Solution Services Market in the Philippines to grow at a five-years CAGR of 12.2% to reach US$372 million in 2007

October 08, 2004

Manila, October 08, 2004 – IDC's latest study on the solution services market in Philippines revealed that the local solutions market is expected to grow at a five-year CAGR of 12.2% to reach US$372 million in 2007. Based on the demand side research of 80 respondents, security solution is the largest segment, where close to 50% of the respondents have implemented. This is followed by storage solution and then ERM solution. IDC found that in the Philippines, there are still vast opportunities to offer enterprise applications solutions such as ERM, BI, SCM or CRM in near future as companies are increasingly realizing the importance of IT in supporting their business operations. Organizations find it more cost-effective to procure IT solutions that are explicitly designed and packaged to address particular business and technology issues. In response, ISVs should be prudent about appointing their SIs (systems integrators) and VARs (value-added resellers).

"One of the drivers for the increasing solution adoption rates is the desire for productivity and efficiency gains. This growth will continue as organizations continue to find ways to automate internal processes, boost customer retention, extend supply chains, and expand business online,” said Katherine Chan, Analyst, Services Research, IDC Malaysia and Philippines. “As solutions are increasingly integrated, borders between solutions areas become blurred, which creates opportunities for service providers to span the whole solution area to tailor solutions specifically to customers' needs.”

In this study, IDC examines the common characteristics of the top 5 local SIs. For services firms to be successful in the solution services market, they must be able to show quick ROI on new projects, have strong industry sector capabilities, and be able to provide a mix of business and technical skills to ensure that solutions address customers' real business challenges.

In the IT solutions investments, customers need and expect selected SIs to show deep understanding of their business issues and to be able to supply technology solutions that address these issues. It is a strategic advantage for SIs to acquire and invest in this particular skill set to position them as "quality end-to-end" solutions integrators in the market.

"On the other side, vendors should devise attractive partnership programs and introduce innovative and flexible pricing models to attract the right SIs. Branding is undoubtedly one of the most crucial factors that will help attract big local SIs to engage in a partnership program. To establish a long-term relationship with the appointed partners, vendors should be prepared to align their product offerings to suit the SIs target markets and, at the same time, to provide training and support to the partners" added Katherine Chan, Analyst, Services Research, IDC Malaysia and Philippines.

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