AsianScientist (Jan. 13, 2014) – Ovum, an independent analyst and consultancy firm, has predicted global IT spending to increase at a cumulative annual growth rate (CAGR) of 3.6 percent to reach US$40.8 billion by 2017.
According to the the company, highest growth will be in the Asia-Pacific region, in the small to mid-sized enterprise subsector, and in the business intelligence (BI) and analytics solution area.
Ovum has revealed that the increase in IT spending will be fueled in large part by the growth in data analysis and related technologies, the acquisition of systems to comply with new regulatory requirements, and increased spending on applications that advance operating efficiency and automation. Asia-Pacific will continue to be a fast-growing region for IT spending, driven by the transfer of drug discovery, development, and manufacturing to China and India.
“The factors driving IT spending in the life sciences industry continue to be complex, with payers of healthcare demanding greater value in the face of increasing costs, technological advances enabling new types of research that are changing societal expectations, and opportunities arising from the emerging markets,” said Andrew Brosnan, senior analyst of healthcare and life sciences at Ovum.
“We expect much of this predicted growth to come from investment in business intelligence and analytics, as institutions look to collect, clean, manage, and analyze the vast amount of data from sources such as social media, electronic medical records, and genetic sequencing.”
Although overall IT spending will be higher as total revenue increases, Ovum expects total IT spending as a percentage of total revenues to decrease to 3.4 percent in 2017, largely due to IT-related cost efficiencies and the increased use of generics, which are less IT-intensive to develop than novel medications.
“The improvement of IT-related cost efficiencies will be achieved through systems simplification and infrastructure consolidation, further cloud adoption, falling component prices, and increased external sourcing,” said Brosnan. “The centralization of externalized services reduces the total cost of ownership by stripping out duplicative investment and realizing greater economies of scale.”
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Source: Ovum.
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