ICT Sector - PhilippinesNovember 2012

Mainstream

IT Sector

Growth Areas

Future Trends

Summary

MainstreamIT Sector

Growth Areas

Future Trends

To know and get: A big picture perspective; current trends and current industry practices

Objectives

Take Aways

Games / Design /

Animation

ITES/ ITO-BPO

Big picture perspective of PH - ICT

Mobile

Telecom/ISP/ NetworkingDigital

Cloud-SaaS

EnterpriseResourcePlanningSystems

Technology Entrepreneur-

ship

Unclassified / Uncategorized

Other Industry

developments

e-Commerce / e-Learning / e-Governance

ITES/ITO-BPO

• Report from consulting firm Everest Group includes the Philippines as one of the five “mature locations” for software services in the world. We are currently ranked with China, Brazil, India, and Poland as mature locations for having more than 50 software services operators.

• Sector growth in 2011 are as follows: 37% growth in revenues (US$1B) & 11% increase in workforce with 50,000 IT PROs hired.

• Industry’s clients are 60% from American companies, and the rest from Europe, Japan and Asia Pacific.

• IT-BPO industry in the country is also gaining ground as revenues for 2011 reached an all-time high of US$11 billion, 24 percent higher than the previous year with US$8.9 billion.

• Employee count has reached 638,319 during the period, up 8% from 525,000 in 2010. The voice sector has the most people hired at 416,000 followed by the knowledge process-outsourcing sector with 128,650 people.

Mainstream

IT SectorThis covers IT Enabled Services (tech support), Software Development, IT Outsourcing

and BPO voice & non-voice services

Telecom/ISP/Networking

• Globe was first to introduce 4G technology in the Philippines in 2009, with the deployment of its Worldwide Interoperability for Microwave Access (WiMax) network.

• PLDT acquired majority interest in Digitel last October 2011 – Digitel delisted from PSE in March 2012

• 2011 - Globe was first to launch 4G Evolved High-Speed Packet Access (HSPA+) network. This year, 4G gets even better with LTE.

• 2012 – PLDT upgraded their fixed line network an expansion of its Global Access International Network (GAIN) that runs on 12 international cable systems and supported by four landing stations; also, SMART has completed linking its Metro Manila cell sites via fiber optic cable as part of its Fiber in the Loop (FITL)

• 2012 - Globe rolled out fiber-optic cables, implementing its Long Term Evolution (LTE) technology [to serve high-speed data transmission to mobile phones and other data terminals --it is an infrastructure replacement, a brand new network, not an upgrade]

Mainstream

IT Sector

Other Industry Developments

• Computer Sales: US$1.8bn in 2011 to US$1.9bn in 2012, +5% in US dollar terms; given Philippines’ low PC penetration, many provincial markets are untapped territories.

• US-PH council formed for biz and IT delivery: The Philippine Trade & Investment Center in Silicon Valley (NOV.2012)- creation of the US-Philippines Business Support & IT Delivery Council — a consortium composed of Filipino IT firms Exist Global, Ionics, Orange & Bronze, Terranex LLC, Rendition Digital, Ayannah, and Innerworks.

• ASEAN ICT ministers to gather in Cebu for top-level regional meeting: Top ICT ministers & senior officials from Asean will attend the 13th Asean Telecommunications and IT Senior Officials Meeting & 12th Asean Telecommunications and IT Ministers Meeting with dialogs from China, India, Japan, Korea, the EU & International Telecommunications Union on Asean ICT Masterplan & policy directions

technology analyst firm Gartner predicted by 2014, IT hiring in major Western markets will come predominantly from Asian-

headquartered companies.

New OS release from Microsoft: Windows 8

Latest UI for Android OS

Mainstream

IT Sector

Mobile

• Due to Pinoy’s orientation towards social networking in the mobile space, PH is regarded as a promising market for Smartphones. In 2011, 60% growth in smart phone sales was expected w/ shipments of around 2.9M units.

• November 2012 - Philippines became the first in the world to experience a new service being tested out by search giant Google, which allows free browsing of emails, Internet searches and social network sharing via mobile phones called Google Free Zone

Growth Areas

Philippines is still the “SMS/Texting Capital of the World”

More than to

5M Mobile Internet Users

More than

78M Filipinos are on mobile

More than a Billion

SMS sent per day

Estimated

40%of handsets are

2.5G/3G enabled

-- 94% mobile Penetration-- 88,119,840 mobile subscribers--24% of Pinoys access internet via mobile

Digital

• In 2011, Philippines was given the title of the “Social Networking Capital of the World” with a Social network penetration in the Philippines is at 95%

• With a general breakdown of online activities --Facebook: 93.9%; Twitter: 16.1%; LinkedIn: 1.9%; Internet Use: 29.7%

• The popularity of photo sharing has increased by 46% due to facebook and instagram

Filipinos are enthusiastic

digital consumers

28M Filipinos are estimated to

be connected. That’s close to

1 out of 3 people.

93%Part of a

social network – 16.2M active in Facebook

600,000 Ave.

active Blogs

1# in Video Consumptio

n

At least a Million Blog Readers

Growth Areas

Digital

“Other aspects of digital are shown in Tech Entrepreneurship and as well as unclassified/ uncategorized categories.”

Growth Areas

e – commerce / governance/ learning

e/m/Social – Commerce start-ups are locating and slowly sprouting in the Philippines (formal and informal)

• Philippine E-commerce Act (PECA) was passed on 14th June 2000 • Digital Filipino Club continues to attract more eCommerce local

players• Cebu Pacific continues to lead w/ it’s online ticketing/sales• ZALORA leads online shopping-eCommerce boom• Group Buying sites still continues but dwindling in growth• August 2012 - Multiply social network, shifted it’s position to e-

commerce specific for Philippines and Indonesia (Due to online merchants who are majority users of the platform)

• More local banks in the Philippines offer e-banking but the notable 1st is Union Bank of the Philippines (1st bank website, online banking services, e-savings account “EON Cyber Account.”)

Growth Areas

e – commerce / governance/ learning

• The Philippine Official Gazette is the official journal and publication of the Philippine government inacted on September 10, 1902 and under Pnoy, the Online version was launched last July 2010; this also includes other online engagements such as twitter or the like.

• A history in Technology for the Philippines, in 2010 the 1st automated Philippine Elections was successfully held with the use of the Precinct Count Optical Scan (PCOS) voting machine.

• Mid-2012, Project NOAH was launched (Nationwide Operational Assessment of Hazards) by DOST. This will harness technologies and management services for disaster risk reduction through enabling existing interventions available to the public such as: Data on Hazard Maps/areas, water level monitoring, or the like solutions against storms, earthquake, landslides..etc..

Growth Areas

e – commerce / governance/ learning

Formal and informal e – learning courses are gaining an acceptance in the mainstream educational institutions as well as the industry.

• Corporate Training - The first to adopt online corporate training methods were the multinationals. Ex. PLDT, MERALCO, Aboitiz Group through CBTs (Computer Based Trainings).

• E-Learning, an emerging market – in the earlier days TESDA and CHED took on the task of identifying key skills needed by the industry.

• NGO-Corporate-Academe Partnerships - program with a combined online course access, hands-on activities, & consultations via webinar such as Certified Blog & Social Media Entrepreneur (thru DigitalFilipino.com) & Certified Digital Marketer Program [thru Internet & Mobile Marketing Association of the Philppines (IMMAP)] both under AdMU- Ateneo Java Wireless Competency Center & eLearning Edge

• CBE thru CefTEx (Coalition for better Education – Center for Teacher Excellence) offers Masters of Arts in Instructional Design and Technology (MA IDT - ICT integration Courses) in collaboration w/ CNU, Microsoft, Advocates for Living Values Education, Australian Council for Educational Leadership, International Society for Technology in Education and Pugetsoundcenter, Washington USA.

Growth Areas

Technology Entrepreneurship

• Filipinos are the top and most active freelancers on oDesk and Freelancer dot com; two of the top freelancer web sites online.

• In Multiply.com, Pinoys cover 5M in users with about 50,000 registered as “official” local merchants/sellers

• Making money through the digital technology platforms has gained momentum through blogs, forums, social media and other related platforms (group buying, Sulit, amazon, eBay, Alibaba, bidding sites..etc.)

• Driving factors for online-freelancing are the ff. info. from Cisco Connected World Report 2010; Microsoft 2010 US Remote Working Research: Higher ($) pay; 60% of employees believe they don’t need to be in the office to be productive & efficient; 66% desire work flexibility; 62% believe they could fulfill their job duties at a remote location; 59% say their company does not have a formal policy allowing employees to work remotely

This sector’s revenue and specific numbers are not documented due to it not being considered as mainstream

Growth Areas

Technology Entrepreneurship

Local Tech Start-ups slowly but surely develops and Start-Up support from NGOs, Government, Foundations and Private sector are starting to grow in number; to

mention a few, please see below:

Private Sector

NGOs/Foundations

Incubators/Funding Institutions

Local Start Up Enterprises

Growth Areas

+ Games/Design/Animation

Game development is a US$90 billion worldwide industry, of which the Philippines has a mere 0.02% market share, but things are looking pretty good at the moment.

Several schools currently teach four-year courses in game development, including the University of the Philippines, Far Eastern University and the College of Saint Benilde, which was the first school to offer the full course in the country. It will graduate its first batch of students with a degree in Information Technology with a specialization in Game Design and Development in December 2012.

Local gaming is ever active and development is rising. Some examples are Zombie Fields – a mobile game app for iOS and Android and a Call-to-Action Environmental online-facebook game from AboitizPower called ALTERSPACE

Growth Areas

+ Games/Design/AnimationFreelance graphic artists are being hired in the global market through the web but local PR firms, or the like initiatives are not only just getting more creative, but also are adapting to technology updates and trends

> Infographics are being recognized as a new visually stimulating but is not that easy to make presentation of data/information.v Creative campaigns like the DOT’s “It’s More fun in the Philippines” showcases the role of technology in pushing the campaign, & awareness causing it to become VIRAL

Growth Areas

ERP Systems

ERP systems automate this activity with an integrated software application. The purpose of ERP is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Some Examples used in the Philippines are shown below:--Quickbooks (from Intuit): primarily an accounting software, which expanded to other processes--Microsoft Dynamics (from Microsoft) Microsoft purchased the Great Plains Software for $1.1 billion.--Oracle eBusiness Suite (from Oracle) - Oracle PH, founded in 1990, is a 100% subsidiary of Oracle Corp. w/c sells products & services either directly or indirectly through bona fide business partners--SAP (Systems, Applications, & Programs - SAP) –started in germany in 1972 and 1995 in the Philippines with a portfolio of 500 clients (Top PH Corps. & SMEs)

Enterprise resource planning (ERP) systems integrate internal and external management information across an entire organization, embracing finance / accounting, manufacturing, sales and service, customer relationship management, etc.

Growth Areas

Cloud-SaaS

• Benefits of cloud computing—accessing data and applications stored on remote hardware by way of the Internet instead of keeping it all in your local workstation—still requires a leap of logic for many. But now that a workstation can go anywhere as a smartphone, a stripped-down netbook, or even an e-book reader, it's practically a virtual desktop operating in conjunction with a virtual server anyway. If the user can be anywhere, so can the source for data and applications.

• Software as a service (SaaS) -sometimes referred to as "on-demand software", is a software delivery model in which software and associated data are centrally hosted on the cloud. SaaS is typically accessed by users using a thin client via a web browser.

• Cloud Computing can refer to software, infrastructure, hosting and many other IT requirements that involves a remote server. SaaS refers specifically to hosted software applications (Ex. MS Office-Word vs. Google Docs.)

Cloud computing is the use of computing resources (hardware and software) that are delivered as a service over a network (typically the Internet).

Growth Areas

In 2011 – NetSuite Philippines delivers first Cloud ERP Suite for the Philippine Market.

LotusLive offers a variety of software as a service (SaaS) solutions for your business ranging from e-mail and Web conferencing, to an integrated suite of collaboration.

Unclassified/Uncategorized

Future Trends

Rise of Technology Events & communities (Formal/Informal)

Unclassified/Uncategorized

Information Security Awareness (Public and Private)

• Software piracy remains rampant in the Philippines, despite the government's efforts. 7 out of 10 software is unlicensed, according to the 2011 Business Software Alliance (BSA) Global Software Piracy Study.

• Commercial value of unlicensed software also rose by 20% to $338 million in 2011, from about $278 million in 2010.

• BSA is a staunch supporter of the Philippine government's efforts to combat software piracy. The Pilipinas Anti-Piracy Team is composed of the National Bureau of Investigation (NBI), Optical Media Board, the Philippine National Police and the Intellectual Property Office.

• October 2012 – Philippine Cybercrime Prevention act was passed and implemented w/c caused mixed reactions from Filipinos

Future Trends

Areas of Engagement

TakeawaysAreas to consider in the IT Sector to position yourself in.

IT-Based Services: Global OutlookLarge Markets, and Growing opportunities

IT services typically include IT applications and engineering services, while ITES involve a wide range of services delivered over electronic networks.

These are two broad segments, however, and the sophistication of the services in each varies considerably.

Skills needed to Succeed

Areas you can seek to develop and/or improve on

Together with the existence of competitive telecommunication markets, especially for broadband services, the availability of employee skills is the single most important factor in growth of the IT Services and ITES Sector.

• Suitability for employment; that is, meeting a quality standard for work in the industry and having the necessary language skills. Educational content is often poorly aligned with industry needs.

• Willingness to work in the industry• Accessibility; that is, proximity of potential staff to a proposed IT/ITES site or a willingness

to relocate.• Trainability — those who could potentially become employable following short-term

training courses.

Takeaways

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