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The Coming Convergence


2001 was the year that the IT sector sat up and took serious notice of the life sciences sector. 2002 could be the year that the two morph into one.

“The ‘convergence between biology and IT’ has become the mantra for information technologies companies eager to gain a share of what may be the last remaining growth market in high-tech,” BioInform editor Bernadette Toner points out in one of her last issues of 2001. Indeed, IBM has declared that market opportunity for IT in life sciences will exceed $30 billion by 2004, and International Data Corp. recently doubled its prediction for 2005 revenues in the life sciences IT market from $11 billion to $24 billion (although it’s not clear whether the number was revised before or after its parent company, IDG, decided to host a BIO-IT Convergence trade show).

If you’re a regular reader of BioInform, you saw news throughout the year indicating that IT’s pursuit of the life sciences sector was heating up:

• April 6 — IBM said it considered itself in direct competition with Oracle for market share in data management solutions for life science research.

• May 7 — Steve Chin, Microsoft’s industry manager for life sciences, said, “We are very, very serious about the pharmaceutical industry.”

• July 23 — Red Hat CTO Michael Tiemann said his company had identified the life sciences as a key market for its future business.

• October 8 — Matija Siljak, a principal with IT consulting firm Olotek, said the firm planned to add bioinformatics clients to its base of financial and electrical engineering customers: “Things are pushing forward in bioinformatics whereas in a lot of other markets it’s contracted lately.”

• October 8 — Storage vendor EMC, while preparing to lay off some 2,400 people by year-end, views the life sciences as a safe haven in the slowing economy. Roberta Katz, marketing magager of EMC’s life sciences group, told BioInform, “We see this market growing dramatically.”

Also in October, in a report entitled “IT, biotech and consolidation?” Goldman Sachs speculated that the special computing and analytical power needs of pharma companies “could lead to strategic collaborations or consolidation activity with IT and computing companies.” The report concluded: “Consolidation activity (either biotech or pharma acquiring IT/computing companies, or IT/computing companies acquiring biotechs) may be the smoothest way forward.”

Quoted in a recent series of articles that the Reuters business and financial news service published on life sciences and IT, industry consultant George Poste predicted that a number of new industrial alliances will be created through the union of biology and computing. Asked what inspired the news series, a Reuters editor told GT, “The suspicion that there is a coming consolidation between IT and pharma firms.”

What would such a consolidated company look like? Sun Microsystems’ global head for life science and consumer product industries, Dirk Heyman, offers one guess. The “most fearsome competitor of the future,” he told an audience in Princeton last month, would be called something like ProcterRocheSunMicro — a megamultinational conglomerate with branding and “intense consumer communications skills, IT skills, and R&D and medical know-how.”

Even Oracle’s Larry Ellison, whose public relations folks last year considered a GT interview request to be out of his scope, has caught the fever. At the official unveiling of Oracle’s new life sciences division in December, Ellison announced, “Life sciences is special.” But you already knew that.


Adrienne J. Burke, Editor in Chief


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