Illumina Takes Page From Apple Playbook, in Blending Hardware and Software for the Genome

10/20/11Follow @xconomy

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to get cheap and accessible enough so that it’s no longer the exclusive domain of the small number of bioinformatics experts at hard-core sequencing centers around the world. There are ease-of-use issues, language barriers, security, and getting data in formats so that it’s easily shared from lab to lab. Some researchers are also still a bit paranoid about letting go of their data to the cloud, rather than keeping it at a server where they can see it on campus.

Illumina CEO Jay Flatley has expressed his skepticism about getting into the computing side of genomics, which he described as “road kill” in an Xconomy interview back in April 2010. But bioinformatics (an older term for genomic computing that has the small-time taint of “cottage industry”) has started to take on increasing importance among the top sequencing labs, which can churn out data much faster than insights can be extracted. Goldman Sachs analyst Isaac Ro said in a recent report that sequencing labs are looking to boost their spending on bioinformatics from 2 percent of their budget, to 10 percent in the short term, and potentially 50 percent over a period of years.

Illumina, a company which missed its third quarter sales forecast by about $40 million with its legacy business, clearly has its sights on a new revenue stream based partly on computing and software offerings. Just this week, it led an $8 million investment in Victoria, BC-based GenoLogics, a genomics software vendor. Dickinson says there will be more to come.

“It’s very important to deal with a customer challenge, and it’s well-recognized that bioinformatics is a major customer challenge,” Dickinson says. “It’s a space where only a very credible vendor can bring this to the table. If you move to the cloud, with all that data going up, and a company was to fail, you could lose your data. Think of how it builds customer confidence. The combination of Illumina scale, the resources we can put into security are very high. Somebody has to do this, and the logical company to do that is Illumina.”

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