AsiaPac IT study reveals interesting notes on RP

By MELVIN G. CALIMAG - Manila Bulletin

A new report by XMG, a research firm based in Victoria, Canada but is focused on the Asia Pacific region, has revealed its top ten predictions for 2007 with the Philippines getting a large dose of citations.


XMG, founded by Filipino Lauro Vives, said in its report that the following trends will likely to dominate the ICT market in the region:

-- the top concern of Asia Pacific CIOs will be to minimize risks in ICT investments

-- the Asia Pacific ICT market will breach 0 billion and will continue to experience double digit growth

-- China, India, Korea, Australia and Pakistan are the countries with the propensity to spend on ICT in 2007

-- offshoring in Asia Pacific countries will slow down due to manpower constraints

-- hiring to step up for IT, call center, and BPO

-- demand for more service provider transparency in telecommunication agreements will rise

-- video-conferencing to become a major driver for adoption of 3G

-- Business Intelligence will give way to Business Process Management to drive Enterprise Intelligence

-- Linux on the desktop will take traction among SME Asia Pacific users

-- Service-Oriented Architecture (SOA) will still predominate

The research firm said the Asia Pacific market will experience an estimated 11 percent digit growth rate driven by both foreign and domestic consumption of ICT services in the region. Japan will continue to have the bulk share of the Asia Pacific market, with China and India in distant second and third, respectively.

In terms of ICT spending, XMG said that countries such as the Philippines and Indonesia, although attractive on the surface due to the global outsourcing industry, will see relatively flat growth rates as compared to its other Asia Pacific counterparts (e.g. Vietnam, Malaysia) due to lack of government support and incentives in growing the local ICT economy, scarcity of qualified and skilled resources, lack of established local venture capital funding, and the lack of IT maturity among several large organizations.

The global market for outsourced ICT services is also projected to slow down slightly in 2007, the report said, with volume estimated to reach between 5 and 2 billion by end 2007.

"The slowdown in growth is mainly due to manpower supply constraints in offshore locations such as the Philippines and India, which account for a significant portion of offshore demand for outsourced ICT services."

While economic indicators in Asia Pacific point to a solid job market for IT, call center and BPO services, organizations will have to compete with service providers in the war for the recruitment and retention of talent, it added.

"This is more so evident in the Philippines where further workforce development and deployment has been highlighted as an operational risk due to limited resource pool.

"Adoption of ‘best practices’ will no longer be sufficient as employers target the same talent pool through 2010. The adoption of ‘best methods’ suited to employer characteristics and market conditions will separate the winners from the losers."

Another important development that is also expected to happen this year is the proliferation of OpenOffice software among Asia Pacific countries such as the Philippines, Indonesia, and Thailand "where software piracy is high and the cost of Microsoft Office products have been considered cost prohibitive."

"Although Openoffice.org does not compare to Microsoft Office’s ‘industrialstrength’ stature in the marketplace, Openoffice.org will fill in the gaps in the enterprise marketplace not covered by the big four (IBM, Microsoft, SAP and Oracle), particularly in the SME (Small and Medium-scale Enterprises) market segment," it said.