Skip to main content
Premium Trial:

Request an Annual Quote

Citing Consolidation, Pharma s Spending Lull, IDC Reins in Bullish Bio-IT Market Forecast

Premium

Market research firm IDC has revisited its spreadsheets and is putting together a revised forecast for the bio-IT market, according to Debra Goldfarb, group vice president of worldwide systems and life sciences research.

Due to “a number of fundamentals,” including increased consolidation activity in the informatics sector and a spending slowdown among pharmaceutical companies, the firm is downgrading its numbers for a new forecast it plans to release in November, Goldfarb told BioInform.

IDC’s most recent market estimate, in March, predicted a compound annual growth rate of 24 percent over the next four years, bringing the total global market for life sciences IT to $38 billion by 2006. The new research views the market through a slightly more conservative filter — the $38 billion market is still within reach, Goldfarb said, it’s just going to take an extra year to get there.

“I still feel bullish on the bio-IT space,” she said. “We can’t go back, but it’s just like any early-stage market: There’s periods of rapid acceleration followed by periods of rapid contraction.”

Despite the fact that pharma’s spending has slowed to nearly a trickle in recent months, spending in the academic sector — about one-third of the overall market — has remained stable, Goldfarb said.

Another bright spot is the Asia-Pacific market, where IDC expects to see a compound annual growth rate of 55 percent and a regional market size of $3.39 billion by 2006.

On the down side, however, a number of issues came into play. Moore’s law is not working in the sector’s favor, for one thing. The storage market, which the firm has tagged as the largest single bio-IT segment, is seeing high sales volume, but decreasing revenues as the price of disk continues to drop, Goldfarb said.

Citing the well-known market difficulties of bioinformatics data businesses over the past year, Goldfarb noted that integration players are headed for trouble as well. The integration market is “immature and overcrowded,” Goldfarb said, and she expects to see “a lot of casualties in the next year.”

Niche players aren’t the only ones who will suffer the effects of the industry’s growing pains, however. According to Goldfarb, the large infrastructure players — IBM, Sun, HP, and the like — are “still trying to figure out where they fit in the value chain.” These firms will have to firm up their partnership and alliance strategies over the next year if they want to stay competitive, she said.

And despite the growing presence of big IT in the life sciences, Goldfarb noted that there will always be a role for specialty tool companies in the sector: “We’d be irresponsible to say all the sector’s problems will be solved by the infrastructure players,” she said.

The complete details of IDC’s latest research will be released in November.

— BT

Filed under

The Scan

Not as High as Hoped

The Associated Press says initial results from a trial of CureVac's SARS-CoV-2 vaccine suggests low effectiveness in preventing COVID-19.

Finding Freshwater DNA

A new research project plans to use eDNA sampling to analyze freshwater rivers across the world, the Guardian reports.

Rise in Payments

Kaiser Health News investigates the rise of payments made by medical device companies to surgeons that could be in violation of anti-kickback laws.

Nature Papers Present Ginkgo Biloba Genome Assembly, Collection of Polygenic Indexes, More

In Nature this week: a nearly complete Ginkgo biloba genome assembly, polygenic indexes for dozens of phenotypes, and more.