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Analyst Corner
India is Fastest Growing Healthcare IT Market
Springboard Research has announced the results of its latest research on IT and Technology in the Healthcare industry in Asia (excluding Japan).
Springboard’s data shows that the total market for IT in the Healthcare industry in Asia was USD 2.95 billion in 2006 and it is expected to grow at a compound annual growth rate (CAGR) of 13.1 per cent to reach USD4.83 billion in 2010. China was by far the largest market in the region, comprising 46 per cent of all Healthcare IT spending, followed by Australia with a 25 per cent share.
India was the fastest growing Healthcare IT market with an expected growth rate of 22 per cent, closely followed by China, with Vietnam in third place with growth of about 13 per cent. Surprisingly, Australia, probably the most developed market in the region and the second largest, was also the fourth fastest growing market.
When examining Healthcare IT spending as a percentage of total IT spending, Australia was the highest in the region, followed by China, Malaysia, New Zealand, the Philippines, and Vietnam. Interestingly, many of the more developed Asian markets like Hong Kong, Taiwan, Singapore, and Korea had a much lower percentage of Healthcare IT spending than the emerging markets but still manage to provide high quality healthcare services to their populace.
“While most industries in Asia are very fragmented as far as development, maturity, and growth, we see this even more accentuated in the Healthcare industry,” said Jonathan Silber, Research Manager for Springboard Research. “While you can see a definite split in trends and spending patterns by developed and developing countries, even within these groups there is further fragmentation that increases the challenge for IT vendors. For example, you have a mature country like Australia that is a larger market, yet growing faster than many of the emerging markets due to trends unique to Australia. We are seeing more unique drivers across countries, so local strategies are even more important in Asia” added Silber.
In the more developed markets, Springboard is seeing the shift from clinical to patient focused care driving technology needs as healthcare providers continue to invest to improve efficiencies and the sharing of information across healthcare providers. Other drivers include increased regulations, privacy restrictions in some countries, a replacement of legacy infrastructure, as well an ageing population in many of the developed countries.
Emerging markets in Asia continue to invest in infrastructure for their Healthcare sector, with a broader push for community care and increased care in the rural areas of most countries. Huge sums of money are being spent in India and China in this regard and, as mentioned above, many of the emerging markets in Asia are spending more on Healthcare as a percentage of total IT spending than the more developed countries.
The leading vendors in the Healthcare industry in Asia tend to fall into two categories- the first category being the larger multinational IT vendors like Microsoft, IBM, HP, Oracle, SAP, Accenture, EDS, and Intel. The second category is comprised of vendors focused on providing Healthcare solutions, which increasingly are leveraging technology as part of these solutions- these vendors include companies like Cardinal Health, McKesson, Emdeon, and GE Healthcare.
Local ISVs and SIs are also quite prominent in the competitive landscape as they both compete and partner with the multinational firms. Springboard sees quite a vibrant landscape emerging as local firms embrace the Healthcare opportunity and leverage their knowledge of the local market and existing relationships.
Springboard’s data shows that the total market for IT in the Healthcare industry in Asia was USD 2.95 billion in 2006 and it is expected to grow at a compound annual growth rate (CAGR) of 13.1 per cent to reach USD4.83 billion in 2010. China was by far the largest market in the region, comprising 46 per cent of all Healthcare IT spending, followed by Australia with a 25 per cent share.
India was the fastest growing Healthcare IT market with an expected growth rate of 22 per cent, closely followed by China, with Vietnam in third place with growth of about 13 per cent. Surprisingly, Australia, probably the most developed market in the region and the second largest, was also the fourth fastest growing market.
When examining Healthcare IT spending as a percentage of total IT spending, Australia was the highest in the region, followed by China, Malaysia, New Zealand, the Philippines, and Vietnam. Interestingly, many of the more developed Asian markets like Hong Kong, Taiwan, Singapore, and Korea had a much lower percentage of Healthcare IT spending than the emerging markets but still manage to provide high quality healthcare services to their populace.
“While most industries in Asia are very fragmented as far as development, maturity, and growth, we see this even more accentuated in the Healthcare industry,” said Jonathan Silber, Research Manager for Springboard Research. “While you can see a definite split in trends and spending patterns by developed and developing countries, even within these groups there is further fragmentation that increases the challenge for IT vendors. For example, you have a mature country like Australia that is a larger market, yet growing faster than many of the emerging markets due to trends unique to Australia. We are seeing more unique drivers across countries, so local strategies are even more important in Asia” added Silber.
In the more developed markets, Springboard is seeing the shift from clinical to patient focused care driving technology needs as healthcare providers continue to invest to improve efficiencies and the sharing of information across healthcare providers. Other drivers include increased regulations, privacy restrictions in some countries, a replacement of legacy infrastructure, as well an ageing population in many of the developed countries.
Emerging markets in Asia continue to invest in infrastructure for their Healthcare sector, with a broader push for community care and increased care in the rural areas of most countries. Huge sums of money are being spent in India and China in this regard and, as mentioned above, many of the emerging markets in Asia are spending more on Healthcare as a percentage of total IT spending than the more developed countries.
The leading vendors in the Healthcare industry in Asia tend to fall into two categories- the first category being the larger multinational IT vendors like Microsoft, IBM, HP, Oracle, SAP, Accenture, EDS, and Intel. The second category is comprised of vendors focused on providing Healthcare solutions, which increasingly are leveraging technology as part of these solutions- these vendors include companies like Cardinal Health, McKesson, Emdeon, and GE Healthcare.
Local ISVs and SIs are also quite prominent in the competitive landscape as they both compete and partner with the multinational firms. Springboard sees quite a vibrant landscape emerging as local firms embrace the Healthcare opportunity and leverage their knowledge of the local market and existing relationships.
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