Philippine SMEs Still Unaware of How to Benefit from Open Source Technology

Dec. 27, 2006 – Open Source software (OSS) may be gaining popularity in the Philippines, but many small business owners are still unaware of how this technology can impact and improve their businesses.

A majority of the 1,908,893 registered small and medium sized enterprises (SMEs) are still unaware of what open source is or how it can benefit their business. In contrast, industry giants Jollibee Foods Corporation and Mercury Drug Corporation are some examples of large enterprises in the country already making use of open source.

“We believe this situation is ironic because open source software, by its very nature, is affordable. It should be utilized most especially by small businesses in order to make them more competitive,” said Ms. Patricia B. Celis, sales and marketing officer of local open source company GEN Automation Technologies.

The competitiveness of the SME sector in the country, which makes up 99.5% of registered industries nationwide, is commonly believed to be hampered by their lack of knowledge and implementation of technology. This is due mainly to the belief that technology is expensive to acquire and maintain.

For example, commercial software licenses such as Microsoft Exchange 2003 server today have an initial cost of Php 67,900.00. This price allows up to only five licensed computers to connect to the server, with additional computers needing additional licenses in order to be connected. The price covers only the software license cost, and does not include the cost for the hardware or its yearly license maintenance.

In contrast, open source software does not require licenses to be purchased and maintained. The reason behind this is that the source code – program instructions in their original form – is made freely and publicly available for use or modification, unlike proprietary software wherein the source code is generally not made available. The software thus becomes “free”, due to its open nature, making OSS an affordable and practical technology for SMEs to implement in business.

“Open source companies such as GEN Automation can afford to offer corporate servers to small and medium sized companies for as low as Php 4,500.00 per month, when availing of the company’s rental or lease-to-own payment schemes. These affordable servers running on OSS provide benefits for SMEs such as centralization of communication and increased workforce productivity due to faster and easier sharing of information – benefits which small businesses otherwise could not have if they have had to purchase expensive proprietary software licenses,” said Ms. Celis.

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