went on. This explains the more positive sentiment for the 12-month period compared to the quarter. On the other hand, Russia had not yet commenced its brutal assault on Ukraine, so the possible repercussions of this will be seen in the upcoming index, especially for the longer-term outlook.

In general, however, this optimism tends toward overconfidence. A very positive outlook for pilot studies is fair, but vendors’ confidence in their ability to make commercial headway on the back of these pilots is, for the most part, over ambitious. Given the scale of challenges surrounding validation and approval a time frame of around 24 months would be more realistic, a window that would tie in with Signify Research’s forecasts for the wider medical imaging AI market’s growth. As such, it is projected that vendor sentiment will remain unchanged, or slightly positive (for the upcoming quarter’s index.

Confidence levels could well start to slide as the realities of the medical imaging AI market bite. But, for those vendors with the right tools, which harbour the virtues of some of the market’s most successful vendors, the sky is still the limit, the journey may just be longer than they think.

About Signify Premium Insights

This Insight is part of your subscription to Signify Premium Insights – Medical Imaging. This content is only available to individuals with an active account for this paid-for service and is the copyright of Signify Research. Content cannot be shared or distributed to non-subscribers or other third parties without express written consent from Signify ResearchTo view other recent Premium Insights that are part of the service please click here