Bio-IT Market Will Reach $38B in 2006

Spending on IT products and services by companies in the life-sciences
market will grow at a CAGR (compound annual growth rate) of 24 percent
from US$18 billion in 2001 to $38 billion in 2006, according to figures
from market analyst IDC. But this bio-IT market has a number of
characteristics that vendors need to be aware of, according to Mark
Hall, director of life sciences research at IDC.

"IT has never been asked to participate in an endeavor which is
literally about life and death," he said here Friday at the Directions
2002 conference. "We are seeing the convergence of two colossal
industries -- bio-science and IT science in a synergistic relationship.
A new market has emerged for the IT industry."

The market includes pharmaceutical, health care, research, and
biotechnology companies, as well as government-linked institutions. One
key differentiator is the relatively complex information that the life-
sciences business deals with, according to Hall.

"It is an extremely information-rich industry and the storage needs are
huge," he said. Hall quoted the case of a four-year-old life sciences
startup that has already installed 26T bytes of storage, with the
storage requirement doubling every nine months. Enormous processing
power is required to manage that storage, with the startup having
already built a 1,800-processor Linux cluster and a 500-processor Sun
Solaris cluster. Another company, with less than 50 employees, is
generating 18T bytes of raw data per month as it tries to discover new
drugs, Hall said.

Storage for life sciences companies will be a $10 billion market by
2006, and the largest single market sector, according to IDC
projections. "Life sciences companies are high spenders -- around one-
third of their overall spending goes on IT," Hall said. "Pharmaceutical
companies are trying to radically change the process of finding new
drugs and bringing them to market in a shorter time."

Several big vendors have done well in the bio-IT market already,
including IBM Corp., Compaq Computer Corp., Sun Microsystems Inc., Dell
Computer Corp., Silicon Graphics Inc., Hewlett-Packard Co., EMC Corp.
and Oracle Corp.

But they are being chased by about 300 smaller IT vendors with inside
knowledge of the bio-IT market, according to Hall.

"This market is changing very quickly and its complexity is going up,"
he said. "Scientists are not like the usual IT buyers and the bio-IT
community is quite close-knit. You can't just throw technology over the
wall, but have to offer products that align with the scientists'
problem set."

Read more about opinion in ITworld's Opinion section

» posted by ITworld staff

ITworld

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

• Email
• Print
• Share
  • Slashdot
  • Digg
  • Stumble
  • Reddit
  • Newsvine