Challenge for IT firms lies in developing new markets in RP
Monday, April 21, 2008

MANILA, Philippines--The Philippine information technology market remains positive in terms of IT spending but the challenge for many vendors lies in developing new markets rather than rely on their existing client base, according to the head of an industry group.

Peter Tan, recently named Information Technology Association of the Philippines (ITAP) president, noted that many of the major IT vendors have had good performance in the last two years.

"Creating new markets is a challenge facing most vendors and suppliers right now," said Tan, who is also president and managing director of Japanese firm Fujitsu's local office.

Traditionally, banking and telecommunications have been the most lucrative markets in terms of demand.

In the past few years, the business process outsourcing (BPO) market has emerged as another profitable segment due to demand for equipment especially for PCs and other hardware.

Vendors, according to Tan, have largely competed for "addressable" markets in these sectors. "Companies in these industries continue to spend on IT," he noted.

"Outside of these industries, though, there have been little investments made that create new markets for IT," Tan said In an interview with INQUIRER.net. "In Fujitsu's case, for example, we largely address our existing Japanese accounts in the country."

Still, Tan noted bright spots such as services generating additional revenues for vendors. Revenue from services, in particular, is driven by efforts by end-users to maximize their existing resources with the latest technologies such as hardware consolidation

"In terms of absolute amount, services is growing, which is indicative of a maturing IT market," Tan said.

ITAP is the de facto industry group representing major foreign and domestic IT companies in the country.