Random musings about the Philippine’s Internet Industry

Recently, I received some questions from a two UP students (Rachel Mahinay and Melodie Tumambing) who wanted to profile some IT personalities in the Philippines. Their questions were quite interesting, so I thought I’d share them with you:

Who was Joel Disini in his highschool/college days? Did you see yourself becoming popular, and controversial, like now?

I was a Computer Science/Electrical Engineering undergrad at Caltech. I went to Philippine Science for High School.

Yes, I’m a bit surprised at the controversy the PH Domain has created. Perhaps if our servers were regularly crashing, or if we had treated some customers badly, or if something was wrong with our service, I would be better able to understand it.

Perhaps part of the problem is that the PH domain is viewed in some quarters as a license to print money. Since the Philippines is a rather poor country, there is some envy associated with this. But if people took the time to study the matter, they’d find that running a Domain Registry is a tough business! There are many ccTLDs out there who have totally lost out to COM. Globally, COM outsells ccTLDs 2:1. Because Verisign has sheer economies of scale, they are a formidable competitor. We at DotPH have to spend a lot of time innovating, advertising our brand, and thinking of ways to promote PH over COM. In some ways, because the Filipino has less pride in his country than say, a Frenchman or an Englishman, promoting .PH is more difficult than promoting .FR or .UK.

Another factor is that IT news of global interest is quite rare. Other than the Love Bug Virus, the only other IT News that’ll get the Philippines mentioned in CNN would be the PH Domain. When the people who first criticized us found their names plastered all over the Wall Street Journal, they didn’t let up! In a perverse way, journalists who do stories on the PH Domain are more likely to see their stories carried by the international wire services, hence the disproportionate interest in the PH Domain.How did your career in the Internet industry begin?

My first job in Silicon Valley was to do Macintosh Networking. This was pretty much hot stuff in those days. The Mac was very cool and development was rapid. I would work late into the night learning everything there was to learn about the Mac. In those days, Macintosh programmers viewed themselves as the elite of Silicon Valley. (Windows was a total joke) People around me were getting rich quitting their jobs and working in their garage. The product that I developed did quite well; it won a MacUser award, and made my employer very rich. So I figured I’d do the same and quit my job to work on some code.

You used to work in Silicon Valley, right? What was your work there? Why did you decide to come back here in the Philippines?

I didn’t have much money, and I figured that I could hire some programmers in the Philippines and teach everythying I knew. The cost of R&D in the Philippines was one-tenth of what it was in the US.

What was the driving force that pushed you to take the responsibility of representing the dotPh domain?

It was obvious in 1989 that the concept of interconnected networks would win out. It looked like a cool concept. I was surprised, in fact,that it took so long for the Internet to take off. It was only when the world wide web emerged that things began to move.

What do you think will be the future of the Philippine Internet industry?

The Internet Industry will largely be dominated by Prepaid Vendors in Home market, and DSL in the corporate. market.

The early innovators in Internet Service will be driven out of the ISP market into activities like:

- Callcenters. This is a tremendous market for the Philippines and I think it will continue to grow for the next five years. Callcenter employees are paid P14T/month. The cost of bandwidth for a VoIP call is 1c/min or about P6T/month per employee. So that’s a cost of P20T/seat per month. In the US, the cost to hire an operator to answer the phone and say “good morning AT&T, how may I help you” is roughly $5T/month (including taxes and overhead). Our only real competition here are the third-world British Commonwealth countries - eg India - whose English is more British than American. So it’s a tremendous opportunity.

- Webdevelopment. Right now the market is mostly freelancers doing static pages: Flash, HTML and Graphics. This has the potential to explode dramatically once Webdesigners are able to communicate with their clientele cheaply over VoIP. Pretty soon, you’ll see a lot of Perl/PHP/ASP development being subcontracted here. The beauty with this kind of development is that the overseas client will be able to monitor progress by viewing the website-in-progress. And if it isn’t as good as he expected, he can simply place a free VoIP call to the local company to talk about color schemes, response times, grammar, javascript etc.

- Back Office operations - programming, tech support, customer support, application/web hosting, and accounting. The Philippines makes an intriguing choice for an International Company to base it’s Back Office operations. Good programmers, good English speakers, good Webdesigners/artists, glut of office space, and a good base of Linux administrators. There are some problems (electricity, Internet bandwidth is too expensive), but in general, the drawbacks are minor. HQ can communicate with its Back Office via VoIP and Videoconferencing; It can pay its employees via Online Banking. It can monitor programming work by logging into a server. I’ve tried communicating with my staff by videoconference over DSL and it is a very viable proposition that very few seem to be aware of.

- video editing/musical scoring.

- Perhaps SMS/MMS Development, if the Telcos spread the wealth (revenue share is currently at 20-30%, where 70-80% go to Globe/Smart and the remainder goes to the developer), or if it becomes easy for the developer community to tap foreign telcos. The revenue sharing abroad is the reverse, with the Telcos keeping about 20-30% of the revenue.

- M-commerce is an intriguing space to watch. The next logical step for text-a-load is m-commerce. That is, if I want to sell a product, I just ask a user to “text-a-load” to me. I should then be able to redeem the load from the Telco. Expect merchants to line up in droves w/ Globe or Smart for the right to sell their merchandise by ‘Text’. (another Filipino first)

In your 199 interview with WIRED! Philippines you mentioned that your greatest dream for the industry was to use the Internet as an effective tool for a clean and honest government. Has this vision changed since then?

Recently, when I travelled to Europe, I relied largely on tripadvisor.com to figure out which Hotel was best to stay in Paris, Rome, etc. Tripadvisor is great as it relies entirely on user feedback. Users who’ve stayed at a hotel will normally rant, rave or just give feedback on the quality of the mattresses, the proximity to the metro/subway, the noise level, quality of the food, the level of cleanliness, the politeness of the hotel staff, etc. etc. This is information that you can’t glean from a Hotel’s website , and is far more comprehensive than something you can find in Lonely Planet, Frommer’s or “Let’s Go Europe”. I found this terribly enabling. For the first time, users are able to “get back” at bad hotels who’ve ripped them off, as well as praise the good guys who do an honest job and charge an honest rate. In the process, the public gets to know which hotels are great to stay in, and which are the ones to avoid.

So we (at the PH Domain Foundation) are currently working on funding an Open-Source application that will allow users to give feedback on our local police. If you happen to get pulled over by a cop for some bogus infraction like “swerving”, you’ll soon be able to go to our site and post the cop’s name, the location where the incident took place, and details about the incident. Likewise, you’ll also be able to post about positive things - eg if a policeman happens to help you catch a thief, you’ll want to commend him in a public way. If enough people were to post their experiences online, and to rank these experiences (eg +5 for a police officer who answered the call of duty, -2 for an officer that gave you a bogus traffic ticket, -5 for a policeman who was drunk and getting into fights, etc.), we’ll be able to know which precincts are the most corrupt, and which ones are the best run. And we’ll have the data to prove it! This is a far better feedback mechanism than anything the government will be able to come up with.

Of course, we may not be able to clean up the police force with this effort, but it’s worth trying and seeing what the reaction will be. If it works, the same concept (and source code) can be applied to the BIR, the local Municipal Governments, etc.

My belief is that we’ll see an honest and clean government in our lifetime. In an information-driven society, it becomes harder and harder for the crooks to hide.