Ann: 30 June 2016 Annual Report to Shareholders-ALC.AX, page-2

Lucky got in 2day.

Commercialising  the  Platform Alcidion  is  an  early  stage  Company  with  plans to  achieve rapid  revenue growth  by  leveraging the  past years  of  technical  effort and investment  in the  Miya  Platform  and  the maturation  of  several  major  (paid) beta site deployments that are  transitioning into production  reference sites.

This  progress  is  exemplified  by  our  Melbourne based customer,  Western  Health  Network where the  organisation has  transitioned  from  a paid beta  deployment  site  to  a  commercial installation  based  on  a  three-year  agreement with an option to  extend  in years  four  and  five.

There will  continue to  be a  R&D  effort  to  keep the  Platform  current and  to  complete  toolset capabilities  such  as  configuration  tools  and editing tools  for  customer  usage.
But  in general  terms  the  Company effort  will  swing way from  heavy R&D  investment into  a  heavy sales and  marketing,  and  business development,  effort.

The rapid  growth  will come  from  several sources:

•  Organic business growth driven through our commercialization  strategy,  initially targeting Australia  New  Zealand  for  short term  sales and North  American  market entry in  the  medium  term.

•  Growth through M&A,  targeting  businesses in the  health space  with a  complementary customer base  and a  technology/product line  that  would  offer  significant  Alcidion product  upselling.

•  Expanding the method of platform delivery beyond the  historical  internal  deployment model to  a  cloud based option.

Commercialisation  will be  further  accelerated through a  focussed  sales  and  marketing  effort to  systematically engage  with  the  continuum  of hospital  providers  (private  and public),  health authorities,  key  healthcare  consulting companies and  strategic  partnerships  with major  Health  IT  players.

Product  Opportunity Leveraging the  Cloud  &  Deep Learning The maturing  of  cloud  computing  technologies offers  significant commercial  advantage  to Alcidion  in  the  sales,  commissioning  and ongoing  support  of  its existing  products,  as they  are retuned  for  delivery  via  cloud  rather than  bespoke  internal  deployments  at individual customer  sites.   The cloud  also creates  opportunity  for  Alcidion to  deliver  new,  low  cost,  products,  for  example, smaller  functional sub  sets  of  larger  existing Alcidion  products  but  also  opportunities  to select  new  product  modules  for  cloud delivery only,  as  standalone  products/services, supported from  the  cloud at  attractive  prices.

Cloud  delivery  offers  significantly  lower  upfront costs for  customers,  potentially faster/cheaper  commissioning  costs  and lower  Alcidion  maintenance  and  support  costs. There are costs  associated  with  the complete porting  of  the  Alcidion  product  range  to  cloud computing and  careful consideration  will be given,  on  a  product  by  product  basis,  to  ensure the business  moves to  extract  the commercial advantages of  cloud computing.

Alcidion  developed a  data  acquisition  and processing  product  via  the  cloud to  the National  Echocardiogram  Database  of Australia  ( NEDA), the  NEDA  study  will  be  the largest  study  of  heart function  in  the  world.  

In  addition  to  cloud based  services  Alcidion  is evaluating the  use  of  machine  learning,  and  in particular  deep  learning  technology.  Deep learning  has  the  potential  to  improve  the detection  of  patient  flow  problems  and patient risks  so  mitigation  strategies  can  be  activated earlier.  

Traditional  statistical models  have difficulty  in  coping  with  the  complex  nature  of health care  data,  but  new  methods  such as deep learning  can  handle  this  complexity  if trained with enough data.