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ArcusIT Delivers Cloud in the Philippines
Experienced Management Team Sets a Vision for Leadership

ArcusIT is a startup company delivering cloud computing to the Philippines, with a management team that's had deep global IT experience.

The company bills itself as "the first Philippine-based Cloud infrastructure service provider to deliver world-class, enterprise-grade cloud-computing solutions designed to meet the unique requirements of Philippine businesses. The company serves as an extension to IT organizations by providing Infrastructure-as-a-Service (such as cloud hosting and storage) and Software-as-a-Service solutions."

I moderated a cloud computing conference in Manila a few months ago, with ArcusIT Managing Director and CTO Jojo Colina on one of the panels. Jojo spent 20-some years in the US, founding an ISP & application server business along the way, as well as building one of the largest data-collection facilities in the US.

Company President & CEO Jason Lim achieved significant business success at a very young age, and now "lights the company beacon" as he says after putting in many years in top management and leadership positions in the industry.

So I figured an interview with these two executives about cloud computing in the Philippines in general -- and what they're doing in particular -- would offer up some great insights. Here's how the interview went:

You started ArcusIT just this year. What in the Philippine market caused you to see this opportunity?

Jason Lim: It all started with a germ of an idea.  When I shared the idea of cloud computing with my partners, I didn't have a business plan or a feasibility study.  I just shared what cloud computing can do for our current business which is selling IT hardware and services, how it will help in automating our business.

I thought that if this can help our small company, think of how many small or medium or large companies can enjoy the benefits of cloud computing.  When we looked around the market, we do not see anyone providing such service locally. We have to look outside the PHL to acquire such services, but this is not ideal.  

We wanted someone to talk to, who can help us understand more, help us migrate into the Cloud and someone who I can trust our systems to.  Hence ArcusIT was born. ArcusIT started out for me as just another business, but knowing what I know now, ArcusIT is not just a business, it is now an advocacy.  I now know that ArcusIT can make a difference in how PHL companies do their business, I now know that I can help these companies become globally competitive, and I now know that this can help the PHL economy to grow and improve people's lives.

Jojo Colina: We saw the Philippines as a market that needed cloud computing. The recent typhoons and resulting floods have shown how businesses and local government agencies can suddenly be underwater and lose all their data. The advantages of cloud computing can be realized by organizations of all sizes without the traditional capital expense and supply chain challenges presented by traditional IT infrastructure.

It allows any organization to focus on its core business instead of the tedious parts of the IT infrastructure. The key is in getting the message out and having working services to sell.

How fast do you think Cloud Computing will grow in the Philippines, do you see the customer base evolving, and how much of this market do you intend to have? Do you concentrate solely on Philippine business, or do you see your company (and the country) becoming a destination for out-of-country cloud customers?

Jojo: There are political, regulatory and bandwidth challenges that need to be addressed before the Philippines can become a destination for out-of-country cloud customers for distributing content in the region. That being said, the Philippines is the largest consumer of English language content in Asia whether locally or foreign produced. I believe that this should make a locally hosted cloud very attractive to anyone who wants to distribute content to the Philippines. 

Filipinos have already embraced cloud, at least in their personal lives. The Philippines is #5 in Facebook usage and #1 in YouTube uploads (per capita in the world). Most people have a Yahoo mail account and use Yahoo messenger. This awareness has to be extended to the business use of cloud both in the private and the public sectors.

(And now) the government is becoming more aware of cloud computing as key for the transformation of public sector computing. This is beginning to happen with government agencies increasingly considering cloud-based applications.  

However, this also requires changes in the traditional project planning and procurement process. This further requires a locally hosted cloud for data sovereignty reasons.

Jason: How fast the market will grow will depend on how fast we can address all the "real" challenges of moving into the cloud.  This has to be an effort of the "Cloud Ecosystem," from cloud service providers, Telcos, government, IT practitioners, software developers, IT hardware providers and media.

It all starts with education, once people know and understand, all the other challenges can easily be overcome. For example, if the PHL government can understand and appreciate how cloud computing can help local businesses therefore helping the PHL economy, then they can find ways of addressing regulatory issues, create incentives, and provide basic infrastructure to support cloud.

I am happy to see that more companies are now getting into the cloud computing business, and they are helping in educating the market.  This is a big boost to PHL cloud computing initiative, and this was not present first half of the year.  If we are able to get more participants into the "Cloud Ecosystem,"  believe the Cloud adoption rate will increase exponentially in the next 2 years. And of course, ArcusIT being in the forefront of this initiative, we aim to be a major player in the PHL market.

Could you give our readers an overview of your services? Is there a "typical" customer for your services?

Jason: We provide a wide range of services, covering IaaS and SaaS.  With IaaS, we provide Cloud servers, Cloud Storage and Cloud Surveillance. And for SaaS, we have partnered with Microsoft to provide Mail Xchange, Sharepoint, CRM and Lync.  We also partnered with Rosetta Group for our Cloud ERP and Payroll. We also provide an Enterprise class, military grade Cloud BackUp solution.  Customers who avail of our services are typically businesses with high IT dependencies to manage their day-to-day operations. They range from small businesses to large companies.

How much of your business is really IaaS/Cloud as opposed to basic hosting? How much of your client base buys "metered Cloud" instead of flat-fee services?

Jason: We have envisioned ArcusIT to be a true cloud service provider, all of our IaaS customers buys our metered service.  And IaaS provides more than 90% of our business today.  However, in the next few months, we will see huge take up of our Microsoft services, we are gaining lots of traction in our partnership with Microsoft.  I foresee that IaaS and SaaS will have a 50-50 split of our business by next year.

What clients/success stories can you talk about at this point?

We have a number of good stories on how cloud computing was able to help our clients, but the most memorable one is the story with a small drug store chain. This company has over 50 branches of drug stores scattered all over the country, and they are all connected centrally to their server in their head office in Quezon City (in Metro Manila).

When their server broke down, they were told by their supplier that it will take more than 30 days to be serviced since the parts will need to be shipped in country. This customer talked to us and availed of our Cloud Server and Storage, and within hours their whole system was up again.  Now that their server has been repaired, they have opted to retain our services to serve as a backup system.  

What should the PHL government be doing to encourage cloud?

Jason: The USA has its Cloud First Policy, India has subsidized cloud for SMEs, Singapore has tax incentives for cloud services, and South Korea has a vision of being the world's go-to-cloud outsourcing by 2015.  I am hoping that the Philippine government will (soon) have a cloud computing initiative in whatever form or shape.

Cloud computing is a great equalizer, and I believe the PHL, being comprised of mostly micro, small and medium businesses (note: 99.6% of registered companies, according to the government's Department of Trade & Industry) can benefit a lot from the cloud.  I strongly believe, for PHL to be relevant in the global marketplace, we should help these companies compete globally.  And business automation is a critical component of making this happen.  With cloud computing, these small and medium companies can now have automation that they can afford.

Can you talk a bit about your confidence in ArcusIT's physical infrastructure?

Jojo: My confidence in the infrastructure comes from our commitment to continuously giving our clients our best. This means continuously managing, monitoring and correcting our physical infrastructure to ensure it capable of delivering the requirements of our clients.

Cloud computing is about continually learning how to make services better for your clients. Yes, I still believe that we are well protected from a single external event that will take down the data center completely. However, just as the big guys have learned this year, internal issues exist that can take an infrastructure down. 

Amazon's data outage has taught us how we should handle failover. We are continuously looking at our own infrastructure to determine where the gaps are and correcting them. We have had some of our own learning as well. We changed our storage strategy when we realized that there existed a possibility of silent data corruption spreading to mirrored volumes. We have reduced our reliance on internet exchanges to carry traffic and have bought paid transit from major telcos which are covered by more stringent SLA's among others. We are always in a process of improvement.

About Roger Strukhoff
Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

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