Story image

‘Radical’ cloud services transforming Philippines IT outsourcing market

28 Jun 18

The IT outsourcing market in the Philippines is in the midst of a fundamental shift caused by cloud services that are key to the growth of outsourcing, hosting, and managed services.

According to the International Data Corporation (IDC), total outsourcing services revenues in the Philippines surpassed US$300 million in 2017, increasing just 8.2 percent from the year before.

The local IT outsourcing market underwent a 3.5 percent decline from 2016 which IDC has put down to the ‘radical change and cannibalisation’ of cloud-based models of outsourcing involving infrastructure as a service (IaaS) and software as a service (SaaS), an evolving cost structure, and significant shifts in the competitor environment.

It is a tumultuous time for the market, as IDC believes the IT outsourcing market is adapting to the implementation of cloud services with players applying different strategies that range from cloud-centric to hybrid IT to push to the top of this market.

According to IDC, cloud is imposing a change in the market profile largely because of its colossal scalability, low cost, and increased agility. Cloud managed services are getting more pronounced than traditional managed services because of such factors like reduced CAPEX and accelerated time to market.

“Currently, the traditional outsourcing service providers have been pressured because of the increased shift to cloud providers. More traditional services providers are expected to include new delivery structures to accommodate end users that require services such as cloud, automation, and security solutions,” says IDC Philippines services senior market analyst Alon Anthony Rejano.

“Although this shift is seen as a positive sign for the overall IT outsourcing market, we believe that it will also impact traditional outsourcers negatively. From a market perspective, cloud continues to grow in the country but the overall market value remains muted due to the lack of scale for ICT deployment and availability of advanced skills in application migration in the Philippines.”

Rejano says managed services like managed network, servers, security, and connected services, are all gaining traction in the area and local enterprises will soon come to the realisation that the lack of maturity in service management will have negative consequences that include a more complex and expensive IT operational environment.

Therefore, his advice for local businesses is to leverage on cloud technologies to achieve their business objectives.

The new world of edge data centre management
Schneider Electric’s Kim Povlsen debates whether the data centre as we know it today will soon cease to exist.
Can it be trusted? Huawei’s founder speaks out
Ren Zhengfei spoke candidly in a recent media roundtable about security, 5G, his daughter’s detainment, the USA, and the West’s perception of Huawei.
SUSE partners with Intel and SAP to accelerate IT transformation
SUSE announced support for Intel Optane DC persistent memory with SAP HANA.
Inspur uses L11 rack level integration to deploy 10,000 nodes in 8 hours
Inspur recently delivered a shipment of rack scale servers of more than 10,000 nodes to the Baidu Beijing Shunyi data center within 8 hours.
How HCI helps enterprises stay on top of data regulations
Increasing data protection requirements will supposedly drive the demand for Hyper-Converged Infrastructure solutions across the globe.
Vodafone and PNSol champion new ‘invisble network’ broadband project
"As an industry, we've increased the speed of broadband to one gigabit and beyond, which is a remarkable achievement, but we now have to look beyond speed."
Top 3 cloud computing predictions – what’s in store for 2019?
Virtustream's Deepak Patil shares his predictions for how cloud computing will evolve in 2019.
Rubrik welcomes $261m funding for new market expansion
The company intends to use the funds from new investor Bain Capital Ventures will go toward future innovation and expansion.