Credit: IDC

Channels brought in higher levels of stocks across all brands this quarter after clearing ageing inventory last quarter. Sales of touchscreen Windows 8 notebooks also picked up as end-users warmed up to the new user experience offered by these devices. But these improvements were not enough to arrest the YoY slide in the market.

“Despite the improvement in consumer PC shipments, IDC expects vendors to find it difficult to match their year-on-year sales in 2013,” said Juan-Jin Ng, market analyst for client devices research at IDC Asia-Pacific.

“Mini-notebooks which were a significant volume driver in 2012 are being phased out this year. The market has yet to identify a replacement form factor which can match the price and popularity of mini-notebooks,” he explained.

IDC has consequently lowered its forecast for the Philippines PC market.

Daniel Pang, Asean research manager for client devices at IDC Asia-Pacific commented, “The onslaught of entry-level tablets and smartphones are expected to have an adverse impact on the PC market in the upcoming quarters. Tablets like Asus’ MemoPad, and smartphones like Cherry Mobile’s Candy TV are bound to attract end users, especially with telco subsidies making these devices even cheaper to own.”

Asus improved significantly this quarter by pushing higher volumes of touchscreen notebooks into the retail market. Acer may be gaining share sequentially, but is declining drastically YoY due to falling demand for its mini-notebooks as well as increased competition from other vendors.

The two DOST agencies responsible for the initiative — the Information and Communications Technology Office (ICTO) and the Advanced Science and Technology Institute (ASTI) – said GovCloud will enable government agencies to use secure online applications for their various computing requirements.

The cloud infrastructure was unveiled by Integrated Government Philippines (iGovPhil) Project during the four-day celebration for ICT Month 2013 held last week.

“With the GovCloud, agencies can maximize their resources and significantly reduce operating costs as they only use server resources when they need it, and when server load is high they can be allocated additional resources almost instantly,” commented DOST-ICTO undersecretary Louis Casambre

An example of “cloud” computing is that of Google, wherein users have files and applications on the Web, doing away with local storage. All the users need to access their files and email on the Web is a Web browser. This kind of service is public cloud.

The GovCloud is essentially a private cloud for the government and will be available for government agencies and their employees.

“Initially, basic cloud applications such as GovMail (government email), Web hosting, and payment gateway applications will be available,” said DOST-ASTI’s Denis Villorente, iGovPhil project director.

“Project management, storage cloud, VoIP and government portal applications will be available in the near future. Custom cloud computing applications and platforms will also be available for those who need it.”

Cloud computing has brought about a significant change in the economics and sustainability of ICT. By sharing computing resources through a high speed network connection or the Internet, applications can be allocated resources when needed and as needed, thus, reducing hardware acquisition and maintenance costs, essentially creating an “economies of scale” for computing.

Several government agencies have already expressed interest in GovCloud, according to ICTO.

“The GovCloud experience for government agencies will be significantly enhanced with the activation of the fiber core network, which will provide high-speed data connectivity to iGovPhil’s data center that hosts the GovCloud,” Casambre said.

The government fiber optic network is slated to be operational next month.

Ericsson Connected Vehicle Cloud took first place in the enterprise solution-general business category for its innovation, functionality, technological importance, implementation and overall “wow” factor.

“This year’s awards highlight the awe-inspiring and significant impact the wireless industry has on every sector and on our daily lives. We’re pleased to showcase the vision and ingenuity from our industry at CTIA 2013, which is North America’s largest mobile marketplace. We congratulate Ericsson on its Connected Vehicle Cloud for its E-Tech Award,” said CTIA vice president and show director Robert Mesirow.

Ericsson’s Connected Vehicle Cloud delivers opportunity for stakeholders in the automotive and technology ecosystems to reach drivers and passengers in new ways.

Based on the Ericsson Service Enablement Platform, it connects application developers, government organizations, businesses, automotive manufacturers and consumers.

It targets existing and future demands on scalability, security and flexibility in the global automotive industry. The result is a transformed driving experience and new opportunities for players in the automotive ecosystem.

“The automotive industry is an increasingly global business, and connecting vehicles demands a new profitable innovative business model that will leverage the potential of the automotive ecosystem and connect the car with other connected industries,” said Per Borgklint, senior vice president and head of business unit support solutions at Ericsson.

“The Connected Vehicle Cloud builds on and combines today’s telecom network capabilities and delivers dramatically improved quality of experience. We are thrilled to be recognized for the innovation this solution brings to market as we help to advance the connected vehicle market.”

Nearly 300 CTIA E-Tech entries were judged by a panel of highly respected industry experts, reporters, and analysts. The winners were announced during the CTIA Conference at the Sands Expo & Convention Center in Las Vegas.

Amar Mehta, Cyberoam country manager for the Philippines, said during the press briefing that the local subsidiary will provide support for distribution to further grow the Cyberoam brand in the country.

Cyberoam country manager for the Philippines Amar Mehta

“We have been interviewing candidates already. Definitely, a lot of things will change with the local presence of Cyberoam in the Philippines. Most important is that customer support will be stronger as we will be working with our distributor and channel to provide better after-sales product and technical assistance,” Mehta said.

Mehta also expressed optimism in picking up market share in the Philippines which he describes as a real growth market in the region.

“The Philippines is one of the fastest growing countries in the entire Asia Pacific and we see a lot of potential in this part of the world. We believe that the security awareness here is growing. Local businesses are beginning to understand the importance of protecting their valuable IT infrastructure,” he added.

Scott Gonzalo, managing director of NetPlay Incorporated (NPI), the exclusive distributor of Cyberoam solutions in the country, said the establishment of a Philippine unit augurs well for local businesses.

“The local market now has access to a very powerful, enterprise-grade network security product that will provide them with control over their networks while they deal with emerging IT technologies and security risks at the same time,” Gonzalo said.

Also at the event, held at the Fairmont Hotel in Makati City, Cyberoam announced the launch of NG series — its next generation unified threat management (UTM) models.

The latest product line from Cyberoam seeks to address the evolving security needs of organizations of all sizes from small and mid-sized businesses (SMBs) to large enterprises.

The Cyberoam NG series offers best-in-class hardware, along with matching software capabilities and security features like Web Application Firewall, Application Visibility & Control, Identity-based Controls with Layer 8 Technology, Advanced Threat Protection comprising Intrusion Prevention System, Gateway Anti-Virus/Anti-Spyware, Gateway Anti-Spam, Web & Content Filtering, and Outbound Spam Protection and VPN.

“This has been the best era of technology so far. Today, the Internet has gone to the next level of speed and performance. Due to increased availability and use of smartphones, high-speed Internet connection technologies, connectivity has increased by leaps and bounds. In this changing scenario, security is often compromised as security solutions do not match with the evolving IT infrastructure,” said Mehta.

NG Series appliances come pre-loaded with CyberoamOS, a new firmware that integrates with the hardware for network and crypto acceleration to deliver high performance of security solutions.

The CyberoamOS also extracts full performance from a multi-core platform, along with offering minimum latency and improved processing speed with use of optimized Interrupt rates and FastPath technology.

The NG series appliances come with hardware consisting of Gigahertz processors for nanosecond security processing along with Gigabit Ethernet ports and high port-density.

The design and components used in the NG series support high speed I/O throughputs for better performance, as well as protect against tough environment conditions, including power surge and fluctuations.

The forecast includes spending by government sector organizations on hardware, software, IT services and telecommunications.

Analysts revised the growth rate downward from the previous forecast of 0.2 percent growth, as government agencies continue to struggle against weak economic development.

Despite decreased spending in some areas, a recent worldwide government IT spending priorities survey by Gartner indicated that mobile technologies, IT modernization and cloud computing are the top three focus areas for investment in 2013. Strong interest continues to grow in professional services and big data.

“Cloud computing, in particular, continues to increase compared with prior years, driven by economic conditions and a shift from capital expenditure to operational expenditure, as well as potentially more important factors such as faster deployment and reduced risk,” said Christine Arcaris, research director at Gartner.

“Other areas, such as data center consolidation, are lower on the list than in previous years, perhaps demonstrating that they may have met resistance in a more strategic roll-out. Vendors should be ready to reposition offerings according to these changing market dynamics.”

Survey respondents reported that they are adopting public and private cloud-based services at an increasing rate, with 30-50 percent of organizations planning for, or having an active IT services contract within the next 12 months.

While the focus initially was on software-as-a-service (SaaS) implementation, future rollouts will include infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).

As the top priority, mobility is increasing in importance among government agencies worldwide.

Demand is strongest in government agencies with more decentralized staff and those that have a large field workforce or specialized needs (such as border patrol agents, inspectors and social workers) and that benefit from mobile investments.

This next wave of technology adoption will develop over time, as agencies replace existing hardware with new mobile infrastructure and devices.

The survey showed that momentum is building for bring-your-own-device (BYOD) programs, but questions continue. Of the organizations surveyed, 52 percent said employees are allowed to bring their own smartphones to work, and 50 percent can use their own laptop, followed by tablets at 38 percent.

Vendors must also understand how growing interest in BYOD policies and strategies may impact opportunities in the government sector. Security and governance may limit the pace and adoption.

The survey also indicated that while big data is not yet a high priority among survey respondents, it is gaining momentum. The focus on government efficiency and effectiveness means opportunity for big data/analytics, as it represents an emerging focal point for specific government modernization.

“Government organizations have increased big data spending for improper payment systems, indicating the desire to tackle fraud, waste and abuse within agencies, as well as target upfront errors in revenue collection,” said Arcaris.

“While agencies are assessing how to manage, leverage and store big data, not many have addressed the challenges associated with the utilization of content and the issues associated with merging large amounts of data onto a single platform.”

Vendors must acknowledge the challenges here, and tie big data solutions back to specific agency workflows, Gartner said.

Cloud computing firm DataOne Asia Philippines said companies would do well to acquire a Disaster Recovery Plan (DRP) to save their IT hardware, data, and even their reputation.

Aside from CloudSecure, an enterprise cloud product that was officially launched to the market last year, DataOne Asia also offers a DRP for enterprises in the Philippines.

DataOne Asia President and CEO Cyril Rocke said companies must have a DRP to ensure business continuity in times of calamities like typhoons.

“Companies should have a DRP in place because the lack of such a plan could mean the end of a business. The DRP prevents or lessens the damages that companies can get from sudden catastrophic events.”

In a nutshell, DR planning is when a company creates a backup of its IT system and files in an offsite location in preparation for both natural and accidental disasters.

While many businesses in the country are required by law to have a DRP, there are still those who overlook this important business component. Rocke said having a DRP is a must for companies in the Philippines, which is frequented by typhoons throughout the year.

“During typhoons, we know that the streets become easily flooded. Some companies, especially those located near large bodies of water, can have their buildings infiltrated by water, which may damage servers and lead to data loss,” Rocke explained.

While servers damaged by floodwaters can be easily replaced through insurance policies, it may still take some time to restore the entire system back to normal.

According to DataOne Asia director of operations Alex Fernando, a company may have to wait at least a month for its IT operations to resume after purchasing a new set of servers.

“Replacing damaged hardware cannot be simply done in one day or even one week. If you don’t have a DRP in place, it can take a company at least a month to buy new equipment, install programs and restore everything.”

Aside from hardware glitches, data stored in servers can create problems for companies. Rocke said that companies without DRPs that lose data after a disaster have a high rate of failure.

“Once a company loses its precious data, it will have a hard time getting back on its feet. In fact, around 80 percent of businesses will go bankrupt in their first year or within a couple of years after a disaster,” he said.

Aside from floodwaters, another problem that might spring from severe weather disturbances is power failure. Fernando explains that typhoons can actually take a company’s entire IT system offline, which can create detrimental effects.

“When a company’s IT system is down, it means that all the applications will not be available for their use. Say that you are a logistics company that has a dysfunctional IT system because of power outage. If your system is down even for just an hour, it means you cannot book sales and orders, process inventories, and release stocks. Basically, you can’t do anything,” he says.

But one of the hardest hit that a company may take once its IT system down is brought down by disasters is permanent business loss, translated by the loss of customers’ confidence and loyalty to a company’s service.

“Once your business takes long or never recovers from a disaster, your clients will lose confidence in your service, which prompts them to move to more reliable providers. It is impossible to have your clients wait for a few weeks while you fix your system when it is so easy for them to acquire the services of another provider. The loss of business is by far the biggest consequence,” Rocke says.

When acquiring a DRP, a company needs to consider a lot of factors. For one, they have to identify which data will be backed up.

“Some companies may have the perception of saying, ‘If I have 100 servers, do I also need 100 servers in my disaster recovery site?’ I said no. You only select and back up those data that are very critical in running your business,” Fernando explains.

Another important factor that companies have to consider is the location of their disaster recovery (DR) sites. Rocke says that companies need to choose DR sites that are easily accessible.

“For example, if there’s no power in your Makati office, your DR site might be affected by the blackout if it’s in the same city. But the DR site should not be too far either. You must ensure that it is accessible, even to your employees.”

With the announcement from the Pagasa that the rainy season has officially started, Rocke further urges companies to have a DRP. However, he stresses that a DRP is not something that companies should only avail of during the rainy season, as disasters can strike anytime.

“While typhoons typically come during the rainy season, there are disasters like earthquakes and even building fires that can occur anytime. Think of a Disaster Recovery Plan as your business’ life insurance. It’s something that you need to have in order to protect your company from any sudden incident that may have catastrophic consequences on your business,” he says.

Finally, Rocke says that every company, especially the large enterprises, should not downplay what disasters can do to a business.

“When a company is unprepared for disasters then this could simply kill the company. So, make sure that you have a DRP in place to make sure that your business is protected 24/7, 365 days a year.”

According to research firm IDC, though unit shipment declined 11.3 percent quarterly to a total of 3,665 units, the market achieved second highest revenue in the past two years to a value of $23.9 million in Q1 2013 after Q3 2012.

High-end and volume systems were the major streams driving the server market growth. The growth of high-end servers was driven by organic growth from the banking sector, which was enhancing technology infrastructures to meet rising customer banking needs.

IDC further observed that the number of Linux deployments on x86 servers are increasing, with interest predominately from gaming companies, hosting service providers, and telcos.

According to Cynthia Ho, market analyst for enterprise hardware server research at IDC Asia-Pacific, the rise of smartphone adoption and mobile applications are driving more Linux workloads in the Philippines.

Despite the ongoing fragility of western economies, IDC noticed local spending remains a key driver of the server market growth.

Ho added, ”Global companies have yet recovered from budget constraints. We expect spending on technology refresh, business analytics and server virtualization by domestic companies to be the primary catalyst for the Philippines server market.”

Verticals including government, professional services, manufacturing, telco, and banking are the main sectors spending on servers in the Philippines.

Government spending has gradually been realized since the first quarter of 2013, prior to the presidential election.

Professional services inclusive of business process outsourcing (BPO) companies are looking into business analytics applications, as virtual desktop infrastructure (VDI) deployment and automation software are expected to be key spending areas in the Philippines.

Meanwhile, the banking sector continues to increase the number of bank branches and develop mobile commerce services, triggering demand for better IT infrastructures.

Telco players are enhancing network infrastructures and looking into business analytic applications in order to enhance end users experiences.

Ho added, ”IDC sees the rise of smartphone adoption and mobile application and expects the trend towards BYOD to accelerate in the coming future. Service providers are looking to enhance security within the infrastructures, thus fueling the server market growth.”

ADP Philippine GM John Hickey

Its new headquarters is located at the Glorietta 2 Corporate Center in Makati City. The company’s local operations used to be located at the RCBC building at the corner of Ayala and Buendia Avenues.

ADP Philippines, a provider of business processing and cloud-based solutions, and has been in the country since 2010. Its services include payroll, tax, information technology (IT) support, and benefits administration for international clients.

“The Philippines is one of Asia’s fastest-growing economies and it has a robust outsourced services landscape that is continuously exceeding goals and expectations,” ADP Philippines general manager John Hickey said.

“We have seen our talented workforce grow from just five associates in November 2010 to more than 1,200 associates by June of this year. With the positive performance and results that we have experienced here in the Philippines, we anticipate strong continued growth in the country.”

Globally, ADP serves about 600,000 organizations spread across 125 countries, over 80 percent of which are Fortune 500 companies. More than 90 Fortune 100 companies use at least one of ADP’s services.

ADP, itself, is a Fortune 500 organization, ranking 255th in 2013 with nearly $11 billion in revenues in the last fiscal year. The company was recently ranked as number one in the Financial Data Services category of Fortune Magazine’s list of World’s Most Admired Companies for 2013.

In the past decade, the Philippines has successfully carved its niche as one of the world’s top destinations for outsourced service solutions.

According to Department of Budget and Management secretary Florencio Abad, the country’s BPO industry generated more than $13 billion in revenues in 2012 alone — a $2-billion increase from 2011’s recorded $11 billion revenues.

Meanwhile, Tholons, a US-based strategic advisory firm for global outsourcing and investments, ranked the country’s capital city, Manila, as top three in its top 100 list of global outsourcing destinations for 2013.

The Information Technology and Business Processing Association of the Philippines (BPAP) projects revenues from the IT-BPO industry to hit $16 billion by end of 2013 with more than 900,000 full-time employees. Last year, data from IBPAP showed that 493,000 Filipinos were employed as part of the BPO sector.

Hickey said, “We’ve gained ground since starting local operations in 2010 and with our new site, we are poised for bigger things ahead. The Philippine BPO/KPO market is widespread with opportunities for growth and employment.”

ADP’s employer services provide industry-leading solutions to companies including a broad range of human resources solutions. Dealer services, on the other hand, help auto, truck, marine, recreational and heavy equipment vehicle dealers use technology to increase efficiency and reduce operational costs.

“ADP associates are not offered jobs, but careers,” the company’s local chief said. “We put utmost value to the overall well-being and career growth of our employees because they are, after all, our most valuable resource.”

Instead, the moves are really more in line with what the company does best — which is to adopt successful solutions or those that could stand some improvement, and then retool them with the famous Apple stamp to deliver a potentially better user experience, according to research firm IHS.

Credit: IDC

In the first day of its annual conference for developers on June 10, Apple said the new iTunes Radio would be part of an expanded music app that now features free Internet radio service, while a revamped iOS7 would sport fresh design elements and functionalities via a simpler user interface.

The twin moves, on one level, are intended to safeguard ongoing control by Apple of its already tight ecosystem while also maintaining the company’s hold on an increasingly crowded marketplace. In another sense, however, what Apple is doing is simply business as usual.

“Apple’s innovation is usually not with the introduction of new features, but rather comes from the execution and integration of features as part of a whole new experience for users,” said Jack Kent, principal analyst for mobile at IHS.

“This is a point worth remembering, which is something that Apple has done many times in the past,” said Francis Sideco, director for consumer electronics and communications technologies at IHS.

“None of the devices that Apple is celebrated for — the iPhone, iPad or even the iPod — were the first of their kind when they were introduced, but they’ve so thoroughly remade the market since their launch that they’ve become category definers and market leaders of their individual segments.”

In the case of Apple’s new iTunes Radio, the service follows similar offerings from Pandora or Spotify, both of which precede iTunes Radio by several years.

Apple’s key advantage, however, is the ability of its new service to integrate the radio experience with a user’s iTunes library to generate stations based on what a user is listening to at that moment, noted Kent.

Broadcasting iTunes radio

The plan for iTunes Radio also shows the astute thinking underlying Apple’s moves. A free ad-funded service will be accessible for all users, while the service will be available ad-free to customers that subscribe to iTunes Match at $24.99.

Ian Fogg, director for mobile and telecoms at IHS, agrees that the move to provide streaming music on Apple’s part is smart.

“The US personalized radio market is essentially an ad-funded business and has been for years. To launch a free service is a precondition for even being in the game,” said Fogg.

“In addition, bundling the ad-free streaming access with a new iTunes Match feature that personalizes song choices according to a user’s listening history is clever, boosting value for Apple’s existing paid tier.”

In the United States where the market for mobile music is the largest of its kind in the world, revenue for full-track music access subscription is projected to rise this year to $452.7 million, up a remarkable 46 percent from $309.4 million in 2012.

Strong expansion is likewise forecast next year as revenue climbs another 33 percent to $660.6 million. The figures track subscriptions from a mobile phone for music in the form of either personalized radio or those accessed via an on-demand basis.

Overall, the new iTunes Radio service should help to tie some people further into Apple’s ecosystem, Kent believes, and removing the ads should increase the value of the relatively inexpensive iTunes Match.

In this respect, Apple could be said to be catching up to competitors, Kent observed. Nokia already offers a completely ad-free radio service for Windows Phone Lumia devices, while Pandora and others have ad-funded mobile radio.

Mobile OS remade… in Apple’s image

Apple’s newly redesigned user interface can also be interpreted as an acknowledgment by the company that it may have fallen behind in some areas. The new design echoes elements already present in other operating systems like Windows Phone and Google’s Android.

To be sure, there are new features meant to keep current iPhone users engaged and prevent them from straying to the competition.

Among them are a new phone-activation lock to erase data if the iPhone is stolen; a feature called AirDrop to quickly share content with people nearby; an audio element named FaceTime for high-quality calls over a data network; and a Night Mode in Maps for responding to ambient light when using the feature in the dark.

The new iOS7 design is important because Apple can now do updates to iPhones on all carriers at once, said Fogg. Unlike Android devices where updates have to be staggered over a period often extending to months because of the disparate models and various software versions in existence, an iPhone update means existing Apple users benefit at the same time.

App developers also will very quickly have a large base of iOS devices running the new features, and will have even more justification to innovate their own apps quickly than on Android devices when there is a new Android release, Fogg noted.

The iPhone: under attack?

The iPhone continues to maintain a position of strength in the smartphone market, observed Sideco. Despite slipping two-tenths of a percentage point from 2011, the iPhone still controlled a notable 19.1-percent share of the smartphone market.

The iPhone has also enjoyed stronger shipment growth than for the overall smartphone space on average. From 2010 to 2011, for instance, smartphone shipments climbed 65 and 61 percent, respectively.

In comparison, growth in iPhone shipments rose from an already heady 89 percent to an even more extraordinary 93 percent during the same period.

Growth decelerated last year for both the iPhone and the smartphone industry in general, bringing the iPhone’s expansion of 46 percent closer to the industry average of 47 percent, marking the first time that iPhone growth has lagged behind the market and causing a slight decline in iPhone market share.

Apple’s iPhone market share in 2013 is expected to shrink some more, but the retreat is more a function of the rapidly expanding low-end smartphone market, which is primarily enabled by the Android ecosystem.

Even so, the iPhone market can still be considered remarkable in the face of the hundreds of millions of units that the unit has sold over the years, Sideco noted.

Techpoint execs Lara Marie Lua (left) and Cyd Montebon answer questions during a recent press event in Makati City

According to top officials of Techpoint Enterprise, the distributor of Devant in the Philippines, the company is now prepared to diversify its portfolio after seeing its TV brand rack up phenomenal sales in the country.

From a mere 2,500 units of monthly sales in 2008, the company now sells a whopping 10,000 units per month.

Techpoint said the impressive sales record of NextBase, the DVD player brand which the company also distributes in the country, has also given them the confidence to bet that tablets will have the same prospects locally.

Executives said the tablets, which will be branded as “DTab”, will be formally launched this July. Like most tablets today, the touchscreen devices will run on Google’s Android operating system.

James Ng, a Hong Kong expat who serves as general manager of Techpoint, said the Philippines will be the first country to have the Devant-branded tablets.

Ng said the company is also exploring the possibility of going into the mobile phone market with Android-powered units as well. He stressed, however, that this plan requires thorough research since the mobile phone industry is an extremely different arena altogether.

If and when the company does go into the mobile sector, it is unlikely that it will veer away from a key strategy – that is, the manufacture of main chips being performed in Singapore and the assembly of the TV sets being done in China.

The launch of Devant tablets also comes at a time when Techpoint is marking its tenth year in the business. It first hit the jackpot with NextBase when the brand was introduced in 2003. It was followed by Devant, which debuted in the country in 2007.

NextBase’s product range includes Tablet DVD Players (in-car cinema), DVD, HDMI, and Blu-Ray players, and speaker systems. The products under the Devant brand, meanwhile, include portable players with LED monitors, speaker systems, LCD TVs, and LED TVs.