IF WE do things right, Exist president and chief executive officer Jerry Rapes said, the opportunity is really big.
From $9 billion and 500,000 direct jobs in 2010, the information technology-business process outsourcing (IT-BPO) sector in the Philippines is targeting $25 billion in revenues and 1.3 million workers by 2016.
Rapes is optimistic about hitting the target.
“I think Filipinos are as good as anybody in the world,” he said in his Cebu office at the Asiatown IT Park. Local developers are “very good and trainable and although there are areas for improvement, they are technically sound.”
Filipino developers are good at collaborating and have an excellent command of English. “The US market is still the biggest IT market. When you get a project from the US, the Filipinos don’t need translators, they can communicate directly with the American client, partners and engineers,” Rapes said.
But for the industry to thrive, it must have regular supply of skilled workers.
“I think it’s more important for the schools to teach really basic requirements like very deep understanding of design, problem-solving skills, analytical skills, and developing really good learning attitude. Because when graduates have the aptitude and the willingness to learn, it doesn’t matter what language you are building software in. What is important is they know the basics,” he said.
“If you look at it, the really good developers can actually shift technologies. Of course it takes a while. It takes a little bit of getting used to. Diskarte ba (street smarts), it spells the difference between a senior developer and a junior one,” he said.
Rapes said local developers also need to get more exposure to projects “from beginning to end.”
“We’re handling bits and pieces. A lot of the companies are doing maintenance. The experience is different from a developer’s and technologist’s point of view. So it’s really about exposing them to bigger applications, bigger projects, globally-used or certified projects,” he said.
Rapes said there is also a need for stronger industry-academe collaboration.
“If you hire from the academe and you are pirating teachers, effectively industry is competing with the academe. I don’t think that’s a scalable way. Industry should contribute heavily to the academe. That we make sure we keep teachers, we send them to graduate schools, we provide funds for research, we sponsor professorial chairs or else you will lose your teachers.”
Decline in compsci enrolment
The Philippines is having a hard time keeping its skilled developers, Rapes warned.
“(The threat is) not so much the US because even if the US is hiring, it’s not easy getting a working visa. Singapore is so easy, it’s like five days. If you’re a good developer, they’ll hire you right away and in five days you have a working visa. It’s faster than you can resign,” he said.
He said the “really large decline” in computer science enrolment in Philippine universities is worrisome. He blamed the decline on the unclear career path for IT students.
“It is very clear for nursing students, if I take up nursing and I’m good at it and I graduate, I pass CGFNS, I take my whole family to the States. It’s very clear that that’s the goal,” he said. “For people in computer science and related IT courses, sometimes it’s not clear where they are going.”
One organization that played a key role in bridging industry requirement and academic programs is the Cebu Educational Development Foundation for Information Technology (CEDF-IT), where Rapes sits as vice president of the board of trustees.
“I think CEDF-IT has played a very critical role and successfully played that role in getting the academe and industry together, especially in the very early years when things were starting up in Cebu.”
Reassess CEDF-IT’s role
But he said the organization should reassess its role, grow even faster, raise funds and focus on human capital development to better serve the industry. The industry and academe now collaborate regularly even without CEDF-IT, he said.
“I think the academe is very collaborative, they’re very open. I’m not saying the Manila guys are snobs. The Cebu guys want to work together more. My experience is they tend to follow me up more than I follow them up, which is for me amazing because it shows their dedication beyond their academic load,” he said.
Cebu officials are also helpful of industry. He praised the approach of Cebu City Vice Mayor Joy Young in funding scholars to help the IT industry.
“It’s okay to fund scholars, any major city will do that but the pronouncement of Vice Mayor Young was really good when he said, ‘Tell us what you need. I’m not an IT professional. I won’t know what you need. But if you tell me what you need, I can go and try to make it happen.'” That, Rapes said, “is the kind of government support that’s necessary and that’s what I see a lot here in Cebu. The government actually goes out of its way to do that.”
Cebu, he said, has a lot of potential. When Exist decided to expand five years ago, it decided to go to Cebu after encountering difficulty hiring people in Manila.
“Initially, we thought we were going to build a quality assurance or testing facility or tech support in Cebu only to realize there were a lot of developers here. So we started hiring more developers.”
Cebu’s central location is an advantage, he said. “When you build a facility in Cebu like what we did, you’re actually not only hiring from Cebu, you’re hiring from the Visayas and Mindanao. You can probably bring somebody from Davao to Cebu but it’s probably more difficult to bring somebody from Davao to Manila,” he said.
Exist, as a company, builds on open source software—applications released on a license that encourages sharing, collaboration and building on the works of others.
The company, founded by renowned tech entrepreneur Winston Damarillo, has roots in open source integrator Gluecode, which was bought by IBM in 2005.
Building on open source
“There is definitely business in open source,” he said. “We don’t just get the software and give it to people. We use open source components, build on top of it and then make money from it.”
“A lot of companies are probably using open source…they’re adopters of open source, they don’t contribute and extend open source software. That’s what we do. We invest in building with the community,” he said.
When asked on the business case for cloud computing, the term for utility computing done over the Internet, he said its potential is “really, really big and it’s growing really, really fast” and the numbers “are staggering.”
“People now understand the concept of utilities. Winston always uses this example: Before when you wanted to have lighting in your office you’d have to run a generator and then if your generator went down, brownout ka. If you only wanted to switch on one light, you still had to run the generator the whole time. Now, you don’t do that.”
With cloud computing, “you don’t have to run the gen set or, in this case, the server. when you want to run just one app, maybe you just get one server plus its other requirements like a database.”
Cloud computing also reduces obsolescence because companies no longer have to deal with upgrades since their cloud service provider does it for them. It also reduces a company’s reliance on hiring and building an internal IT department.
Resilience of cloud computing
He said the earthquake and tsunami in Japan provided a testament to the resilience of cloud computing.
“The telephone went down, cellphone went down, power went down. But the Internet in Japan never went down. It’s very amazing. What happened in Japan is a really strong testament that if you’re running stuff in the cloud, you need not worry. Because when the data centers in Japan failed, they just shifted all their traffic to the US. They built to run that way. All you need is to have the Internet,” he said.
He said going to the cloud makes business sense. Cyclical business processes like processing taxes and payroll make sense being moved to the cloud.
Rapes said there is an opportunity for cloud computing in the Philippines. “Most of the industries here are growing and everyone is leveraging on technology to be able to scale, to be able to do things faster, to be more efficient, to be less costly. And that’s certainly within the cloud model.”
But he cautions companies, “Everybody wants to go to the cloud; the problem is it’s not a very easy transition.”
“You have to know what it is. You can’t just go and buy the next cloud solution even if you had the money. I really suggest that you roll up your sleeves, get your hands dirty and test it. Use a public cloud. See how it can help you grow and scale your organization then you start investing,” he said.
Rapes said the cloud democratizes access to technology, which is a great thing for startups.
“Before, if you want to build stuff, you need a staging server, a development server, you need to buy all these servers. Now, you don’t have to do it. You can rent it. And pay only for what you need and what you use,” he said.
In Cebu, “there’s a really strong collaboration between the industry, academe and even government to improve the ecosystem for IT and IT industries. And because of that, there are more opportunities.”
Venture capitalists have also started to take notice of Cebu-based start-ups.
“Now is a really good time to build a start-up.”