PH small businesses lure cloud computing giants

Chris Schnabel
'The Philippines has a booming economy. There is a huge appetite for innovation here and the market is very open to fresh ideas,' says Microsoft Philippines' COO

SKY HIGH. Tech giants like MIcrosoft and Amazon are starting to come into the the Philippine market in force due to the booming economy and growing tech sector

MANILA, Philippines – Global tech giants like Microsoft and Amazon have zeroed in on the Philippines, particularly in its small to medium enterprises (SMEs) and startups, as a global hotspot for future cloud use.

Cloud services for enterprises have been available in the west for the better part of a decade now and have started creeping into the Philippines in the last 3 years. Now it’s really starting to take off, explained Cian O’Neill chief operating officer of Microsoft Philippines. (READ: PH climbs to 10th spot in cloud readiness rankings)

“The Philippines has a booming economy. There is a huge appetite for innovation here and the market is very open to fresh ideas. Universities are also now constantly producing  a digitally capable workforce,” he said on Wednesday, September 9.

O’Neill, was speaking from the sidelines of day two of the Microsoft Big Top Cloud Festival that runs until September 14 at the Blue Leaf in Paranaque City.

The event is particularly geared toward SMEs, with over 500 scheduled to attend.

“Without, a doubt SMEs present the biggest opportunity for cloud services in the country,” O’Neill said. (READ: Cloud: The Great Leveller for SMEs)

They are quick, fast and agile, and lack the red tape that bigger firm need to go through. They the ones that can benefit the most from cloud’s ability to lower costs and be as responsive as possible to a customers needs, he explained.

The fact that the technology-driven BPO industry dominates the economy now, O’neill said, is a good indicator that in “the future of the Philippine economy will revolve around the smaller tech startups and entrepreneurs.”

SMEs account for 98% of the economy and its employees are also pre-dominantly young and mobile-centric, which makes adopting the cloud a good fit for their firms.

A recent report by global consulting firm PriceWaterhouseCoopers showed that 41% of millennials prefer to communicate electronically at work than face to face, and 75% believe that access to technology makes them more effective at work.

In the Philippines, 83% of SME employees are spending over 20% of their working time outside the office, relying on mobile devices and online cloud-based tools for communication and productivity.

O’Neill said that, based on statistics gathered by Microsoft Philippines, SMEs that adopt the cloud are 1.7 times likelier to have more than 10% growth in terms of annual revenues compared to those that do not. This indicates that SMEs would be inclined to go on the cloud, he said.

DIGITAL FEST. Microsoft's inaugural Big Top Could Festival aims to inform customers on the role of technology in becoming responsive and customer-obsessed in today’s "New World of Work". Photo by Chris Schnabel / Rappler

BPO opportunities

Aside from serving as an economic signpost, the BPO industry also provides opportunities for cloud multinationals whose growth targets are focused on smaller firms in second- and 3rd-tier cities

“We’re not just focused on big firms like Accenture, which also has its own cloud systems. But for smaller ones starting up, the quickest way for them to scale up is by adopting cloud services,” O’Neill pointed out.

Growing trends in the BPO industry, especially in health care, also provide ample opportunities for cloud computing. (READ: IT-BPM industry to fill demand for health care outsourcing)

One example is Lifetrack Medical Systems, a digital healthcare startup based in the Philippines which delivers radiology services to its global clientele using Amazon Web Services (AWS) cloud platform.

The firm addresses the global shortage of highly trained radiologists by pairing up resident-level radiologists with experienced local and international practitioners who can give assessments remotely anywhere in the world through the cloud.

CLOUD MERCHANT. Microsoft COO Cian O'Neil (in blue) says that the firm's existing partnerships with businesses in its 20 years of operating in the country as well as its extensive data server network sets it apart from other tech giants. Photo by Chris Schnabel / Rappler

Eliminating security risks and expenses

Another selling point to attract local SMEs is the ability to provide comprehensive security at lower costs, especially as digital hacking is a growing theat. 

In its 2015 Global Risk Management survey, Global risk management firm AON listed cyber risks in their top 10 risks to enterprises for the first time at number 9, said Pierre Noel, chief security officer for Microsoft Asia Pacific.

“To address cyber security is not cheap. A firm cannot fix the problem using just firewalls and antivirus software to deter attacks,” he said.

Firms subscribing to cloud services from a global giant, such as Microsoft or Amazon, means that they also get the firms’ built-in security for their data, which more often than not is far more robust due to their massive resources.

Noel emphasized this, stating “Microsoft’s data center is probably more secure than any data center found in the Philippines.”

With the world getting more and more digitized and generating ever increasing data daily, global trends all point toward adopting the cloud as the future for any enterprise.

“More and more small firms around the world are starting to get into the cloud and these are seeing their growth figures double. The global trend is clear, either firms get with the cloud or hang back,” O’Neill said. –