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ABI Launches New Service Offerings for Mass Spec Users; Bucks Asset-Management Trend

This story originally appeared in Biocommerce Week, a newsletter that has been discontinued.
 
This article has been updated to clarify details of the service partnership between ABI and Agilent.
 
Applied Biosystems this week rolled out three new services worldwide targeted to users of mass spectrometry systems sold by the ABI/MDS Sciex joint venture.
 
The new services are designed to provide a focused and enhanced program for a specific workflow, and ABI expects to roll out similar programs for other workflows in the near future, a company official told BioCommerce Week.
 
Like many other instrument vendors in the molecular biology tools space, ABI has placed an increasing focus on its service offerings. But the firm’s strategy is markedly different than those of some its competitors, who have focused on building broad-based asset-management programs targeted to larger pharmaceutical and biotech firms.
 
“In some cases, we lead with our service, not with our products,” said Ramin Cyrus, vice president of marketing and business development for ABI’s global services business. “We’re starting to get into markets where we don’t even have products but just offer them a service.”
 
ABI’s global services group has over 1,500 people, Cyrus noted. Since the services group became its own profit center three years ago it has grown revenues in the double digits, he said.
 
“We started off as just a repair service, but we’re moving up the chain into these value-added services, such as application support, software support, [and] we’re doing a lot of work in regulatory validation services,” Cyrus told BioCommerce Week. “One of the trends we’ve been seeing is customers asking for a single vendor to provide them a complete workflow solution.”
 
The ABI services launched this week include a maintenance program for high-performance liquid chromatography systems manufactured by Agilent Technologies, a software validation consulting service for labs operating in regulated environments, and an expanded web-based product for remote system monitoring and diagnosis.
 
Under its alliance with Agilent, ABI will service Agilent’s 1100 and 1200 Series HPLC instruments that are sold with ABI/Sciex mass specs. Agilent will provide training, OEM parts, and documentation to ABI’s field service engineers, and ABI will serve as the single point of contact for service.
 
The alliance is non-exclusive, and ABI could sign similar agreements with other LC vendors, Cyrus said. “We’re working on similar arrangements, not necessarily with LC but with other vendors with complementary” technologies, said Cyrus. For example, ABI could work with a sample-prep vendor in another service program.
 
Agilent already has its own Intelligent Services program that covers its HPLC instruments. The program, which provides web-based, remote instrument monitoring and diagnostics capabilities for Agilent’s instruments, will eventually be expanded to include other vendors’ equipment covered under Agilent’s Lab Resource Management offering.
 
ABI also launched the Analyst Software Validation Support Service to simplify the auditing of mass spec systems used in regulated drug discovery and development applications. In many cases, customers’ in-house resources have handled such validation services.
 
Cyrus said some customers wanted ABI to provide the validation services because of the firm’s application expertise and because it knows its own instruments best.
 
Also part of the new services offering is ABI’s Smart Center Online, which expands the functionality of its Smart Services remote instrument monitoring service. The new product enables mass spec administrators to create a customized web-based portal for viewing detailed information about specific instruments.
 
The center also allows users to monitor system alerts and alarms, access recent and archived performance reports, and interact with ABI support specialists for diagnostics. The service is expected to reduce costs by facilitating remote diagnosis and determining a course of action prior to a site visit.
 
“You’re seeing the tip of the iceberg,” said Cyrus. “We’ve got other workflow arrangements. This one is really geared toward our proteomics and small molecule business, [but] we’re working on similar arrangements in DNA sequencing, agriculture, and quality safety testing. This is the first one to come out because pharma is such a large account for us.”
 
ABI said it is rolling out these new services in response to a growing number of customers who would prefer direct OEM expertise rather than utilizing a broad-based asset-management program.
 
Asset Management on the Wane Already?
 
In providing a targeted service program with a focus on specific types of workflows with which the firm has extensive knowledge and experience, ABI is taking a very different approach from some of the bigger players in the research tools space. A few of them, including Thermo Fisher Scientific, Agilent, and PerkinElmer, have opted for a broad-based asset management program that provides much greater oversight of a customer’s full line of instruments.
 
The asset-management model is relatively new for the life science tools industry and extends far beyond traditional service contracts. It follows a paradigm established among hospitals in the broader healthcare industry.
 

“In many cases, customers that have gone on asset management are going to their own in-house capabilities or back to the vendor … you need to specialize.”

The model, which is riskier for customers than standard service contracts, essentially turns over the whole lab to a single provider. In return, the customer is promised cost savings, on-site service, and a significant decrease in the time necessary to deal with individual service contracts.
 
In addition to Agilent’s Lab Resource Management offering, Thermo Fisher earlier this year launched its 3D Model integrated service offering, which focuses on a customer’s business objectives, the environment in which it is operating, and its product mix (see BioCommerce Week 3/28/2007). As part of the service, Thermo Fisher reviews these three dimensions and provides an asset-management plan for each client.
 
Meanwhile, PerkinElmer’s OneSource service program, which was launched in 1999, has rapidly expanded both organically and through acquisitions over the past few years and now embraces the broad-based asset-management model (see BioCommerce Week 6/28/2006).
 
Earlier this year, Brent Saliman, worldwide program manager for Agilent’s LRM business, told BioCommerce Week, “Right now, customers are not very happy to be held captive by their manufacturer because they won’t play in the service model the companies want them to play in.” (see BioCommerce Week 5/23/2007)
 
But that has not been ABI’s experience, according to Cyrus, who said that ABI’s customers do not prefer the far-reaching asset-management programs. “Actually, asset management is starting to kind of wane,” he said.
 
“In many cases, customers that have gone on asset management are going to their own in-house capabilities or back to the vendor,” said Cyrus. “The reason for that, we believe, is that asset management is way too broad. You need to specialize.”
 
He said that the asset-management providers make promises of considerable cost savings that “have never been realized.” He said ABI’s approach is to “stick to our knitting” and “focus on what we know.”
 
Cyrus also said asset management is a very low-margin business, and didn’t make sense for ABI.
 
“I think [asset management] found a niche, and it’s going to stay in that niche,” said Cyrus. “You need to be a company of a certain size. For some companies it makes sense, but I don’t think it’s going to be the wave of the future. You have to stick with the science at some level, and say ‘what are the services those scientists want,’ not just what the procurement office wants.”
 
Within the next two years the instrument vendors will have an answer from the market as to which asset-management, or service model, they prefer, said Agilent’s Saliman. “If people fail in this space, the model won’t last. People are not willing to put their businesses at risk for a few dollars of cost savings.”

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