India's healthcare providers to spend $1.2 billion on IT in 2016, says Gartner

Jun 21, 2016

Healthcare providers in India are expected to spend $1.2 billion on IT products and services in 2016, an increase of 3.4 percent over 2015, according to Gartner, Inc., the world’s leading IT research company. The forecast includes various spendings by healthcare providers (including hospitals, hospital systems, nursing and residential care and university hospitals) on internal services, software, IT services, data center systems, devices and telecom services.

“IT services, which includes consulting, software support, implementation, hardware, IT outsourcing (ITO) and business process outsourcing (BPO), will continue to be the largest overall spending category within the healthcare providers sector,” said Moutusi Sau, principal research analyst at Gartner. “It is expected to reach $339 million in 2016, growing 5.2 percent over 2015. The BPO sub-segment will record the fastest growth rate of 15.4 percent over 2015. ITO will be the largest sub-segment in IT services recording a 7.5 percent increase in 2016 to reach $107 million in 2016,” added Sau.

The Gartner report also says that the software market will grow 6 percent in 2016 to reach $106 million, up from $100 million in 2015 with infrastructure expected to grow 4.5 percent in 2016 to reach $43 million. The estimates are a reflection of the fact that healthcare providers have been increasingly turning to the IT industry for meeting various needs such as billing, remote monitoring of patients, and allied medical services.

The forecast is in line with previous estimates by Gartner about the expansion of IT sector in India. According to one of previous estimates by the research firm, the Indian State will spend $7 billion on IT products and services in 2016, an increase of 3.1 percent over 2015. The prediction is also in sync with other estimates and findings about the general health and expansion of the IT sector in India. According to a recent study by the Boston Consulting Group, a global management consulting firm, the population of Internet users in India will touch half a billion (580 million) by 2018, up from 260 million in 2015. The report further said that Internet contribution to the GDP is set to grow at 23% compared to 13 per cent overall.

The upsurge has been helped by considerable expansion of Internet services in India. Dedicated initiatives by the Government such as Digital India and National Fiber Optic Network (NFON) have been put in place to spread Internet and broadband services to every nook and cranny of the country.

“Dedicated programs such as Digital India and National Fiber Optic Network have allowed for increased government spending on IT and related fields. Providing basic services online and improving the infrastructure for improved broadband connectivity will provide high trajectory growth to the Indian healthcare sector. With substantial expansion in the reach of the Internet, especially to small towns and rural areas, the Gartner estimate is close to our own estimate,” said Somesh Misra, co-founder and Vice-President, Operations, Deskera, an Indian IT software company.

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