Software industry grew 27.6%

Monday, October 31, 2011

THE local software development industry grew 27.60 percent in export revenues and employment by the end of 2010 despite a global economic downturn that started in 2008, according to a report released by service and investment advisory firm Tholons.

Tholons said export revenues of Philippine software services reached $725 million last year, higher than the $568 million recorded in 2009.

Have something to report? Tell us in text, photos or videos.

The company said 57 percent of revenues came from the United States, followed by the United Kingdom with 25 percent. Canada and Japan contributed five percent and Europe accounted for four percent. Other emerging markets for the country are Australia, Middle East and Asia Pacific region.

The Tholons-PSIA Software Skills Inventory Report is a study that was commissioned by the Philippine Software Industry Association (PSIA) and funded by the former Commission on Information and Communications Technology (CICT).

PSIA president Nora Terrado said the Tholons study provided PSIA the information on which areas of improvement the organization should focus on.

Global hub

“The industry was able to survive the entire course of the global economic crisis, which pushed many industries to the brink. The PSIA remains steadfast in its goal to make the Philippines a global hub for outsourcing services, particularly on software development and services,” Terrado said in a statement.

Tholons reported that employment went up by 27.60 percent in 2010, as the number of full-time employees hit 44,962 from the 35,300 recorded in 2008 and 2009, when hiring remained flat. The leading revenue sources of the local industry for foreign markets are application maintenance, at 18.32 percent, followed by software testing, at 12.56 percent, and custom application development, at 11.54 percent.

Product engineering or actual software product development accounted for 7.01 percent of the local industry, closely followed by system infrastructure support service at 6.75 percent.

The local software industry serves various sectors such as banking, insurance and financial institutions, which accounted for 17.61 percent of total revenues last year.

It is followed by information and communications technology, medical, health care, and bio-engineering, manufacturing, energy, wholesale and retail, media, government, consulting services and logistics.

Terrado said the data in the study helped measure the industry’s performance, particularly in servicing foreign markets. She said it will help the organization implement programs like manpower skills development, academic partnerships, infrastructure upgrades and marketing campaigns for PSIA partners.

Government help

Terrado said more government assistance is needed to fill in the gaps in the sector, especially in building partnerships among various ICT stakeholders.

She also encouraged players in the software industry and outsourcing services sector to participate in PSIA’s programs in improving the local software development and services sector and promoting it globally.

Tholons surveyed for the study 40 software development companies in the Philippines with 170,000 full-time employees.