The pandemic has indeed accelerated digital transformation across the globe including that in the Philippines. With organizations implementing work-from-home, and consumers driving the rise of e-commerce and the widespread use of digital wallets, companies and organizations are accelerating their migration to digital applications and platforms.
In fact, survey commissioned by Epson in mid-2020 revealed that nearly three-quarters (74%) of the small and medium enterprises have embarked on the digital transformation journey that mainly focused on the marketing and sales as well as customer interaction and servicing parts of their businesses.
A more recent survey commissioned by Alibaba Cloud revealed that a majority (94%) of Philippine businesses view cloud-based technology solutions as an important factor in mitigating the impact of the pandemic. Furthermore, with cloud technologies being an enabler of digital transformations, 88% of Philippine businesses stated they are now more supportive of using cloud-based technology solutions to grow their businesses as compared to before COVID-19. This puts the Philippines among the most supportive of the markets surveyed.
In addition, an increasing number of Philippine enterprises are turning to cloud-based technology solutions to navigate the new conditions with more than half (51%) of businesses reporting they have adopted more cloud-based technology solutions.
But despite these, the Philippines cloud readiness ranking in the Asia Pacific region has tumbled two positions from 9th in 2018 to 11th in 2020, with a cloud readiness index (CRI) of 55.3, according to the 2020 report of the Asian Cloud Computing Association.The CRI ranked 14 countries in Asia Pacific against parameters
, including international connectivity, power sustainability, data center risk and cybersecurity.
As a benchmark, the CRI of India and Indonesia are 56.7 and 55, respectively. Hong Kong (81.9), Singapore (81.5), and New Zealand (77.1) remained on the top three spots.
“No single factor can explain this movement, but the sharp decline of scores across several parameters certainly plays a large part (international connectivity, sustainable energy, data center risk, cybersecurity, privacy, and freedom of information)”, the report further states about the Philippines’ decline in ranking. Overall, cloud regulation was the Philippines’ strongest segment, while cloud security was the weakest, according to the report. But this is poised to change.
In a landmark move, Alibaba Cloud will be launching its first data center in the Philippines by the end of this year as part of an aggressive US$1-billion plan to expand its presence across Southeast Asia. The objective is to extend the reach of its services including elastic compute, databases, security, machine learning, and data analytics.
With a data center in the Philippines, Filipino businesses can now advance their cloud migrations and enjoy lower latency at a lower cost. Financial services institutions and public sector organizations will also have access Alibaba Cloud’s high-performance cloud services while keeping their data within the country.
This will surely improve the CRI ranking of the Philippines in the coming years, given that one of the key strengths of this data center is the adherence to international security standards and global best practices on security and compliance.
It is an opportune time that Alibaba Cloud is investing heavily in the country to bring its technology, expertise, and experience to the Philippines. This supports the government’s “cloud-first policy” and helps drive digital transformation in the country.
The author is CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines (FINEX). He is a Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University.