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Lion, IBM Extend Partnership; LHS Moves to IBM Platform for On-Demand Informatics

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Seeking to meet the informatics demands — but tight budgets — of the small-to-medium sized biotech market, IBM and Lion Bioscience have expanded their existing partnership to offer internet-based on-demand hosted computing services.

Under the new agreement, IBM will now provide all the hosting requirements for Lion Hosted Services (LHS), which Lion began offering a year ago. SimUtility, SGI, and Genuity originally provided the hardware and managed hosting capabilities for the system. Now, it will be hosted via an IBM e-business hosting center in New Jersey, and Lion is currently in the process of porting its applications to the IBM infrastructure, according to Daniel Keesman, chief business officer at Lion.

The full system is expected to go live at the end of January. Keesman said that there are currently eight LHS subscribers in the US, as well as seven clients in Europe who use the system to access the company’s ArrayBase database. LHS currently offers Lion’s SRS integration system as well as its BioScout and GenomeScout sequence analysis applications. In line with the new agreement, Lion will write a wrapper to link SRS with IBM’s DiscoveryLink data integration middleware, so users of the on-demand service will have access to public domain databases using both integration tools. Lion’s DiscoveryCenter integration system will also be available.

Both IBM and Lion expect on-demand informatics to be of interest to small and medium-sized biotech firms who can’t spare the resources to acquire and maintain a comparable in-house infrastructure. “A lot of biotechs have ever-increasing needs for storage and computing power, and they want to run applications, but they don’t necessarily want to spend the time knowing which configuration is the best to run it on, how much should they increase their capacity, and so forth. So we believe the notion of on-demand is going to become more and more important for the small and medium market,” said Anne-Marie Derouault, director of business alliances and distribution channel management at IBM.

Subscription prices will vary according to the number of applications a client wants to use, the number of users, how often it will be used, and other criteria, Derouault said, adding that “it’s more cost effective than if they had to buy licenses to all these applications one at a time.”

While not able to provide specific numbers, Keesman estimated that the costs of hardware infrastructure, maintenance, and software licensing fees for a typical in-house installation would run three to five times higher than a comparable LHS subscription.

Sound Familiar?

This is IBM’s first venture into hosted services for life sciences, and the company is betting it will fare better than its predecessors in this market, such as Viaken and DoubleTwist, who were unable to make a successful business out of internet-based informatics.

“There’s certainly commonality with the ASP model,” Derouault noted, but pointed out that IBM has several years of successful experience with hosted services for other vertical markets, and also has a much broader infrastructure and sales force to draw from than smaller firms who offered similar services in the past. “IBM has a whole cross-industry on e-business on demand. Computing on demand is starting to appear as another trend, just like grid computing,” she said.

Said Keesman, “We believe that this market is still in its very early days. In the genomics hype, there were companies that provided this, but I think it was just too early.”

On-demand computing “is not going to be the bulk of our business,” Keesman added, estimating that it might provide 10-25 percent of the company’s total revenues over time.

Both Keesman and Derouault noted that the lower price point of on-demand computing is expected to attract future clients for larger in-house installations or customization.

Lion is the first, but not necessarily the only, partner for IBM in this offering. The agreement is not exclusive, she noted, and complementary third-party applications may be added to the system down the road.

Keesman said Lion is taking an active role in expanding the hosted services offering in this manner: “We know that we can’t provide every individual capability by ourselves, so we are currently talking to other third parties that might be interested in putting their application portfolio, or at least parts of them, on Lion Hosted Services as well.”

— BT

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