This is module 4.1.1 focused on the medical device industry. Let's define the market space. So, when thinking about the medical industry today, it's a pretty big industry basically, in the United States $290 billion 2014 growth rate is pretty substantial six to eight percent. The major players in this arena Johnson and Johnson, GE Healthcare, Siemens Healthcare, Phillips, Baxter, Becton-Dickinson and many others. And while there is increasing competition there is also lots of innovation, and but of course always remains regulatory issues as well. If we look at, the range of what's going on, in terms of different areas. We have, anything ranging from OBGYN, radiology, dental, ear, nose, and throat, to looking anesthesiology, gastro, plastic surgery, so basically it's, really a pretty diverse range across the whole team. So in this space what is intriguing about the market is, we talked a lot about this getting in terms of getting reimbursed, is that a lot of folks now are actually taking essentially they're outsourcing what they do for some of their service provisions as well as product design, and ultimately coming up with a whole new way of looking at outsourcing the medical device industry. So by service outsourcing, that's our first point, this is essentially looking for areas of reduced cost, innovation, and faster production, and reduced rollout time. The idea is that you are trying to find out handling your technologies, and as they're being deployed cheaper way sometimes in contraries than what's been done prior to them. Well get the product outsourcing, this is generally the older outsourcing concept, and it is relatively short. The thought here is that you are actually reaching out to folks to do contract manufacturing, and potentially to rebuild resell some of your technology, to kind of deploy these pieces. But it does show that this industry is getting pretty robust in the sense that you are reaching out to firms outside of say, the normal [INAUDIBLE] regime that companies do [INAUDIBLE] and moving on to a different space. So we think about what this world could look like in terms of service [INAUDIBLE] industry. The services market itself could do everything from product design and development. They could do regulatory consulting. They could do maintenance. They could do upgrades. They could do testing and certification and implement. On the application side of the market they can develop devices across all different regimes, class one, class two and the super-advanced class three. So it's a pretty amazing thing that you can sort of take out to market. So when we look to time to market and revenues, when you have higher revenues that are due to pass [INAUDIBLE] market, that can really make the component case to kind of invest in technology and get things out quicker. A shorter rollout time is going to rationalize working capital cycle and obviously improve ROI. Basically to get your revenues where you want them to be you want to really be at your time to market here. This could be two years just to get your product out the door. If you're actually operating here, which could be more like five years. You could really be losing too much time in this space. So when we think about going out to make some of these applications, it's interesting to see where things fall. I'm not going to go into the class one, because for a lot of folks it's pretty basic. You don't really need to do that a tremendous amount is actually going to class three, which is the most advanced of micro prototyping. It's actually see that move in that space, just develop the pipeline but again, if you're quicker to pipeline for that most expensive technology, because these are going to come with a much higher price point than these. Having people help you get there is going to be much better. If we look at the services split, for product design and development, that's pretty much denominates what's there. If you look for regulatory consulting, that's 22%. Maintenance, 16%, implementation only 9% and upgrade [INAUDIBLE] and testing 13 and 11% respectively. So, where is some of this outsourcing actually occurring? Most of it actually is domestic transfers in the United States market or to Canada, but after that, a lot of it can be done in Europe. Increasingly, there's parts that are being done in the Asian Pacific area, and then there's outside of that space as well. Major players to get inside these are technologies you may not hear them all the time, but these are the firms that are really getting good at sort of doing these service innovations. When you go to any medical device conference, nationally or actually they have a great one between cities. That's always in April, designed for medical devices conferences. You'll see these folks represented there quite actively. So as the market evolves what you'll find is that there are increasing strategic alignments since, and partnerships between medical devise manufacturers and outsourcing providers. For example for GE, which is really dominant in the medical diagnostic business, coming in [INAUDIBLE] move things along [INAUDIBLE] level. It's and there's a price to basically get different manufacturing capabilities, scale up to a much more aggressive level. And also software and regulatory components partnering is a major component also, as well. So this concludes module 4.1.1, assessing the market space for medical devices.
