Growing Importance of Cloud and Data Centers in the Philippines

Given the Philippines’ impressive digital potential, cloud and data centers will play an essential role in maximizing the country’s full capability.

August 2021 , by YCPS Marketing & Communication Group

Driven by challenges brought about by the pandemic, as well as the ongoing trend of technological advancement, digital transformation is occurring across a number of businesses and industries alike. While taking steps to implement digitally-based solutions is widely beneficial for the parties involved, important consideration must be placed on the essential role of infrastructure. Without access to proper facilities which ensure effective digital transformation, loss of investment would surely occur.  

Specifically, in the Philippines, plans that aim to address the rapidly developing country’s increasing need for adequate cloud and data centers are currently in motion. As centralized facilities that house computer systems and related components (i.e., storage, data, servers, etc.), the move to establish improved cloud and data centers will be essential in the overall enhancement of technology and digital processes within the archipelago.    

Importance of Improving Philippine Data Centers 
According to We Are Social and Hootsuite’s most recent iteration of their Digital 2021 report, the Philippines currently has the highest internet usage average in the world at 10 hours and 56 minutes. Further, a 2020 survey by Epson indicated that a majority of the country’s small and medium-sized enterprises (SMEs) identified digital solutions’ importance to improving their operations. While these reports reflect that the Philippines is an avid champion for technology, this trend also implies an eventual demand to improve the country’s current technological infrastructure.  

In YCP Soldiance’s white paper Can Indonesia Achieve ‘100 Smart Cities’ by 2045? research shows that several forms of technology—cloud and data services included—are essential in creating smart cities that present several promising benefits, such as improved economy, quality of life, accessibility, etc. While Indonesia is a primary example of cloud and data services’ potential when maximized, the application of such technology within smart cities can be applied to developing countries around the world.  

As such, the importance of establishing satisfactory Philippine cloud and data centers cannot be understated, especially when considering the advantageous opportunities that it presents to various sectors. Improving infrastructure in this specific regard may very well be the first step to unlocking one’s full digital potential and helping move urban centers towards becoming smart cities. 

Increase in Domestic Development  
In June, Alibaba Cloud (a subsidiary of multinational tech giant Alibaba Group) announced plans to build their first data center in the Philippines, according to the Philippine News Agency. Additionally, Philippine telecommunication provider Converge ICT Solutions also expressed a firm commitment to building a data center in Cebu, a project that is reportedly worth PHP 1 billion. As evidenced by the increase in domestic development, major companies have seemingly taken note of the Philippines’ ripe potential for cloud and data center development.  

Furthermore, the allocation of funds by private companies for such services in the Philippines is expected to grow in the coming years. As per data and analytics company GlobalData’s latest report, statistics revealed that enterprise cloud spending within the country is forecasted to reach 2.6 billion USD by 2024, which is a drastic jump when compared to the 1.8 billion USD reportedly spent in 2020. 

Considering that major companies are at the forefront of cloud and data center development within the Philippines and that businesses in key industries are willing to support such movement, expect a surge of activity and investment with the Philippine cloud and data center market. 

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