Philippine SMBs to spend US$3B on ICT

Economic boom and growing population of small businesses in the country will boost spending by 12 percent in 2008 over last year, finds new study.

Small and midsize businesses (SMBs) in the Philippines are expected to spend more than US$3 billion on info-communications technology (ICT) this year, up 12 percent over 2007.

According to a new study released Friday by Access Markets International Partners (AMI-Partners), this growth is driven by a boom in the country's overall economy and an increase in the number of small businesses (SBs) with up to 99 employees.

Some 99 percent of all businesses in the Philippines are SMBs, which the research house describes as companies with up to 999 employees, and they are "significant contributors to technology spend" in the country, AMI-Partners' research analyst Ruth Garin, said in a press statement.

The bulk of this year's spending will be on telecommunications, said Singapore-based Garin, while spending on IT computing such as PCs, servers and printers, will make up over 25 percent of the total ICT spend.

A majority of the SMBs' telecom spend in the next few years will be on traditional telephony, as Filipino businesses associate traditional telephony with reliability, according to AMI-Partners.

Nonetheless, Internet Protocol (IP) telephony has started to make inroads into the local SMB market, Garin noted, but did not provide figures on how much had been invested in this technology.

In addition, Filipino SMBs are projected to spend over US$800 million on computing by the end of 2008. Most of this expenditure will be on desktops, which these companies rank as their first priority in terms of investment.

Garin added that SBs are expected to acquire more notebooks to cater to the growing number of mobile workers, and medium businesses will spend more on servers.

Security and storage applications will enjoy the fastest growth, at over 20 percent, among SMBs in the Philippines this year, according to the AMI-Partners study.

"The growing volume of e-mail and use of digital media will be the top drivers for adopting or enhancing storage infrastructure," explained Garin. "Security threats and the growing online population of the country will [boost] growth in security software spending."