Thermo’s Bold Bet on LIMS-on-Demand

By John Russell

March 25, 2020 | For several years the LIMS market (roughly $400M worldwide) has been stuck in neutral. Indeed, depending upon whose estimate you believe, perhaps 80 percent of labs forego the use of commercial LIMS for a variety of well-documented reasons – high cost, year-long deployment efforts, inflexibility, etc. That’s all about to change, says Kim Shah, ThermoFisher Scientific’s director of marketing, informatics, and Thermo will lead the charge.

Yes, this is Thermo we’re talking about, the giant instrument manufacturer whose supersized LIMS offerings are often portrayed as the archetype for LIMS suitable mostly for big companies with far-flung operations, big IT staffs, and big budgets. The operative word is BIG. No one denies the systems are powerful and confer competitive advantage. They are just not for Everylab Inc.

No longer, says Shah. Early this month at PITTCON, Thermo rolled out its LIMS-on-Demand initiative in which the company will deliver its powerful LIMS using a software-as-a-service (SaaS) model. Thermo’s introductory offering is designed to lower the barrier to entry: “For six months we will give three named user licenses along with traditional set up – set up of the database, showing them how to log in, online tutorial and webinars and all that stuff - for $9750.”

The cost structure changes to $375 per user per month after the introductory period, “but before we get there, the users have the right to walk away if for some reason is didn’t work for them,” says Shah.

Thermo seems strongly committed to the effort. The company has created a separate website – www.limsondemand.com -- and filled it with a variety of tutorial, support, and marketing material. Shah says about ten percent of his team is dedicated to the effort and it’s his fulltime mission. The target market extends down to labs with as few as three workers, which according to Shah is roughly when communication issues around tasks such as sample tracking arise.

It’s not new for manufacturers to provide diverse software for their instruments. Indeed, virtually all instrument makers have discovered the software market and they increasingly bundle various device management, data management, and select analytics software offerings with their products – but not LIMS.

There’s a good reason for this, Shah says wryly, “No instrument vendor wants to say to a customer, ‘I’ll give you this instrument along with a LIMS but it will take you a year to use the LIMS.’ In effect you’re saying I’ll give you a car but frankly you won’t be able to do anything with it for a year because you won’t know how to drive it.”

What’s changed, says Shah is the life science market’s acceptance of SaaS – belated acceptance in his view. He points to efforts by Sciformatix, a young company with a hosted LIMS (SciLIMS) offering, and GenoLogics’ web-based collaboration tool (LabLink) as demonstrating market acceptance and demand. The SaaS model is the way of the future for very many applications, he insists, and the client server world with its blizzard of license fees and support requirements will diminish.

Think salesforce.com, Shah says, the web-based customer relationship management tool which has enjoyed great success and growth. “It took them about five years to get to a few thousand customers and [then growth soared]. I suspect that’s what will happen here because some of these things are just laws of nature. There’s no reason why this industry or this application area should be any different.” It is certainly clear that the recent recession and industry-specific pressures have inclined all of biopharma to externalize costs where possible.

Shah emphasizes that Thermo proceeded cautiously so as not to disrupt its existing business. Rather than rewrite its existing LIMS code, Thermo purchased technology to put a web-enabling “wrapper” around the existing product. Over a couple of years, it worked with customers testing the product in a variety of configurations – browser-based, but server inside the user company, browser-based but with the server outside the user’s firewall, etc.

The new offering is definitely ready for prime time, he says, and will deliver all the advantages of a full-feature LIMS in a highly affordable and usable way. Nearly as valuable to both customers and Thermo, says Shah, is the fact that reaching customers through a hosted log-on system essentially creates a new marketing channel to interact with customers.

“You get the lab manager used to this notion of logging into this system and being online to get to the LIMS, but each time they go online there could be a message waiting for them about a new method development or a new SOP or a new government ruling,” he says.

It’s interesting to look at the evolution of LIMS use and functionality. Regulatory compliance was a big driver through LIMS’ first decade, Shah says. Most LIMS were used “primarily to automate paper processes in the lab and automate the process of taking data directly from an instrument into a piece of software. These steps were important in reducing errors, providing audit trails, and helping users to reach and maintain GLP practice. I think a whole decade or so was just that,” says Shah.

Early LIMS software, he says focused sample logging, sample tracking, data handling, and some limited data analysis [such as] calculations of areas under a curve, pass/fail decisions.

Globalization and the rise of the internet drove LIMS expansion (use and functionality) in the second decade. Citing Big Pharma as an example, Shah notes that companies began operating in multiple geographies and started diversifying and outsourcing much of their value chain (clinical trials, some manufacturing, piece of R&D). “The issue became how do you harmonize all these processes. So LIMS as a category once again came into play, but this time around creating standards for processes, methods, set-ups, and those kinds of things.”

In the third decade, he says, companies started to look at investments already made in their laboratories – “instruments, laptops, software, and not just LIMS software. They are looking at ERP software, document management software, ELNs, and depending on the industry, even MES (manufacturing execution systems) systems.”

Companies began integrating these previously isolated productivity tools and realized that lab results were critical for many business decisions and that fast access to results could drive decisions that in some cases were worth millions dollars.

“We found examples like an oil company would have a tanker halfway around the world before the lab data would come back saying whoops, the ship is going the wrong way because it’s not the right grade of crude. Or it’s sitting in dock for however long it took to get the data,” he says.

“In pharmaceuticals I am sure there are examples of large batches of product made either in API form or even in finished form before they realized it is not right for whatever reason and therefore had to throw it away. And as in any business the sooner you catch a wrong and the sooner you convey that message to the organization the less money you’re going to waste,” says Shah.

“At Thermo we kind of stumbled into this awakening rather than proactively led it, although now we are proactively leading it with initiative called CONNECTS,” Shah says. CONNECTS is a services offering in which Thermo plays the lead role in--and where necessary brings in--technology and industry-specific partners to help companies connect the critical laboratory systems to business decision systems.

Today, the LIMS market is flat to declining in the U.S. and Europe, but growing in China, India and Latin America. The net result though is still stagnancy. Availability of hosted versions could change this picture substantially, both among existing large customer who wish to externalize costs, but more impactfully among smaller labs that have steered clear of pricey, cumbersome commercial LIMS packages.

Looking at the new LIMS-on-Demand offering, Shah says it is very practical for a new user to get up and running in six months. Moreover, given a hosted LIMS option, he expects small labs will follow the same LIMS adoption curve big users did in the sense of starting small and evolving to make use of more sophisticated functionality.

“You don’t have to have an ERP integration for day one. You can be happy initially with doing sample log in, sample tracking, inventory tracking, those kinds of features of lab management on the first few months, not on day one, and then start to worry about instrument integration and so on. And by the way we’ll stand with you as you go through this,” he says.

He describes one key market segment as labs with “three to five scientists, one of whom will self-select and come to us. They will go to the web site and do the research and say they are going to drive this lab into the 21st century by adopting this technology. In terms of usage, I think they will clearly have not a large volume of samples necessarily but there will be a time criticality in what they are doing. So food testing, water testing, small contract labs or labs within an organization, pathology labs, etc.”

There was at least one big pharma among the beta users and Thermo has been publically citing the University of Miami as another. Interest definitely picked up after the PITTCON announcement according to Shah.

The on-demand solution won’t work for everyone, concedes Shah. Customization requirements are problematic. “We can configure but can’t customize,” he says. Thermo is certainly happy to work with those clients individually but not through the basic LIMS-on-Demand model.

Still, Shah points out that ThermoFisher overall is fond of saying its works with 350,000 labs, and it does, but the bulk of those labs are buying consumables. Thermo Informatics works with something closer to 15,000 labs. That leaves a huge upside for the LIMS-on-Demand product.

Not surprisingly, customer expansion and effective use of the “new distribution channel” are early goals. “I am conservatively saying that we hope to get 30-50 by this time next year and 100 by the next year -- by that I mean brand new to Thermo customers,” he says.  It will be interesting to see if hosted LIMS offerings do indeed repeat a saleforce.com like success.