Forecast: Health care, intel spending to lure contractors

Health care and intelligence are two of the most promising growth opportunities for federal government information technology services over the next five years, according to a new report.

The "Federal IT Market Forecast 2007-2012" from market research firm Input Inc. of Reston, Va., estimates that health IT-related spending by the federal government will increase at a compound annual growth rate of 10.7 percent from $5.3 billion in 2007 to $8.7 billion by 2012.

As for intelligence-related IT spending, Input predicts it will increase at a compound annual growth rate of 8.4 percent from $11.1 billion in 2007 to $16.6 billion by 2012.

John Slye, Input's manager of federal industry analysis, sees broad bipartisan support for leveraging technology to drive cost savings and improvements in the delivery of health care. "Frankly, our forecast would be much higher if obstacles of privacy and standards development weren't stifling growth in public health and electronic medical records," he said.

The research firm cites the ongoing demand for intelligence professionals and the intelligence communities' expanding role in the so-called War on Terror as driving substantial investment in IT in the intelligence arena.

"Companies are incredibly eager to break into doing business with the intelligence community. It is historically one of the hardest organizations to crack, but with the slower market overall, companies are pushing hard to get a foothold in this area," he said.