Hosted Informatics: Bringing Cloud Computing Down to Earth with Bottom-line Benefits for Pharma

By Dr. Trevor Heritage, President of Symyx Technologies, Inc.

Hosted informatics brings high-value scientific information and applications to scientists’ desktops. A subscription-based, software-as-a-service (SaaS) model lets pharma organizations improve operational agility, collaborate more effectively with virtual teams and partners, focus on their core strengths, and lower costs.

“Vendors offering hosted solutions are not challenging pharma to do something they don’t want to do. Rather, we are partnering with pharma, providing a time-and cost-saving alternative approach to more efficient and cost-effective laboratory workflows and outsourcing”

The forecast for information-driven R&D in pharma is "cloudy" today-but this is a good thing.

An information-driven approach to R&D gives scientists the information management, decision support, and reporting applications they need to leverage the knowledge of colleagues and collaborate more effectively without being buried by information. These software tools help scientists answer the question, "How can we best turn experimental results into timely, actionable information that drives better decisions and more successful pipelines?"

R&D organizations have traditionally relied on a license-based software model in acquiring software applications, but today's economic and competitive pressures are opening the doors for many organizations to consider a subscription-based, software-as-a-service (SaaS) model in which scientific software and information are hosted offsite and accessed online. According to Claus Mortensen, IDC's principal for emerging technologies advisory services: "IT cloud services will form 25 percent of all incremental global IT spending growth by 2012."¹ Symyx believes that SaaS-based hosted informatics is likewise set for large growth in the pharma R&D sector.

Pharma's increasing tendency to outsource projects to globally dispersed, multi-disciplinary, virtual teams is accelerating the desire to move to hosted solutions in the IT cloud. R&D organizations require easily shareable software, on-demand information in the context of scientific workflows and effective collaboration tools that are easy to turn on and off as partnerships and outsourcing relationships change and evolve.

Hosted informatics meets these requirements by making scientific information and applications available to many customers, online, in a shared resources environment. The question is no longer if pharma R&D will invest, but when. Many of the original barriers to adoption have dissolved, and the benefits in enabling pharma to focus on operational agility (especially successful partnering), core competencies, and cost savings are becoming increasingly compelling.

Lowering costs

Traditional software can involve a considerable up-front outlay in cash and resources, as well as ongoing maintenance and support. Indeed, the global IT research firm Gartner estimates that owning and managing a traditional enterprise software application can cost up to four times more annually than the initial purchase. Furthermore, companies spend more than 75% of their IT budget just running and maintaining existing systems and software infrastructure.² IT departments are much better utilized when they can focus on strategic business initiatives.

Hosted informatics provides direct and quantifiable cost benefits over the traditional software model because its shared resources environment offers significant economies of scale. Updating software applications in a license-based, single-tenant model involves expensive and inefficient duplication of effort. The cloud paradigm shifts this responsibility to the hosted informatics vendor who manages a single infrastructure shared by hundreds of companies. Keeping software current is a much more cost-effective proposition when a hosted informatics vendor updates a single infrastructure-and hundreds of companies instantaneously access the latest functionality.

Of course, moving to a hosted informatics model solely to cut costs is not a sustainable strategy. As with all outsourcing, the primary strategic goal for adopting a hosted informatics model should be to improve operational agility and provide better focus on core competencies. If the move to hosted informatics is done with these larger aims in mind, cost reduction will follow.

Improving operational agility

R&D organizations today need to react quickly to changing business opportunities in a "just in time" manner. Hoarding resources as a hedge against future changes in demand is not a viable option. This delicate balancing act in the handling of resources has led to the proliferation of agile, global, virtual teams frequently involving external partners and contract research organizations (CROs). On-demand, hosted informatics with its light (or zero) infrastructure and rapid deployment makes it much easier for companies to move resources around, expanding or reducing capacity to meet changing business needs while still providing partners with the full informatics capabilities of the outsourcing organization.

Hosted informatics is especially helpful in the large biopharma sector that sees frequent merger and acquisition activity. It can take months to sort out the network deployments necessary to integrate globally dispersed teams into a newly merged organization. With hosted informatics, all organizations need is an Internet connection and a password to provide scientists with instant access to shared scientific information, tools, and workflows.

CRO engagement is an excellent example of how hosted informatics supports improved operational agility in pharma R&D. A CRO performing library design for a pharmaceutical company can register new compounds into a shared, hosted registry. They can document the workflow used to create the library in a shared, hosted electronic laboratory notebook (ELN). By hooking into a common informatics environment in the cloud, multi-disciplinary virtual teams can quickly and easily access the same information, use the same synthesis methodologies, and work together productively. Outsourcing organizations working with various third-party collaborators also gain the agility to turn partners on and off quickly and securely without disrupting ongoing operations.

Focusing on core competencies

As business author Geoffrey Moore has stated, successful companies assign their "A team" to core business activities that differentiate product offerings and win customers. They then outsource non-core or contextual activities to outside vendors specializing in those areas because "this is where [the outside vendors] are putting their A team. It's context to you but is core to them."³

For example, Symyx has over 25 years of experience providing life science researchers with advanced ELN, data acquisition, decision support, and content solutions backed by a proven, industry-leading chemistry engine. Developing, extending, and supporting scientific software and databases are core activities for Symyx. But these concerns are ancillary for our many customers who are primarily engaged in drug discovery or developing other chemical-based products in their core business areas.

Symyx's online DiscoveryGate® content platform, which has been in operation for over seven years, delivers hosted information on over 32 million molecules and 17 million reactions, along with other highly valued database content, to over 600 companies worldwide. Moving even deeper into the cloud, Symyx's new DiscoveryGate Web Service provides remotely-hosted, up-to-date, 24/7 access-via our customers own internal applications and services-to critical chemical sourcing, molecular property, synthetic methodology, bioactivity, and toxicology information from Symyx and participating content providers.

Small pharma and biotech companies that do not have the resources to support a large informatics infrastructure are perhaps best positioned to benefit from third-party content solutions such as DiscoveryGate, or from a remotely-hosted ELN, compound registration, logistics, or workflow orchestration service. Hosted services such as these can protect IP, optimize workflows, and stretch IT budgets further. Most importantly, hosted services enable companies to concentrate more resources on the core excellence that ultimately drives their strategic business success.

Hosted informatics: Evolutionary, not revolutionary

Hosted informatics is an evolutionary, not a revolutionary, shift in information management. In the past, pharma might not have entertained hosted solutions due to data security and intellectual property concerns. The chemical structures in a compound registry, the experimental information in a lab notebook, and the accumulated knowledge and insights of an employee brain trust were just too valuable to consign online.

Today however, outsourcing the management of proprietary and confidential information is commonplace. The public's daily experience with secure online banking and the success of a growing number of SaaS-based enterprises like Amazon, Google Docs, TurboTax, and Salesforce.com, to name just a few, are prompting pharma to investigate-and increasingly invest in-cloud solutions.⁴

Pharma's concerns about data and operations security in the cloud are largely alleviated by today's mature, scalable, and redundant multitier architectures, and shared resources environments. Highly specialized and secure third-party data centers offer the ability to isolate customer data, perform regular data backups, and minimize failures via redundancy. Detailed Service Level Agreements spell out SaaS providers' responsibilities for end-to-end delivery of efficient and reliable hosted services. Finally, today's industry-standard disaster recovery and business continuity plans are backed by comprehensive SAS 70 auditing standards and specifications for the guidance of SaaS providers and the protection of SaaS customers.

With the nuts and bolts of secure cloud computing now well understood and accepted, pharma has been successfully integrating hosted solutions into its clinical, sales, and marketing activities. In fact, vendors like Symyx that offer hosted solutions are not challenging pharma to do something they don't want to do. Rather, we are partnering with pharma, providing a time- and cost-saving alternative approach to more efficient and cost-effective laboratory workflows and outsourcing. The benefits in reducing costs, improving workflows, and focusing on core excellence now far outweigh the risks.

The future of the electronic lab

Symyx's successful hosting of scientific content on the DiscoveryGate and DiscoveryGate Web Service platforms has increased our customers' interest in deploying a hosted ELN environment with supporting cloud-based chemical registration, chemical inventory management, workflow orchestration, and R&D data management capabilities.

According to Michael Elliott, CEO of Atrium Research & Consulting, ELNs have now evolved from first-generation systems for basic data capture in the late 1990s through second- and third-generation systems offering improved chemistry functionality and increasingly generic capabilities that extend the reach of the ELN to other disciplines including biology.⁵

Elliott states that today's fourth-generation ELNs are all about convergence. Labs today are demanding a single, flexible, enterprise ELN solution that combines generic, multi-disciplinary functionality with mix-and-match, domain-specific modules for handling structured and unstructured information. Elliott suggests that this is moving the fourth-generation ELN into territory traditionally inhabited by laboratory information management systems and scientific data management systems.

Looking to the future, Symyx believes that the fifth-generation ELN will move the enterprise notebook into the cloud, helping companies of all sizes benefit from an ELN and enabling multi-disciplinary, virtual project teams to share information more easily using a common notebook.

The enterprise ELN in an independently managed, subscription-based, hosted informatics environment will enhance operational agility by improving support for distributed project teams. It will also enable pharma R&D organizations to focus on core competencies while reducing overall costs and providing earlier payback periods for pharma's critical investments in information-driven R&D.

Traditional software deployments require high upfront and continuing capital expenses involving software licensing and ongoing renewals, hardware purchases, network infrastructure enhancements, monitoring/testing tools, security products, maintenance, IT costs, training, etc.

Agile, hosted deployments require minimal initial cost and then variable (but predictable) ongoing costs, enabling R&D organizations to expand and reduce capacity as needed to meet changing business needs. These variable costs are aligned with known business values (especially improved project agility, enablement, collaboration, faster start-ups, lower cost per user, etc.).

References:

1. Vivian Yeo, Analysts: 2009 the year of the cloud, ZDNet Asia, December 12, 2008
2. Timothy Chou, The End of Software, SAMS Publishing, 2005, pages 6-7
3. Geoffrey A. Moore, Living on the Fault Line, Revised Edition, HarperCollins, 2002, page 31
4. See "The New Computing Pioneers" by Rick Mullin in Chemical & Engineering News, May 25, 2009 (Volume 87, Number 21). This article cites Pfizer, Eli Lilly & Co., Johnson & Johnson and Genentech as a few of the companies that are putting cloud computing to the test today.
5. Michael H. Elliott, "What You Should Know Before Selecting an ELN," ScientificComputing.com, Spring 2009