Feature Articles
IDC Futurescapes 2017: A glimpse into the future
By Lionell Go Macahilig - 23 Feb 2017,12:31am

Introduction

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IDC Futurescapes - An overview

Each year, renowned market research and consulting firm International Data Corporation (IDC) releases its top ten predictions that will shape and have an impact on the regional ICT landscape. With a pool of nearly 2,000 analysts in more than 100 countries worldwide, IDC has been thoroughly studying a variety of trends in the field of ICT for more than half a century. Apart from IDC’s predictions for the entire globe and the Southeast Asian region, what are more important for us, as Filipinos, are the localized predictions. Today, these are all encapsulated in IDC’s Futurescapes 2017.

For more than a decade, IDC has always been a witness of the many changes that took place in the Philippine ICT landscape. The organization was among the first authorities that talked about the rise of business process outsourcing (BPO) and the role of the country as a cyber-service corridor. It also mentioned the trend of regionalization or the flow of ICT spending and investments in the BPO sector outside Metro Manila. Still aligned with the success of BPO in the country is the rise of Pinoy animation industry in 2004, which eventually became one of the biggest pillars of the local BPO industry.

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IDC also talked about online gaming and the rise of the Internet cafes. Back then, the firm saw it as a channel for everybody to have an access to the Internet. The digital divide among consumers was further reduced with the advent of prepaid Internet which eventually evolved into a more dynamic set of offerings from local telcos. IDC observed that these offerings are a reflection of the Filipino consumer concept of “tingi” and this extends to SMEs and enterprises as well.

IDC also saw the rise of mini notebooks (netbooks) and the Philippines was one of the countries that experienced a high penetration rate of these products across the ASEAN region. Coinciding with the increased accessibility to the Internet and availability of mobile devices among consumers, Web 2.0 technologies emerged, which consisted of blogs where users can give instant feedback and conduct crowdsourcing, paving the way for the rise of social media which eventually became more powerful. Fast forward to the present, IDC is now talking about the movement toward digital transformation.

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Digital transformation

IDC claims that it is among the few firms that have been talking about digital transformation or, in the company’s term, DX. Over the past two to three years, the ICT landscape has witnessed the rise of third platform technologies which primarily consisted of core technologies such as cloud computing, data analytics, mobility, and the mashups of these led to the development of innovation accelerators. Along with the allied technologies of mobile devices and mobile apps, all of these brought about 20 to 25 year technological shift that affected the way we do things, from the personal level and to our work as well.

By 2020, IDC is anticipating that 90% of growth in IT will actually come from the third platform technologies and, more interestingly, 15% of it will actually come from the emerging markets such as the Philippines. During the same period, the Philippines will definitely live in the new app economy as there will be 20x increase in the number of apps that we are going to use.

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The Philippine GDP growth from 2010 to 2020 shows a healthy ICT spending in the country. In spite of the GDP drop in 2011, which also caused a 4.2% drop in ICT spending in that year, GDP from 2012 to 2014 grew again and it was observed that SMEs and enterprises were contributing a lot to ICT spending. By 2016, the country actually experienced growth by 8% in terms of total ICT spending. For this year, IDC is seeing that the total ICT spending in the Philippines will be about PhP 14-billion in total and by 2020, it is expected to become a PhP 16-billion ICT economy, at par with our neighboring countries in the ASEAN region.

Largely, the Philippines is still a hardware-centric market, in which devices make up the bulk of ICT spending. However, this year, IDC is seeing that there will be a significant growth in IT services. It is a good sign, maturing enough particularly in the SME and enterprise sectors. By 2020, there will be a huge chunk of IT services in the country, leading to what IDC believes as Philippines 4.0 or the dawn of the DX economy.