The Cloud Computing Market for SMEs
The great promise of Cloud Computing is the immediate access to enterprise grade software and next generation Information Technology solutions enables SMEs anywhere to expand their market reach, delivery and service, and customer interaction. The ACCA takes up Asia's first in-depth research into the SME sector, looking into 14 Asia Pacific markets, asking these questions: What are the demand drivers for SMEs? What are purchase characteristics of SMEs? What needs to be understood and addressed to capture areas of potential growth? The research is in three parts, broken in two documents: an Asian SME Index evaluating the attractiveness of cloud computing to Asian SMEs, an overall Executive Summary which reviews the SME sector in the region, and finally, country-by-country reports with key sizings of the SME market by industry, by lead adopters, and listing key support programmes and other enablers.
This ACCA research projects consists of two reports:
Business Process Outsourcing (BPOs), Technology Startups, and Retail to lead SME Cloud Computing Adoption in the Philippines, says new study by Apex Industry Association
• Country ranked 9th out of 14 (and 2nd in ASEAN, behind Singapore) in Asia Cloud Computing Association study on cloud computing attractiveness to small and medium enterprises (SMEs) in the Asia Pacific.
MANILA, PHILIPPINES (25 MAR 2015) – Business Process Outsourcing (BPO), technology start-ups and retail are the three industries likely to lead cloud computing adoption in the Philippines, says a new study by the Asia Cloud Computing Association (ACCA), the apex industry association for cloud computing in Asia Pacific.
While the Philippines ranked 9th overall out of 14 in terms of its attractiveness of cloud computing to small and medium enterprises (SMEs), it scored relatively well in terms of ‘Early Adoption Suitability’ in this comparative index of Asia Pacific economies.
“A combination of aggressive government initiatives for cloud computing adoption (such as GovCloud and the Cloud Top Project) and an increased emphasis in SMEs (such as the ‘Magna Carta for Micro, Small and Medium Enterprises’) boosted the country’s potential and attractiveness for cloud computing solutions,” observed John Galligan, Chairman of the ACCA’s Cloud Segments Working Group, which helmed this research project. But while SMEs make up 99.6% of all businesses, the sector’s contribution to the Philippines economy has remained small, around 35% of GDP.
“Therefore, the ability to increase both reach and productivity while controlling costs is therefore seen to be a compelling proposition, not only for the mid- and large enterprises, but for the SME sector as well,” said Bernie Trudel, chairman of the ACCA.
The Philippines ranked ahead of Indonesia, Malaysia, Thailand, India and Vietnam in the study, putting it second in ASEAN, behind Singapore. Japan, Singapore and Hong Kong topped the rankings, with South Korea, China, Taiwan, Australia and New Zealand forming the middle-tier. Countries were ranked on five pillars – market size, market coherence, market demand, price and government support.
The ACCA study is among the first to offer comparable statistics across these 14 Asia Pacific markets – economies in which SMEs comprise variously between 60-99% of all businesses, 50-98% of all employment and between 35-70% of GDP. Almost all governments across the region are targeting both the SME sector as an engine of growth as well as the IT sector as an engine of innovation.
“In this context, it is surprising that there are almost no comparable measurement benchmarks to assess the effectiveness of current investments for SMEs,” said Lim May-Ann, Executive Director of the ACCA. “Cloud computing promises to be the great leveller, bringing enterprise grade tools and capacity within reach of SMEs. In addition, it will bring next generation infrastructure benefits within reach of emerging economies without the need for crippling capital expenditure.”
SMEs in the Philippines are price-sensitive, and possess a limited budget for IT products and services. Additionally, they have minimal to no dedicated IT staff, thus preferring solutions that are easy to install and manage. Some of the key focus areas for cloud computing adoption include big data and business analytics by BPO firms, technology startups focusing on e-commerce, mobile applications, and transport applications, and solutions to simplify back- and front-end challenges for retailers.
Cloud computing is being seen as particularly useful for smaller BPO players, with one notable example being startup BPO software developer Orange & Bronze. “As the smaller players begin to expand with access to these enterprise grade tools, the single interface of a cloud computing solution becomes particularly appealing to BPOs operating from the Philippines,” said May-Ann.
The Philippines government has focused quite heavily on new IT solutions enabling overall economic growth, and supporting new cloud computing programmes, but much more has to be done to increase awareness, readiness and capacity among SMEs. “While factors like the absolute and economic size of the market, and the contribution that the SME base makes to GDP are important, our research shows that policy and market approach are just as vital,” said John Galligan, Chairman of the Cloud Segments Working Group, and also Regional Director Government Relations, Asia Pacific for Microsoft.
About the Asia Cloud Computing Association