Manila, Philippines, 23 January 2015 — The ICT industry in the Philippines is projected to be in a continued upswing in 2015. With the country’s gross domestic product (GDP) predicted to grow at 6.3% in 2015, the ICT industry will continue to ride the growth momentum recorded over the recent years. The economic outlook for the Philippines is underpinned by a robust growth in domestic demand, a strong infrastructure spending, and the implementation of structural economic reforms.
Jubert Alberto, country lead, IDC Philippines says, “Based on IDC’s Annual Continuum Survey, a huge majority of Philippine companies are looking to increase ICT budget and spending in 2015. This indicates a healthy sign for the country in the bigger scheme of things. ICT spending is expected to be heavily impacted by the 3rd Platform and the usage of its technologies is being driven by the needs of companies seeking for new and effective ways of engagement. The adoption of disruptive technologies in the 3rd Platform, such as cloud, mobility, social business and Big Data and analytics are bringing about innovations in business models and consumption patterns.”
“There may be inhibiting factors such as natural disasters and port congestion, but the effects of these will be limited in the short-term period only. IDC believes the country’s optimistic economic outlook, growing ICT demand from the consumer and small and medium-sized enterprise (SME) sectors, and the increasing requirement for the 3rd Platform technologies will shore up the Philippine ICT industry in 2015,” adds Alberto.
The following are the top 10 predictions that IDC believes will have the biggest commercial impact on the Philippine ICT industry in 2015:
- Philippine IT spending will keep its momentum and will be a bright spot in the ASEAN.
“The ‘changing of the guards’ in the political front has deeply transformed IT spending habits that will drive a stronger demand for mobility, devices, services, and applications across the country. The increasing ICT demand from SMEs and continued strong performance of the business process outsourcing (BPO) industry will also push ICT spending in 2015,” says Alberto. The sustained IT spending growth of 10.1% will push the country to be a bright spot in the Association of Southeast Asian Nations.
- The evolving role of telcos will drive telco spending.
The telecom services market in the Philippines will show positive performance in 2015, growing by 4.7%. One of the key drivers is the growth in smartphone ownership, buoyed by declining prices and the continuing growth of local players. From the operator side, the upgrading and modernization of telco network and coverage have become the key focus areas. “Moreover, the telco space in the Philippines is bolstered by the evolving role of telcos from being a pure connectivity provider to becoming a total ICT provider. The ‘one to majority’ marketplace allows for telcos in the Philippines to be the services provider that can service various marketplaces,” says Alberto.
- The strength of local players will continue to shape the smartphone market.
IDC’s 2015 projection for the Philippine smartphone market remains bullish as local vendors continue to drive smartphone volume growth by further tapping into the large market of budget-conscious Filipino consumers. Jerome Dominguez, analyst and devices research lead, IDC Philippines says, “The smartphone market already has several players at the moment and the competition grows tougher quarter after quarter. There is now a greater need to differentiate one’s branding and offerings from the pack in order to gain a competitive edge.”
- The 3rd Platform technology mash-ups will take partnerships and ecosystems to the next level with innovation as a necessity.
The mash-ups of cloud, social business, Big Data and analytics, and mobile that we hinted at last year will continue to come together in the Philippines in 2015. The difference between those organizations that proceed with adoption and those that do not will become more pronounced, as the adopters will simply be more capable to engage with customers in a more personal way — to deliver products and services faster, to accelerate product-process-and-service innovation, and to allow greater business resiliency. “Philippine organizations will also start to increase innovation with newer technologies, starting with 3D printing, and minimum level of Internet of Things into their business processes, and supporting these with improved interfaces and security,” adds Alberto.
- Omni-channel will transform technology buying behavior.
IDC projects that in 2015, the integration between offline and online channels as well as analytics deployment to channel systems, or what is called omni-channel, will drastically change the evolving technology buying behavior of consumers in the country. Digital transformation brought about by the explosion of consumer technology options has influenced the industry. Alon Anthony Rejano, analyst, IDC Philippines states, “IDC predicts that a single channel or the traditional multichannel strategies will no longer satisfy the tech-buying behavior of consumers since more people are now increasingly using their smartphones to visit online stores and buy goods via the Internet. They are slowly switching to omni-channel as it is becoming a norm in the Philippines.”
- Personalized businesses will thrive on disruptive platforms.
In 2015, IDC believes that cloud-based and business-driven innovation will continue to flourish in the country. Cecilia Santos, analyst, IDC Philippines says, “Creating a unique personalized experience for customers will be the standard moving forward, with more personal services and businesses emerging that will continually be patronized by Filipinos.” This will be the playing field for more nimble organizations typically born of the 3rd Platform era. Progressive large enterprises that are able to manage innovation will form the necessary base for the business-to-business-to-consumer (B2B2C) model allowing for further proliferation of personalized experiences.
- Internet of Things (IoT) will excite Filipinos, but adoption will be limited.
In 2015, IDC believes that although the falling prices of IoT solutions may spark further interest among Filipino brands to build consumer wearables alongside the China original equipment manufacturers (OEMs), adoption will be limited. While the market opportunity will drive activity, making this into a successful, long-term business model comes with a lot of hurdles. “In order to create a full IoT ecosystem with a brand’s customized solutions, there is a need to expand partnerships beyond the device and sensor markets to include connectivity, platforms, applications, analytics, and security. Few Filipino retail brands will have expertise in these areas, hence the slow adoption,” says Rejano.
- Global cloud vendors will drive confidence in the local cloud ecosystem frameworks.
In 2015, there will be more global vendors offering new cloud-based solutions and building a whole new portfolio around these. The key dynamics within the market will include expanded adoption, consolidated competition, new disruptors, developer migration, solution expansion, and new technology battlefronts. Global vendors will continue to nail down the local cloud ecosystem frameworks and this will drive confidence among Philippine companies in the areas of sales force automation, service, recruiting, marketing, social talent management, and financial services.
“The entry of global cloud providers may stir fiercer competition for local vendors, but this could only mean that they must improve and intensify their cloud-based solutions, create and design new applications, as well as provide new portfolios that capture market opportunities and fit the company requirements,” says Rejano.
- The “new normal” in Philippine climate will put disaster recovery and security in the forefront.
Extreme weather conditions, brought about by global climate change, are becoming the “new normal” in the Philippines. With these new normal in weather patterns, IDC believes that enterprises and SMEs in the country will be driven to prioritize business continuity and disaster recovery and security solutions more than ever. “While most of companies in the Philippines have already put in place a system for these, there is an even bigger need to fortify the ICT infrastructure due to the threat of weather disturbances,” says Santos.
- The BPOs’ diversification will keep on defining the local landscape.
Today’s continuously changing business environment demands greater agility and the ability to quickly develop new strategies as circumstances evolve. The BPO market is undergoing considerable change and a great diversification, with clients now expecting BPO companies to offer new services such as automation and Big Data and analytics along with traditional services (e.g., contact center support). “As enterprises experience the benefits of these transformative services, BPOs are starting to raise the bar to achieve differentiation by investing in automation, industry-specific talents, and a truly global infrastructure by reducing dependency on offshore infrastructure,” adds Rejano.
About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.