In the growing market for scientific software, Accelrys sees many firms that compete with it on individual software products, but few that can go toe-to-toe with it across multiple areas of its business, Accelrys CEO Max Carnecchia tells FierceBiotech IT. Yet over the past year or so Accelrys has found itself facing a big new competitor in the scientific software game, PerkinElmer, which has rapidly made itself a contender on multiple fronts of the market.
Indeed, the new Accelrys-PerkinElmer rivalry is an intriguing one. About two years ago, PerkinElmer ($PKI), a major lab instruments and services provider, partnered with Accelrys ($ACCL) to give customers using its cellular screening technology better data transfer capabilities. But over the past year, PerkinElmer has moved aggressively into the software business itself, buying up four scientific software firms this year with more potential deals in the offing.
"They're a competitor now," Carnecchia says. "We're flattered. They certainly see the market opportunity that we've been talking about for 18 months. And it looks like they've decided they like our messaging, so they are going to use it. In that regard, we're flattered, but it does turn them into a competitor and somebody that we're going to keep an eye on very closely."
Take the fast-growing market for electronic laboratory notebook, or ELN, software, which aims to replace some of the paper notebooks that scientists use to record data, like experiment results. San Diego-based Accelrys gained a nice piece of the ELN market through its acquisition of Symyx last year. But PerkinElmer took what could be viewed as a fast lead in the ELN arena with its recent buyout of CambridgeSoft, which has the biggest share of electronic laboratory notebook market, according to Atrium Research's Michael Elliott.
The global market for ELN software and services is estimated to be about $185 million this year, according to Dallas-based Atrium. That's not a huge market. But the group is predicting 20 percent annual growth in the ELN arena, as more research outfits from Big Pharma to small academic labs and others start to evolve their methods of managing the large amounts of data they accumulate in studies. The bottom line is that this market could grow to more than $1 billion.
Game on. Following its buyout of CambridgeSoft, Waltham, MA-based PerkinElmer revealed last month that it would acquire a smaller ELN provider, Labtronics, in Ontario, Canada. The next week, Accelrys announced its purchase of electronic lab notebook provider Contur of Stockholm, Sweden. Each deal enables the buyers to address different aspects of the ELN market while growing their market shares. (The third major player in the ELN market is IDBS.) Still, where does this race stand now?
"(PerkinElmer's CambridgeSoft) does have the most widely used (ELN) system out there. And then the addition of the Labtronics capabilities gives them instrument-interfacing capabilities which CambridgeSoft didn't really have," says Elliott, who follows the market as CEO of Dallas-based Atrium (he's also a former vice president at PerkinElmer).
Still, PerkinElmer's size advantage and deeper pockets with which to buy market share over Accelrys don't necessarily equate to success in the software business. "I think the issue about having scale and being of a certain size in this marketplace as an instrument manufacturer doesn't necessarily lead to being successful in software," Elliott says.
So what gives Accelrys an edge over PerkinElmer? "At the end of the day, PerkinElmer wants to sell instruments. And the software business is a means to that end, and I think customers know that," Carnecchia says. On the other hand, he says, Accelrys is exclusively focused on the software business. (FierceBiotech IT has requested an interview with PerkinElmer CEO Rob Friel to discuss the firm's software strategy, but the company's head honcho hasn't been available to talk.)
What Carnecchia says makes sense. However, it'd be a mistake to think that PerkinElmer is relying solely on lab instrument veterans for its software business. In gobbling up ArtusLabs, CambridgeSoft, Geospiza and Labtronics, PerkinElmer is also taking in a lot of people with deep expertise in bioinformatics and relationships with customers who use and buy such technology.
Sure, it's going to take PerkinElmer some time to integrate all these businesses, and it's unlikely to shake the stigma attached to being a hardware player getting into the software game any time soon, but those factors don't take it out of the contest.