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Software Vendors Cautiously Optimistic as Illumina Readies BaseSpace App Store for Market

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Cautious optimism seems to be the prevailing mood among some of the bioinformatics vendors that have signed up to develop analysis tools for Illumina’s BaseSpace applications store.

In conversations with BioInform, most companies on the initial developer list described Illumina’s app-based model as a good fit for the life sciences space but made it clear that they will be keeping a close eye on adoption rates when the store officially opens in the fall.

Illumina first introduced BaseSpace Apps at the BioIT World Conference in April this year and released a list of companies — all of whom currently offer web-based or cloud-enabled tools — that it had tapped to develop and offer apps for sale (BI 4/27/2012).

The list includes Diagnomics, GenoLogics Life Sciences, Genomatix, Golden Helix, Ingenuity Systems, Knome, Omicia, Spiral Genetics, Omixon, Real Time Genomics, Station X, Integromics, Biomax Informatics, Biomatters, and Strand Life Sciences.

Earlier this summer, Illumina announced a pricing structure for cloud access that will go into effect when its HiSeq sequencers are linked to BaseSpace next quarter. Under the pricing scheme, customers will receive one terabyte of free cloud space for storing and processing data. They will also be able to purchase additional storage in increments of one terabyte or 10 terabytes — one terabyte will cost $250 per month or $2,000 upfront for a full year, while 10 terabytes will be $1,500 per month or an annual up-front fee of $12,000 (BI 7/27/2012).

For the initial launch of BaseSpace apps, most vendors on Illumina’s partner list are developing single applications that will offer a subset of the functionalities that exist in their standard software suites.

Omixon, for instance, is developing an HLA genotyping application for identifying disease associations using whole-genome or whole-exome data as well as from targeted sequencing data, Attila Bérces, the company’s CEO, told BioInform.

The app, which is currently in beta testing, will also be included in Omixon Target, the company’s desktop software tool for analyzing targeted next-generation sequence data, he said.

Another company on Illumina’s list, Golden Helix, intends to enable its newly developed visualization tool, dubbed GenomeBrowse, to stream information in real time from BaseSpace, Andrew Ferrin, Golden Helix’s executive vice president for business development and services, told BioInform.

He also said that the company intends to offer GenomeBrowse for free via its own cloud infrastructure starting at the end of the month.

The browser will let users visualize data from genes and variants across multiple samples, as well as look at annotation information from public resources among other capabilities, Gabriel Rudy, Golden Helix’s vice president of product development, explained to BioInform.

Similarly, Biomatters plans to offer a free genome browser beta application as its first product for BaseSpace’s store, although the firm is working towards making its entire informatics platform interoperable with Illumina’s cloud, Matthew Landry, the company’s chief technology officer told BioInform in an e-mail.

Landry said that the browser “performs extremely well over high latency links, and, ultimately serves as a proof point for our data access and scaling systems.”

Meanwhile, Ingenuity is pulling some of the capabilities from its variant analysis tool into an app that will be linked to BaseSpace, Bryant Macy, the company’s senior vice president of products and marketing, told BioInform (BI 1/12/2012 and BI 2/17/2012).

Macy explained that the app will include capabilities that let users hone in on relevant potential casual variants from lists containing millions of mutations from whole-genome or whole-exome sequence data.

For its first app, startup Station X is developing a visualization tool comprised of functionalities from GenePool, its web-based sequence analysis software. Richard Goold, the company’s CEO and co-founder, told BioInform.

One exception to the single application rule is Spiral Genetics, who is working on integrating its cloud platform with Illumina’s, which will enable researchers to analyze their data with the its cloud-based analysis tools via BaseSpace, Alindrina Mangubat, Spiral’s president and CEO, told BioInform.

The company offers a cloud-based bioinformatics service called Spiral Cloud, which provides tools for reassembly, consensus calling, variant detection, basic variant filtering, and annotation for use in applications such as cancer, population genetics, and agricultural research projects. It also offers a cluster-based version of its cloud platform.

Finally, Omicia CEO Martin Reese told BioInform in an e-mail that his firm is integrating its clinical genome interpretation platform with BaseSpace in a manner that will allow users to “navigate” from Illumina’s cloud to Omicia’s system.

Most vendors said they are prepared to launch their apps when Illumina opens its store later this year. An Illumina spokesperson told BioInform this week that the company hasn’t set a date for when that will happen.

The Tricky Thing

One of the trickier parts of the app store model is selecting appropriate price points for the tools in it, Chris Dagdigian, co-founder and director of technology for life science informatics consulting firm BioTeam, noted in an earlier conversation with BioInform (BI 7/27/2012).

Illumina is allowing app developers to pick the prices for their tools. Alex Dickinson, Illumina’s senior vice president of cloud genomics, told BioInform in an earlier interview that the company will split the revenues generated from app sales with its partners — Illumina will receive 30 percent of the sale revenues and the remaining 70 percent will go to the app provider (BI 7/27/2012).

Dagdigian pointed out that “with individual developers controlling the pricing on their tools there remains the risk that authors may misjudge the economics and make pricing decisions that users are not happy with.”

Most vendors appear to be staying away from licensing or subscription-based approaches, but it's not clear how they are setting appropriate pricing for their tools. Some companies, such as Station X, told BioInform that they are still working out pricing details and models, while others have settled on specific price points — a pay-per-sample model in most cases — but declined to disclose exact amounts.

One notable exception is Spiral Genetics. CEO Mangubat told BioInform that the company plans to offer two pricing options for its offering — a pay-as-you-go model that will cost $2,300 to analyze a human genome including things like consensus calling, variant detection and filtering, and annotation; and a yearly subscription, under which the same analysis of a single genome will cost about $1,900.

She further stated that under either pricing option, users will be able to purchase and spend analysis credits, and that analysis costs will also depend on the amount of data and the complexity of the analysis.

Meanwhile, companies like Ingenuity and Omixon said they will charge customers on a per-sample basis, although neither firm disclosed how much each sample will cost.

Under this model, users will “be able to pay for as much of the software as they actually need” and can avoid signing large commercial licensing agreements, Ingenuity’s Macy said.

For its part, Golden Helix isn’t fixing a price tag on GenomeBrowse itself, but Rudy said the company will likely charge customers to integrate their BaseSpace accounts with the visualization tool — hosted on Golden Helix’s own cloud infrastructure — which will cover the cost of server-side resource utilization

He also said that company might consider a yearly subscription for customers to access BaseSpace, depending on “how high that utilization cost is to us,” to ensure that users have a “sustainable” means of accessing their data.

Biomatters’ Landry said the company has some ideas for pricing but “it is a bit soon to comment on the ultimate pricing model for the translational analytical tools we release.”

However, “I think there is a lot of learning to do about usage patterns,” he said. “This type of tool model is fundamentally new, and so too will be the behavior of users. We create pricing models to best suit the habits and expectations of users as we see them, rather than confusing them with something arbitrary or merely easy for us to administer.”

Ultimately, vendors really won’t know if they’ve priced their products right until they bring them to market.

“It’s up to the app provider to price it and then in the end the market will determine whether that price is right or wrong,” Omixon’s Bérces said.

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The Market for Apps

The market for apps has brought considerable commercial success for some companies in the telecommunications industry, but whether it can do the same thing for bioinformatics vendors is open to discussion.

“There are a lot of things to be seen. It’s a very interesting prospect and I think Illumina has a pretty forward-looking vision about having bioinformatics not be a bottleneck and [Golden Helix is] all about that, as well,” Golden Helix’s Rudy told BioInform this week.

However, “an app store ecosystem requires a certain critical mass” of users, vendors, and tools in order for it to be attractive to the market, and at this point “I’m not quite sure [about] the quantity of vendors that are really going to be ready to utilize that model. … I am also not quite sure of the quantity of users that are going to make it worth vendors while to participate,” he said.

It’s also worth noting that the bioinformatics app market has a different focus from Apple’s app store, for instance. The former is more services oriented while the latter is more consumer oriented, Rudy pointed out. “That’s going to be interesting to see how well the translation of that business model moves into this market,” he said.

At the end of the day, it won’t be clear just how successful an apps-based approach will be until it’s put through its paces, he said.

Station X’s Goold echoed similar sentiments. An app-based approach for bioinformatics “makes a lot of sense” — especially given the size of current datasets — “but only time will tell what the adoption rate will be,” he said.

He also noted that some customers, such as clinical users, might not be so keen on putting their genome data on a public cloud.

Biomatters’ Landry also described Illumina’s move as a sensible one. “Sooner than many think, we will collectively stop agonizing over data size and location. We will depend on secure, scalable, geophysically dispersed storage and computation. The analysis questions and results are what really matter,” he said.

Looking at the broader picture, “app stores are great mechanisms for leveling the playing field for analysis method creators big and small, so we have high hopes for the model making ever-greater degrees of analysis accessible to researchers worldwide,” he continued. “I think this will be a net win for bioinformatics — even if it disrupts some of the old ways of thinking and conducting business.”

While an app-based approach could gain some traction in the community, apps aren’t likely to replace standard software packages any time soon, some vendors noted.

For one thing, customers have diverse needs and as such “there is no one-size-fits-all-solution,” Omixon’s Bérces pointed out.

He added that apps are likely to appeal more to customers who don’t have access to good IT infrastructure or who aren’t dealing with “sensitive” data, he pointed out.

More generally, Illumina’s actions reflect what seems to be a shift away from installing and maintaining localized hardware in the bioinformatics space, Ingenuity’s Macy said.

“Personally I think that a lot of solutions are moving to the cloud these days — in consumer markets and in corporate markets and in scientific computing markets — largely driven by the fact that there are not many benefits of maintaining that computing capacity locally and there are so many other benefits of having them available within the cloud and the ability to be able to share those resources,” he said.

The Illumina Advantage

Aside from the incentive of potential app revenues, there are advantages to choosing to work with Illumina, vendors said.

For instance, Spiral Genetics’s Mangubat said the arrangement “gives us access to the data more quickly and gives us an easy way to integrate with other downstream bioinformatics tools.”

In addition, partnering with Illumina provides access to more specialized tools, she added. For example, “BaseSpace has a number of integrators that can take the list of variants we generate and help researchers filter them down to find the variations that are likely to be the causal mechanisms in the disease, drug metabolism, or other phenotypic display,” she explained.

Speaking about the benefits of the BaseSpace app store in general, she noted that providing “a unified platform that allow[s] for the integration of all of the different bioinformatics products will be great for the community and the advancement of the field.”

“No one company will be able to produce all of the algorithms needed for every research field,” she pointed out.

Ingenuity’s Bryant described BaseSpace as “a natural extension of Illumina's sequencing instruments,” but one that “stops short of providing biological insights,” which is where products like those offered by Ingenuity come in.

“BaseSpace minimizes many of the complexities of basic sequence data processing. Ingenuity applications grab post-processed data and quickly lead researchers to accurate new biological insights like identifying disease-causing genetic variation, new genetic markers for molecular diagnostics, and many other novel biological discoveries from their sequence data,” he said. “It's like chocolate and peanut butter – they taste good separately, but are even better together.”

For Station X, “we see … exposure to a potentially broader and different audience than we might otherwise reach, and we also see a value in letting Illumina handle the transactional overhead on our behalf,” CEO Goold said.

Golden Helix’s Ferrin sees a similar benefit for his firm.

It’s an “opportunity to help a larger audience of investigators become analytically empowered,” he said. “If BaseSpace catches on as Illumina hopes, and investigators do flock to it, a wider audience will be given the chance to use our software tools, helping them get more out of their data, completing their research faster. That’s obviously good for us, too.”

Not so Fast

Not everyone in the bioinformatics arena is convinced that Illumina’s offer is a good fit for their products.

CLC Bio, for instance, hasn’t jumped on BaseSpace’s bandwagon — or any other “non-commercial” cloud-based environments for that matter — and isn’t planning to do so anytime soon, Lasse Görlitz, the company’s director of communications, told BioInform in an e-mail.

He explained that while the company can “certainly see and understand a need for the various cloud-based tools that are currently in the market, those tools still require some scripting or programming proficiency to set up and run” whereas “our analysis platform focuses on delivering the analyses through an intuitive graphical user interface, enabling non-programmers like molecular biologists and clinicians to set up, run, visualize, and compare their samples.”

Furthermore, while “it might have made sense to focus on a single platform” prior to the rise of benchtop sequencers, “the last one and a half years have certainly shifted that perception,” he said.

“Our customers are extremely pleased with being able to analyze datasets from different platforms in the same software package, even being able to mix the different platforms to do hybrid assemblies — typically mixing long and short read datasets,” he said.

As such, the company “will focus on continuing to develop what our customers are requesting while also enhancing our platform with third-party plugins.”

Meanwhile, some others are eyeing Illumina’s offer but haven’t committed themselves to the model just yet.

In an email, Tom Schwei, DNAStar’s vice president, chief financial officer, and general manager, told BioInform that his firm is “evaluating our approach to Illumina’s BaseSpace cloud, but no decisions have yet been made regarding our participation in it.”

The company intends to maintain its primary business model for now, which is to “offer software to scientists on their desktop computers.” However, “as alternative approaches arise, we will consider them and proceed in a manner that will make the most sense for DNAStar, our customers, and the market in general,” Schwei said.

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