Health Care, Finance Sectors Lead IT Spending Growth

 
 
By Nathan Eddy  |  Posted 2014-07-29 Email Print this article Print
 
 
 
 
 
 
 
IT spending and health care IT

Hospitals also appear to be hiring IT staff at a rate faster than most other sectors, with headcount rising 3.9 percent at the median.

Financial service organizations are hiking IT operational budgets by 5 percent at the median and capital budgets are up 2.5 percent, while another sector showing above-average growth in IT operational spending is health care, with budgets rising 3.6 percent at the median, according to a report from Consumer Electronics.

Banks, insurers and other financial service firms reported the strongest growth in both operational and capital budgets, the study revealed.

In other sectors, IT operational budgets are growing slower than the median. Spending is up 2 percent in the high-tech sector, 2 percent for professional and technical services, and 1 percent for public and nonprofit organizations, according to the report.

The retail and wholesale distribution sector and process manufacturing also reported a 5 percent rise in IT operational spending at the median.

John Longwell, vice president of research at Computer Economics, said that to the degree the economy remains sluggish, IT operational spending will remain muted.

"The lack of growth on the IT capital budgets is a little more surprising. Companies could be delaying infrastructure upgrades in the interest of cost containment," Longwell said. "They could be choosing to deploy an increasing number of systems in the cloud instead of with on-premises infrastructure, or they could be pausing to digest previous investments. I think it is a little bit of all three."

The research firm is also forecasting a muted 2.5 percent growth in IT operational budgets across all sectors and no growth in capital spending.

"We don't think the use of cloud systems and resources is significant enough yet to have a significant impact on the ratio of operational to capital spending, but IT organizations may be delaying investment in new data center and network infrastructure as they assess their options," Longwell explained. "In any case, they are investing business applications, but not infrastructure."

Longwell noted with health care reform, hospitals and doctors are under to pressure to become more cost-efficient and that remains a top priority for health care providers.

Hospitals also appear to be hiring IT staff at a rate faster than most other sectors, with headcount rising 3.9 percent at the median.That compares with 5 percent headcount growth in financial services and one percent median headcount growth across all sectors.

"Security once again seems to be a rising priority in the health care sector, more so than in other sectors," he said. "There continues to be investment in electronic medical records, security, and mobility."

He said they are already seeing less investment in PCs and PC technology, and desktop virtualization could have a dramatic influence on shifting expense from end-user devices and support to data center infrastructure.

 
 
 
 
 
 
 
 
 
 
 
 
 

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