Dec 2018 - Market Presentation - Doc # AP44451818
1H18 Country Report on IT Services — Philippines
By: Rolando Chua
This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in the Philippines from January to June 2018 (1H18). It covers the market size movements and growth trends in each of the macro markets (i.e., project-oriented services, managed services, and support services) as well as 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 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.
Despite the Philippine economy slowing down, IT services spending continues to be driven by the government, which is rolling out its landmark ICT initiatives and programs on digital transformation. This will drive the demand for IT infrastructure and applications upgrades as well as the integration of new infrastructure and applications with legacy systems. In addition, the anticipation of a third telco player in the country has also helped set a positive tone for the IT services market outlook as it will be a catalyst for much needed improvements in internet connectivity and overall telco services reach, which will help support digital transformative efforts of local enterprises.
During 1H18, new services offerings by global services vendor, such as IBM and Cisco, were launched with the aim of supporting small and medium-sized businesses, especially in key provinces, such as Cebu, Davao, Central Luzon, and the Calabarzon region. In addition, data protection compliance and infrastructure security planning permeate both business and IT objectives, driving security services spending. Public sector initiatives drove the growth of the project-oriented market, whereas the private sector's digital transformation initiatives continue to boost demand for IT consulting and outsourcing services.
Banking, financial services, and insurance (BFSI), retail, utilities, and telco players continued to lead the charge in transformative technology adoption, with successful ICT initiatives that provide other sectors, such as the public sector, much needed use cases and proof of concept to develop their own digital transformation initiatives. Meanwhile, vendors continue to target early adopting verticals through the launches of new platforms and solution suites, customized to fit into different business sizes and industries. IDC believes that this trend will continue for the next few years as the adoption rate for small and medium-sized businesses accelerates.
Although local enterprises are assessing the ROI impact from their IT spending in the areas of mobility, automation, cybersecurity, analytics, and cloud, exploratory discussions on enhancing organizational productivity through the utilization of robotic process automation (RPA), artificial intelligence (AI), internet of things (IoT), and blockchain technology are also expected to be initiated by enterprises in the coming months, which will be a long-term catalyst of IT services spending.
Deloitte LLP, ePLDT, Inc., Oracle Corporation, Globe Telecom, Inc., Hewlett Packard Enterprise, Hitachi, Ltd., Indra Sistemas, S.A., NEC Corporation, IPC Systems, Inc., DXC Technology Co., NCR Corporation, IBM, Cisco Systems, Inc.
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