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Philippine software houses now have a foothold in the global market:
$359 million in sales in 2007 and a projected 30-percent growth in
sales revenues this 2008.
This development announced last week at the
two-day Eighth e-Services Philippines conference and exhibit at the
SMX Convention Center at the Mall of Asia Complex in Pasay City.
Since 2001, the Center for International Trade
Exhibitions and Missions of the Department of Trade and Industry has
been holding this event each February to promote the Philippines as
a global supplier of offshore and outsourced e-services.
The Philippines appears to have begun hitting
pay dirt finally and this includes software development.
True, the nuggets software houses here have been
getting vis-á-vis sales revenues are still small when examined in
the context of the overall market globally for computer programs as
this is worth several billions in US dollars.
Nevertheless, a beginning has been made and the
future promises even bigger rewards.
Tech Times had the chance to speak with
Philippine Software Industry Association President Ma. Cristina
Coronel during the e-Services conference and exhibit. She admitted
the country’s software houses today still derive their export
revenues from the value-end segment of this global tech market.
This niche consists of custom-built applications
for the computer systems of large US firms and other organizations.
Maintenance and support for these programs often form part of the
packages.
There is nothing sexy about these programs. No
geek would ever drool about them and rush to make a review about how
they were coded. And unlike in the case of off-the-shelf packages
bought in large numbers by consumers and corporate customers,
players in this niche have little chance of becoming global software
behemoths ala Bill Gates’ Microsoft or Larry Ellison’s Oracle.
But as the PSIA president pointed out to this
reporter, this market is worth at least $3.6 billion yearly. Hence,
even now, when export earnings are beginning to come in,
Philippine software houses still have to tap its full market
potential.
Moreover, this is how India started on its path
to becoming a global software powerhouse, which is now exiting this
niche, the Philippines stands a very good chance to take over this
segment.
But Coronel did admit that Philippine software
houses will have to move up the value chain to truly earn more
revenues. Such would have to take place even as more opportunities
in the applications development and maintenance niche are seized.
Movement up the value chain would mean venturing
into knowledge processing, according to Coronel. In doing so,
Filipino software houses would have to develop applications for the
collection, analysis, and synthesis of information. It was this
reporter’s impression that such development would involve in good
part the writing of programs with artificial intelligence.
Inevitably, the subject of political
destabilization attempts cropped up in our conversation with Coronel.
This reporter asked if these would affect the further progress of
software houses.
Her reply: “Such attempts now factor into the
business continuity plans each software house has drawn up. This is
in addition to contingency plans for natural calamities such as
earthquakes, floods, and supertyphoons.”
One example would be Pointwest Technologies, the
very company where she is president. Its office is near the Manila
Peninsula Hotel in Makati City.
On November 29, it promptly shifted operations
to its backup site in Ortigas Center. This was when Senator-elect
Antonio Trillanes 4th led a band of disgruntled soldiers who
occupied the hotel and from where he issued calls for the Philippine
President’s overthrow. Despite the tumult, it was business as
usual for Coronel’s software development house.
Recession or not this 2008, the PSIA president
expressed confidence software houses here would continue to thrive.
She pointed out that outsourcing to the Philippines would be a
cost-effective way for US firms to weather any economic downturn.
True, political events indicate that the
Philippines may again find itself in interesting times. But software
houses will most likely remain unaffected. As one other top
executive of an e-services firm remarked, “Let the politicians
play their games. We will stick to our business while they do so.”
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