Is IPVG's change of heart the right beat?

Is IPVG's change of heart the right beat?

Summary: As it veered further away from its tech roots, Philippine IT conglomerate IPVG has made it clear its future now lies on mining--and not on ICT.

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Back in 2008, when I was still heading the local IT press organization here in the Philippines, we held for the first time an IT award ceremony in which we honored the tech industry's best.

The person we named as "IT Executive of the Year" was a young, hard-driving guy named Enrique Y. Gonzalez. A member of the ultra-wealthy Yuchengco clan, Gonzalez almost came out of nowhere to establish a sprawling IT conglomerate.

As the CEO and driving force behind IPVG, Gonzalez oversaw a vast IT empire composed of data centers, call centers, online games, IT security and e-payment products.

At one point, Gonzalez almost succeeded in acquiring U.S.-based call center operator PeopleSupport. He was rebuffed, however, after PeopleSupport later opted to sell itself to an Indian company for a higher price.

Nonetheless, the incident did not diminish Gonzalez's resolve. I particularly admired his bravado and foresight in getting the ticker name "Cloud" for IP Converge Data Center when the company went public for the first time.

I was there during the morning when IP Converge made its IPO at the Philippine Stock Exchange and saw the wide grin on his face when he rang the bell to signal the listing. At that time when cloud computing was just starting to become a buzzword, Gonzalez was astute enough to claim the "cloud" as a sort of nickname for his company.

His online game subsidiary, E-Games, also expanded like crazy and immediately matched--if not toppled--the then reigning champ. It organized game confabs that drew hardcore gamers by the hundreds of thousands.

Gonzalez, literally, was at the top of his game. He was an IT kingpin. Then, he had a change of heart--or to be more precise--a change of business direction.

Suddenly, he was no longer enamored with IT. Instead, he turned his focus on mining. From the cutting-edge industry associated with the latest technologies, Gonzalez took his company to an old, somewhat discredited business segment.

Eventually, stockholders of IPVG approved the amendment to the company's Articles of Incorporation that changed the corporation's primary purpose, allowing the company, among others, to establish a refinery in the Philippines to refine metal ores and minerals.

Gonzales then engineered the company's US$250 million-investment in a Chinese mineral refinery. He then proceeded to dispose of his company's IT assets one by one.

He first sold off the call center business to Hong Kong telco PCCW. This was followed by the sale of the company's shares in Internet security firm, Prolexic Technologies, to a U.S.-based company. IPVG then struck a mega-deal by ceding control of its online games unit, E-Games, to main rival Level-Up.

The IT conglomerate's crown jewel, IP Converge, got the boot last June 2012 when the data center operator was purchased by an unknown real estate firm, called 8890 Group.

As it veered further away from its tech roots, it became clear the company was no longer as bullish on ICT as that fateful day when it listed IP Converge on the local bourse with the ticker "Cloud".

It still boggles me as to why Gonzalez, or IPVG for that matter, is taking this path. Granted that mining is more profitable and makes more business than ICT as this point, they are missing the opportunity to make a real and lasting contribution to the country's economic advancement.

I now remember a well-known anecdote on the late Steve Jobs, who reportedly told John Sculley, the Pepsi executive whom he was recruiting then, with these words: "Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?"

The same question is apt for Gonzalez and his team. Do they want to keep drilling the earth for more money? Or do they want to change the Philippines via ICT?

Topics: Tech Industry, Philippines

Melvin G. Calimag

About Melvin G. Calimag

Melvin G. Calimag is currently the executive editor of an IT news website in the Philippines. Melvin has been covering the local IT beat for the last 13 years. He is currently a board member at the IT Journalists Association of the Philippines (CyberPress), and also serves as a charter member with the Philippine Science Journalists Association.

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3 comments
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  • but then...

    "Do they want to keep drilling the earth for more money? Or do they want to change the Philippines via ICT?"

    does it matter when the "Taxes" go to someone like *insert corrupt politician here*, but I digress.

    I bet its just the same reason why programmers opt to go to Singapore(ICT elsewhere) than stay in the Philippines(ICT here).
    TheFilipinoFlash
  • Is IPVG's change of heart the right beat?

    the philippines is still borrowing billions of dollars a year from imf to invest in farming. out of those billions, 65 to 75 percent goes to line the pocket of corrupt govt officials and the rest are disburse to the local govt and ngos where another ten percent will disappear leaving 15 to 25% to invest in farmland that will be visited by no less than 10 hurricanes and get decimated. my point is, if the us has no industrial backbone, the natural disasters that strike the continental usa every year will reduce it to a pauper state. the only striking difference is that the us leaders knows how to run a country while the philippines are lead by i*&ot both in the private and public sectors. if they will borrow billions of dollars and invest it in technology, come and go hurricane and floods, still the investment is intact. they might need to dry and dust it a bit but then become productive again, without losing their borrowed investment (the billions from imf). in addition, if they will invest properly those borrowed money without touching a single cent of it, the return will be substantial that those corrupt bas**rd can openly steal half of roi without reducing the country into a pauper state as it is now. the philippines was borrowing and politicians were stealing for the last 60 to 70 years, think how mind boggling the amount of money that were lost. back in the 70's, japanese delegation went to the phils and the rest of asia, touting the merging of computing and communications as the new pardigm shift that will change the technology landscape in asia and the whole world, but guess what, only singapore listened and leapfrog everybody for at least ten years before the rest of the tigers caught up. the philippines, nada! am not here to disparage the country and its people, but to open their minds at the mind boggling incompetence of their elected and not elected leaders. perhaps they have to adapt the us electoral college to elect their president and vice president until such time that the simple minded pepe and pilar can handle the process without selling their precious vote for a mere ten dollars. and maybe the competency will trickle down to the general population... and hopefully industrialized the sick man of asia once and for all.
    kc63092@...
  • it's all about the money

    at the end of the day, it's all about making money for yourself and your shareholders. the guy used what they call build and sell. you build a company, pour in your resources, make it big, do a bit of PR and say you're also trying to make a difference in the industry that you're in. you get people to believe in your tripe and then when you've built that "brand" you sell it for a ton of money. typical businessman. no different from the rest.
    ricardomontesillo