Global IT Spending to Reach $3.5 Trillion in 2017, Healthcare Rises with IT

Before we go back, let’s look ahead. Starting with Gartner, a research agency known and paid well for doing exactly that, its latest worldwide IT spending report issued in October 2016 says that the amount will reach $3.5 trillion in 2017. Specifically, these financial numbers are being driven by growth in software and IT services revenue, up 2.9 percent from 2016 estimated spending of $3.4 trillion, according to the latest forecast by Gartner, Inc.

The bright spot for the IT industry has been the software and IT services segments. Software spending is projected to grow 6 percent in 2016, and it will grow another 7.2 percent in 2017 to total $357 billion. IT services spending is on pace to grow 3.9 percent in 2016 to reach $900 billion, and increase 4.8 percent in 2017 to reach $943 billion.

Table 1. Worldwide IT Spending Forecast (Billions of U.S. Dollars)

 

2016 Spending

2016 Growth (%)

2017 Spending

2017 Growth (%)

Data Center Systems

173

1.3

177

2.0

Software

333

6.0

357

7.2

Devices

597

-7.5

600

0.4

IT Services

900

3.9

943

4.8

Communications Services

1,384

-1.1

1,410

1.9

Overall IT

3,387

-0.3

3,486

2.9

Source: Gartner (October 2016)

Looking back, earlier this year Gartner said worldwide IT spending will top $3.5 trillion in 2016, but of course, according the latest Gartner report, this year did not pan out as expected. The market continues to grow after a sluggish year or information technology spending in 2015.

In its Jan. 18 report, Gartner researchers analyzed technology trends across the hardware, software, IT services and telecom markets, and concluded that that it will take to 2019 to reach the IT spending levels the world saw in 2014.

For healthcare IT spending, according to a report earlier this year, healthcare providers report that they are seeing a rise in spending as they shift from carrying out organization-wide electronic health record initiatives to supplementing EHR systems with analytics and care management functionality, according to a new IDC Health Insights report.

Forty percent of healthcare IT professionals responding to IDC’s 2015-2016 Healthcare Provider Technology Spend Survey released earlier this year, but just 25 percent of those surveyed attributed IT spending growth to spending on technology for EHR.

From a similar report published in late 2015, healthcare providers spend $40 billion annually on IT programs while clinical healthcare IT spending reached $15.6 billion in 2014. This number increased by $1.5 billion compared to 2013. Federal healthcare IT spending is predicted to exceed $4.8 billion in 2019. Likewise, electronic health records currently make up 61.5 percent of clinical healthcare IT expenditures. Telemedicine is the second-highest healthcare IT investment spend with 23 percent of the market; picture archiving and communications systems are third-highest at 7.8 percent.

Another prediction, by Technavio, says that the healthcare big data market will grow 42 percent overall by 2019, a 10.5 percent CAGR.

The continued investment isn’t really surprising news, but looking forward, could be a very good thing for healthcare.

Scott Rupp's picture

Scott Rupp

Contributor

Scott E. Rupp is a writer and an award-winning journalist focused on healthcare technology. He has worked as a public relations executive for a major electronic health record/practice management vendor, and he currently manages his own agency, millerrupp. In addition to writing for a variety of publications, Scott also offers his insights on healthcare technology and its leaders on his site, Electronic Health Reporter.

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