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Corporate tech spending to slow down but tech use to go full throttle

By David Dizon
January 06, 2009
Depending on which segment of the tech sector you're asking, 2009 promises to be a year when companies slow down in terms of tech spending even as the average digital Pinoy goes full throttle in adapting the latest trends in gadgets, software and the Internet.

According to Singapore-based technology firm Springboard Research, the Philippines is one of two countries running a medium risk of significant IT spending slowdown in 2009. Overall, the company predicted that IT spending in the Asia Pacific region excluding Japan will slow down to 7.1 percent in 2009, down from 2008 growth of 10.2 percent.

"The most affected countries will be mature IT markets in export-oriented economies such as Korea and Taiwan, and countries heavily dependent on the financial services industry such as Hong Kong and Singapore." the company said in its "Asia Pacific IT Market Predictions for 2009" report.

Microsoft Philippines Managing Director Rafael Rollan echoed the Springboard report, saying that many of its top clients were already talking about belt-tightening measures as early as the last quarter of 2008. He said the effect of the global economic downturn has led many companies to make the most of their existing IT investments while holding off on significant IT infrastructure-related investments next year.

"A lot of people have already said that 2009 is going to be a tough year for the economy and that holds true for tech spending as well," Rollan said.

The Springboard report said that in an effort to reduce costs, companies could turn to cloud computing as an alternative service delivery model and software-as-a-service related projects to help minimize upfront capital expenditure. Cloud computing is Internet-based development and use of computer technology that allows users to access technology-enabled services from the Internet without knowledge of, expertise with, or control over the technology infrastructure that supports them.

It also said that developing countries such as the Philippines will contribute significantly towards growth of various outsourcing services segments as more companies go for enterprise-wide outsourcing to cut cost.

Financial crisis to benefit Asia-Pacific

Springboard also predicted that in the next two to three years, the current global economic crisis will help drive the ongoing transfer of wealth, power and innovation from West to East. It said multinational vendors will continue to view Asia as a critical growth market, which will lead to more US-based firms increasing overall budgets, staffing and executive focus into the region.

Springboard said this would help boost spending on IT education and infrastructure, which will be an early indicator that the financial crisis is abating.

"At the end of this crisis, we will see Asia emerge as a much bigger part of many companies' global strategies - both from IT vendors investing more in the region as well as other vertical industries funneling more investments into Asia; thus creating the opportunity for more IT spending related to these investments," the report said.

Internet surfing migrates

If corporate tech spending seems mildly cautious for next year, the same cannot be said for the average Pinoy�s enthusiasm to use the latest model cell phone or finding out the best use of a Web innovation.

According to the Nielsen Global Online Consumer Survey for 2008, the Philippines topped a list of 52 countries in terms of overall media consumption via a range of devices, particularly high-tech next generation mobiles and handsets. The survey said the high overall device usage in the Philippines could be attributed to poor landline access, lower Internet penetration and the youth of the country�s online population.

Manila Bulletin technology editor Art Samaniego says he does not expect Filipinos to stop splurging on the latest mobile handset since the device serves as a communication tool, camera and even status symbol of the owner.

"The Pinoy saves for the cellphone. That's the mentality," he said.

Samaniego said that while Filipinos are popular for being the world's texting champs, they are also making a name as trendsetters in terms of online media use. In 2008, various reports showed the Philippines as a hotbed of social networking and blogging activity as its online population was identified as the heaviest users of social networks Multiply and Friendster.

Samaniego said the increasing popularity of wireless broadband and rise in sales of netbooks could mean a shift in Internet habits of Filipinos. Netbooks are light-weight, low-cost, energy-efficient and highly portable laptops suitable for Web browsing, e-mail and general purpose applications.

'With the faster Internet connections coming in, I think Internet shops could take a hit. The high usage of wireless broadband units such as Globe Visibility and Smart Bro as well as the sale of netbooks could also encourage higher Internet use in the homes. Internet surfing will finally migrate to the homes,� he said.

"On the other hand, Internet shops are not going to go away anytime soon because it really caters to the gamers," he added.

He also said that microblogging, or blogs that allow users to send brief text updates via SMS, could find a niche in the country as Filipinos find the best and most practical use for today�s technology. "If Filipinos could find a use for texting, who knows what they'll come up with in blogs and social networks?" he asked.

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