The infrastructure and the ties to the US the Filipino software execs to give them an edge over their bigger rivals but a seasoned talent pool is lacking. For the new avenues for growth, as the Philippine software sector looks that it needs to be more than China or India in looking for the new opportunities. The industry according to the Philippine Software Industry Association or the PSIA, the industry had $423 million in the revenues from both outsourced and the product software in 2007. In 2005, up from $200 million and currently employs around 28,000 software developers. In 2009 most of the business will come from the customer support activities such as project maintenance and customer requested modifications, with a smattering of new product sales.
With the countries such as China and India compared in the argues of the Beng Coronel, the current PSIA president, the Philippines has better infrastructure and a cultural affinity with the US. However the uncertainty brought about by the US President elect Barack Obama’s promise to cut incentives for the companies that ship jobs overseas is casting a cloud on the sectors plan to reach $1billion in revenue by 2010. The PSIA estimates that the 45 percent of its offshore software work came from the US followed by the Europe and Japan with the roughly 25 percent each of the total.
In the Philippines, while the growth prospects are still uncertain for the big players operating. The situation is critical for the smaller local software companies run by entrepreneurs who make up about 90 percent of the sector. In 2003, the initial investment of $2 million, the Gurango has enjoyed annual revenue growth of 40 percent over the past two years but the CEO has cut his forecast for the 2009 to a 10 percent rate. In the lack of seasoned talent, the managing partner of Narra Venture Capital, Francisco Sandejas treading carefully. He is monitoring the customer plans for the investment in mobile and web outsourcing provider stratpoint, even though the company expects to double revenues in 2008 from the year 2007 and even it is relatively cheaper to set up a software company in Asia. The narra invest in the $1 million to $3 million range for the US investment but in Asia tranche sizes for the software venture capital are usually much smaller even the low as $250,000 for the venture projects in the Philippines.
With expanded efforts to increase the number of graduate students in computer science, a domestics stimulus package for the technology entrepreneurs combined. If the government decides to spend that in spending on the computerization of the elections or the wiring up of schools, it could prime the local tech sector. Even though Obama and the Democrats promise to cut incentives for the outsourcing in sending the contract work offshore that may still remain attractive due to the quality of the work and the significant cost saving s that offered by countries such as the Philippines. To increase its share of the business, the Philippines needs to improve its technical talent with the help of the academia, persuade its seasoned professionals abroad.
REFERENCE:
http://forums.seo.ph/showthread.php?t=4999
http://www.businessweek.com/globalbiz/content/jan2009/gb2009015_871284.htm
http://mabuhaycity.com/forums/economy-money-investment/9095-outsourcing-philippines-vs-china-india.html
