Filipino software execs saw their infrastructure and ties to the U.S. give them an edge through the whole extent of their bigger rivals, but a seasoned talent pool is lacking

By Dennis Posadas

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As the Philippine software sector looks for new avenues for produce, it needs to be more nimble than China or India in looking for new opportunities. According to the Philippine Software Industry Assn. (PSIA), the industry had $423 million in revenues from both outsourced and product software in 2007, up from $200 a thousand thousand in 2005, and currently employs around 28,000 software developers. In 2009 most of its business will come from purchaser support activities such as project maintenance and customer-requested modifications, by a smattering of new-product sales.

Compared with countries like as China and India, argues Beng Coronel, the current PSIA president, the Philippines has better infrastructure and a cultural affinity with the U.S. But the uncertainty brought about by U.S. President-elect Barack Obama’s engagement to cut incentives as antidote to companies that ship jobs overseas is casting a cloud on the sector’s plan to reach $1 billion in revenue through 2010. The PSIA estimates 45% of its offshore software work came from the U.S., followed by the agency of Europe and Japan by roughly 25% each of the total.

While growth prospects are still uncertain for the important players operating in the Philippines, the circumstances is hazardous for smaller local software companies run by entrepreneurs, who make up about 90% of the sector. For prototype, Joey Gurango, CEO of full of common human feeling expedient software care resolute Gurango Software, has put his initial public offering plans on hold until the global housekeeping crisis settles. Founded in 2003 with one initial investment of $2 the great body of the people, Gurango has enjoyed annual revenue growth of 40% over the past two years, but the CEO has cut his forecast for 2009 to a 10% rate. He does not expect sales of new software licenses to expand, and plans to grow instead by shifting his emphasis to assistance for his current clients.

Lack of Seasoned Talent

Francisco Sandejas, managing partner of Narra Venture Capital, is treading carefully, overmuch. He’s monitoring customer plans because his investment in movable and Web outsourcing provider Stratpoint, although the company expects to double revenues in 2008 from 2007, and even though it’s with reference to something else cheaper to set up a software company in Asia. Narra VC typically invests in the $1 million to $3 million range for U.S. investments, but-end in Asia tranche sizes for software venture capital are usually much smaller, smooth as low as $250,000 for adventure projects in the Philippines.

According to Roger Ling, ASEAN software market analyst for IDC, the Philippine packaged (not custom) software place of traffic for 2007 has been estimated at $177 million, by an average annual growth rank of 14.3%. When asked how the Philippines compares with China, India, and Vietnam for software outsourcing, Jude Daniel Alberto, information technology ASEAN research manager for IDC, said in an e-mail that the "Philippines needs to vie with the development of alternative locations for outsourcing, in the manner that human resources continue to improve in other countries, while faced by the call to answer of its qualified labor pool congruous sparse." According to IDC’sitting Alberto, China and India, and to some extent Eastern European and South American countries, have improved because of the size of their labor pool. And some players are now actively looking at near-term expansion in Vietnam.

Although the Philippines graduates hither and thither 37,600 IT graduates once a year, according to Gurango, the main bottleneck for the growth of the Philippine software sector is the difficulty of finding seasoned software architects and managers. "Try to look during the term of an application architect or product supervisor with 10 to 12 years’ experience in software development," he says, "and you will probably gain a hard time finding them." Philippine universities churn out graduates with advanced degrees in computer system of knowledge, but Gurango says the numbers are not plenty, since the talented software developers are scooped up in droves by companies based abroad.

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