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New Year Special Features '99

  • Philippines Needs 500,000 Subscribers to Make E-Commerce Viable
  • January 11, 1999 (MANILA) -- Electronic commerce is still in its infancy stage in the Philippines.
    There are currently an estimated 200,000 Internet subscribers in the country, and at least 500,00 subscribers are needed to make e-commerce viable, industry sources said.

    Virgil Pedro, IBM Philippines' country software manager for e-business solutions, said the increase of the Internet subscriber base to 500,000 will signal the growth of e-commerce in the country. He said the number of subscribers is expected to hit 900,000 by the year 2002.

    IBM Philippines' software group recently launched what it called an "aggressive campaign" to further market its software business, valued at US$13 billion worldwide. The campaign will be tied with its e-business strategy, which focuses on computing in a networked environment, including the Internet.

    The software strategy focuses on key products for database management, Web development, systems management and communications and groupware. IBM aims to use Universal Database (UDB), Lotus Domino, Tivoli and Lotus Notes products to help companies integrate their existing applications with e-business applications, Pedro said.

    He expects the demand for systems management and networking solutions in particular to increase. However, he declined to disclose how much sales the company hopes to generate from the software business.

    IBM is banking on its strength in the financial and technology sectors in mounting its new campaign. The company said its software "runs virtually on any hardware platform" and is price-competitive.

    Pedro said the growing installed base of IBM customers is becoming more and more interested in e-business or e-commerce. He noted, though, that e-commerce is still in the early stages in the Philippines.

    To further develop the market, IBM is helping its customers implement some pilot projects such as the online ordering system of San Miguel Corp. for draft beer. The project was launched last month as the first pilot project of the E-Commerce Promotion Council, which is composed of government and private sector representatives and headed by the Department of Trade and Industry.

    Collaboration between government agencies and businesses is essential to achieve the full potential of Internet commerce or e-commerce, according to a recent report by market research company Forrester Research Inc.

    The report, entitled "The Commerce Threshold," estimates that global Internet commerce sales will reach US$3.2 trillion in 2003 if this collaboration occurs and only US$1.8 trillion if businesses and governments cannot work together.

    "More than US$1 trillion in global Internet commerce depends on how effectively businesses and governments can work together on shared goals," said Michael Putnam, analyst in Forrester's Business Trade & Technology Strategies service.

    The Internet has experienced the fastest adoption of any technology in history, bringing millions of people online in a few short years. The report says Internet commerce will also be accepted quickly, following the "S-curve" of technology diffusion.

    "At the beginning of this S-curve is the commerce threshold -- the window of opportunity in a country in which the public and private sectors must act to participate fully in the subsequent hypergrowth of iCommerce. The commerce threshold is a critical period because firms and governments that miss this opportunity will have to work much harder, spending more with lower returns, to get on the iCommerce power curve," Forrester said.

    (Margarita Roa, Asia BizTech Correspondent)

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    Updated: Fri Jan 8 15:19:00 1999 PDT