Hardware still dominates Philippine SMEs overall IT spending, says IDC

December 27, 2005

Manila, December 27, 2005 –IDC's latest research entitled Philippines Small and Medium-sized Enterprise Communication Trends in 2005 identifies trends on telecommunications service uptake, network expenditure, service provider preferences and outsourcing by SMEs in the Philippines based on an end-user survey conducted by IDC.

The study reports that the SME segment continues to be a high-growth area in terms of telecom spending and addressable opportunities for many players in the telecom and IT industry. SMEs are headed toward a favorable direction as far as bandwidth consumption is concerned. Most SMEs use leased circuits for their core data usage and ADSL for their Internet access. Many these companies are also showing a propensity to gravitate toward IP VPNs, driven by cost considerations and the need to easily run certain applications. These companies, however, are likely to take the "do-it-yourself" (DIY) path rather than subscribe to managed IP VPN services.

The survey results also highlighted that the segment will seek to integrate voice and data traffic in their WANS, a move that is expected to open doors to more opportunities as far as IP applications are concerned, even though these have so far gained lukewarm acceptance from Philippine SMEs.

Mostly in small in terms of business and organization size, the natural progression for companies in this segment is to expand, which in turn will be accompanied by increased requirements for telecom. "IDC advises the vendor community that is hoping to tap into this segment to pay special attention to the unique telecom usage trends and preferences of the Philippine SMEs to timely capture and cultivate the emerging demand form this segment", says Karen Rondon, senior analyst, IDC Philippines.

Philippine SME Overall IT Expenditure Breakdown

Looking forward, SMEs are still bound to operate in the same level of IT expenditure for the rest of 2005. Hardware buying is still seen to characterize the bulk of spending.

For more information about purchasing the research, please contact Hazmi at +603-2169-7526 or hyusof@idc.com. For press enquiries, please contact Stephen Chong at +603-2169-7521 or ckchong@idc.com.

Contact

Lim Pao Shen
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Email: pslim@idc.com

Chong Chee Kian
Events & Marketing Executive
Tel: +603-2169-7521
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Email:ckchong@idc.com

Karen Rondon
Senior Analyst
Tel:+632-889-7068
Fax:+632-884-2399
Email: krondon@idc.com