The time is ripe for Philippine-based vendors and partners to team up with hyperscale cloud providers, as the country’s cloud market races towards a major surge in spending.
Enterprise spending on cloud services in the Philippines is expected grow from US$1.8 billion in 2020 to US$2.6 billion in 2024, according to industry analysis firm GlobalData.
New data by the firm suggests that the cloud boom goes well beyond the enterprise segment, with cloud-based service usage soaring in the consumer segment and streaming mobile video users, which are set to grow from 53 million in 2020 to 80 million in 2024.
Moreover, mobile social media users will grow from 75 million to 80 million over the same period. This is in addition to broad industry trends both driving and supporting cloud usage in the country, including digital transformation and growing international connectivity.
International connectivity can be an important factor in building a local cloud-hub, given that it can offer redundant connectivity options to global data centres to ensure resilience of operations. And providers in the Philippines have been making good progress on this front.
“Operators across the country have built more than a dozen carrier neutral data centres and increasing international carriage capacity to and from the nation by developing undersea cable projects with global partners,” GlobalData technology senior analyst Malcolm Rogers said.
For Rogers, the Philippines in the future may prove to be a valuable cloud region as the country’s growing digital economy is driving increased cloud usage.
“For example, the Philippines is one of the fastest IT business process outsourcing (IT-BPO) markets in the region with BPO companies using cloud-based services to support their operations,” he said.
Against this backdrop, it should come as little surprise that the world’s leading hyperscale cloud providers, specifically Amazon Web Services (AWS), Microsoft Azure and Google Cloud, are actively working to drive adoption of their services within the market through local partners.
Indeed, each hyperscale provider is building partner ecosystems within the Philippines and targeting specific verticals such as technology, telecoms and financial services for their infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS) offerings, according to GlobalData.
Moreover, the big hyperscale providers are also expanding their partnerships to include colocation providers in a bid to push their edge services, such as AWS Outposts and Azure Edge Zones. From GlobalData’s perspective, this approach gives the likes of AWS, Microsoft and Google Cloud the chance to assess demand in the country before investing in building a local cloud region.
For example, Azure offers its full-stack HCI deployable on enterprise data centres through Dell Philippines.
Beyond the traditional data centre segment of the market, Philippine-based providers have an opportunity to build relationships with the major hyperscale providers around multi-access edge compute (MEC), GlobalData noted.
According to the analyst firm, the Philippines is one of the earlier countries in the region to launch commercial 5G services with coverage expanding fast across the country.
Already, the big public cloud providers are working with telco carriers to develop carrier edge specific version of their own cloud environments, meaning there's already plenty of action for local players.
“Even though none of the major cloud providers have announced plans to build out public cloud regions within the Philippines, the market has plenty of activity in the hyperscale space and as technologies like 5G edge computing evolve and mature there is plenty of opportunity for telecoms and data centre players to grow partnerships with the leading hyperscalers,” Rogers said.