Philippine SMEs rank faster deployment of applications, security and low total IT cost as top 3 strategic long-term requirements

August 15, 2006

Manila, Philippines, August 15, 2006 – In the Asia/Pacific (excluding Japan) region, or APEJ, the spending of small and medium-sized enterprises (SMEs) is heavily buoyed by the sustainable economic growth, giving rise to greater IT penetration. In the Philippines, SMEs are embracing IT adoption now, more than ever, as a tool for business operations and achieving business efficiency. Although there is still a large proportion of the SME sector that has only the very basic IT physical infrastructure, the large hike in IT expenditure in 2005 showed considerable development in implementing IT as a significant crux in day-to-day operations. With the market landscape becoming more competitive as new players continue to seek to penetrate various vertical industries, SMEs are reevaluating key strategic investments within a relatively limited financing capability.

IDC recently published its Philippine SME IT Buying Behavior study which examines the buying behavior of 131 Philippine SMEs, with particular focus on hardware adoption, namely PCs, servers and storage. Through a nationwide survey, IDC looked into how Philippine SMEs are planning to move forward when it comes to their respective IT road maps.

Figure below shows the SMEs' most important IT concerns.

Philippine Small and Medium-Sized Enterprises' Most Important IT Concerns

Q. What is the most important IT concern of your organization?

Source: IDC's Continuum Survey, 2006

Hardware spending topped SMEs' IT expenditure, as SMEs continue to make bigger inroads in infrastructure building. Computing environment products such as PCs and servers accounted for the biggest allocation. The survey also reports that SMEs choose products that have their desired features and better after-sales support, especially when the product or service is pegged at a lower price. More importantly, most SMEs tend to patronize brands with which they had favorable past experiences, with the Filipino concept of suki (meaning favorite patron or returning customer) coming into play.

The report adds that investments in the upcoming year will still involve hardware buying. However, these investments would be largely influenced by the long-term objective of implementing applications deployment in a faster manner, securing IT systems from unscrupulous external threats, and trimming down total cost of IT implementation/projects every year or over as a period of time.

SMEs are now more aware of the advantages of IT adoption, especially as 2005 saw higher IT budget expenditure. "Investment priorities from the SME sector will be driven by three key factors: deployment of applications, IT security, and cost reduction. Vendors and service providers will have to extend efforts in fully understanding SMEs' particular needs through careful evaluation of technological capability, budget consideration, long-term plans, and purchase-motivating factors", says Jubert Daniel Alberto, senior analyst, Peripherals and Consulting, IDC Philippines.

For more information about this report entitled Philippine SME IT Buying Behavior, 2006, please contact Elizabeth Shunmugam at +603 2169 7520 or eshunmugam@idc.com. Visit http://www.idc.com/getdoc.jsp?containerId=PH383105N to find out more.

Contact

Chong Chee Kian
Events & Marketing Executive
Tel: +603-2169-7521
Fax : +603-2163-5098
Email:ckchong@idc.com