Short term transfer of capabilities…
Portfolio integration will also be no mean feat – both vendors have essentially the same core products for radiology IT. Philips has several options here, from killing off the Carestream Vue product line and pushing customers toward its own Intellisite portfolio, to running a dual product strategy based on customer needs. It is our expectation that Philips will approach this process cautiously, with a differing strategy based on regional and market context. In the short-term, we expect that a dual product strategy would be the best move, with the Intellisite portfolio remaining focused on top-tier academics, large regional networks and IDNs, while the Vue platform focused on its existing customer segments in mid-tier providers and smaller, along with emerging markets.

Given that many imaging IT contracts today are five years and lengthening, it would also be prudent for Philips to offer customers a timeline for integration and expected changes to the portfolio in the short term, ensuring that the update pipeline for the Carestream Vue platform is maintained at least for the next two years. This more gradual approach will also provide time for Philips to decide on the level of integration between the two platforms. At a minimum, integration of the best parts of each product portfolio will be most important; Philips Intellisite taking on more of the archiving and data management capability of the Carestream Vue product would be one such short-term move popular with Philips customers, while integrating the Philips radiology work list into the Vue product line would also be a benefit to Carestream’s existing customers. Given the market is also increasingly focused on operational and workflow tools, roll-out of the Philips-agnostic PerformanceBridge toolset to Carestream Vue customers would also be a smart move in the short-term, offering new “value-add” without needing to significantly change the base Vue platform. Implementing these changes in the first two years of the new entity would go a long way to allaying the "rip and replace" fears of current Carestream customers, while also ensuring current Philips customers reap the benefits of the acquisition.
…For long term retention and upsell
Longer-term, more questions remain as to how the Carestream HCIS business will fit with Philips’ overall healthcare strategy. Philips has been one of the earliest to adopt a strategy that targets the complete provision of clinical and diagnostic hardware, software and services in large, long-term managed service deals. This was highlighted by the recent announcement that the Philips imaging IT business line was to move into the modality hardware business unit. Moreover, it has set aggressive targets for transition of a large proportion of its business to operational subscription models.

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