May 2018 - Market Presentation - Doc # AP43839018
2H17 Country Report on IT Services — Philippines
By: Alon Anthony Rejano
This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in the Philippines from July to December 2017 (2H17). It covers the market size movements and growth trends in each of the macromarkets (i.e., project-oriented, outsourcing, and support and training services) as well as the key industries, such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of large global and local IT services providers in the market.
The data and insights within this presentation are a part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.
In 2H17, most enterprises in the Philippines have set their priorities on improving business operations and productivity and enhancing current basic IT infrastructure and services. Despite awareness of the benefits of technology adoption, constraints in IT cost and resources and the lack of long-term planning by local enterprises pose a tangible hindrance to their digital transformation initiatives.
Starting with the inception of the Department of Information and Communications Technology, the government, which had long been reliant on private sector support when it comes digitalization, has finally begun to show serious commitment in supporting the country's transformation into a digital economy. A number of landmark projects that have been launched in 2H17 will accelerate the country's digital development. These projects include the digitalPH initiative (a dedicated countryside digital development program), the landing party agreement with Facebook for the Luzon Bypass Infrastructure (the first government-owned high-speed Internet infrastructure), and the GovCloud initiative (the government's public service cloud infrastructure).
Local organizations are heavily investing in digital technologies to enhance their capabilities across operations and customer experience. However, mere capability or expertise is no longer sufficient to remain competitive in today's volatile and disruptive market. IDC believes that IT consulting will be tapped by organizations to provide an agile approach to respond to the fast-evolving technology advances and complexities, competitive disruptions, and increasing customer expectations. Furthermore, firms in industries such as manufacturing and professional services are willing to invest in technologies that will increase staff and operational efficiency, while those in the BFSI sector may explore leveraging technology solutions to increase customer reach and enhance basic customer experience.
Philippine organizations are increasingly preferring providers to manage their cloud environments, be it for cloud-centric needs or across cloud and noncloud/legacy technology environments. The shift essentially involves the intersection of self-service cloud capabilities with managed services. Moreover, there is an increasing preference for telecommunications providers and traditional service providers for managed cloud services among local enterprises. This is because these vendors have their own datacenter facilities in the country. IDC believes that preference and dependence on these local providers will continue to grow, as these vendors have also been expanding their cloud services capabilities.
Deloitte, NCR Corporation, ePLDT, Inc., IBM, Oracle Corporation, Cisco Systems, Inc., Hewlett Packard Enterprise, Dell Inc., Indra Sistemas, S.A., Pointwest Technologies Corporation, IPC Systems, Inc., DXC Technology Co.
Application development services, Application management, Hosted application management, Hosting infrastructure services, IT consulting services, IT education and training, IT maintenance and support, Network and desktop outsourcing services, Systems integration services