Philippines ready for its own Silicon Valley — tech CEO

WHEN Mazhar Durrani, CEO of a Los Angeles-based tech start-up, was looking for markets to expand his business in Southeast Asia, the Philippines was nowhere on his list.

“Like any foreigner who had very little knowledge about the Philippines, I had this impression that it may not be a good place to do business. For one, there’s the issue of safety,” he told ����ý.

Mr. Durrani, who has more than 30 years of IT experience under his belt, is the CEO of Virtalus, a two-year old tech start-up that offers scalable IT infrastructure services.

Virtalus, according to its Web site, offers “hyperconverged” IT infrastructure on demand, serving enterprises of all sizes and promising to deploy its services faster and significantly cheaper than the typical buy-and-build model. It’s based on a utility model, where customers have full control of how they manage or use the technology, Mr. Durrani explained.

“Unlike traditional storage and data centers, where companies need to invest in people and expensive infrastructure, what we’re offering is a simplified solution that allows our client to set up their own private cloud, where they pay only for what they use,” he said, adding that hyperconverged systems are 40% cheaper than traditional data center deployments.

While Virtalus is headquartered in Los Angeles, Mr. Durrani had set his sights on growing his start-up’s customer base overseas because “the US market is already overcrowded with far too competitive players.”

Within two years, Virtalus has established presence in Mexico, Finland, Malaysia and just recently, the Philippines.

The idea of coming to the country came about in 2016 when Mr. Durrani met with Mexico’s ambassador to the Philippines, Julio Camarena. Mr. Durrani said the ambassador, whom he regards as a long-time friend, “insisted” that he visit the Philippines and consider setting up shop in the country.

“I told him I wasn’t interested but he was very persistent,” he said. Without setting expectations, he accepted the envoy’s invitation and flew to Manila in August last year. What was originally planned as a one-week business trip “to see what the market looks like” became a three-week stay. Mr. Durrani said presenting his pitch to large corporations — and getting them to sign up as his clients in the process — made him realize the huge potential for his start-up to grow in the country. His Philippine clients include Black Cell Technology, Inc., the IT arm of Calata Corp., and Solid Group, Inc. the parent company of local smartphone brands myPhone and Brown.

“Companies [in the Philippines] are looking for opportunity to expand and they’re willing to take a chance and invest in technologies that enable them to do that,” he said.

After his trip, he flew back to Los Angeles then immediately came back to Manila. He spent the rest of year in the country, meeting with potential partners and distributors.

Mr. Durrani said he was impressed by the innovations that his Philippine clients, most of them from the tech industry, have introduced. One of them is Solid Group, Inc.’s Brown and Proud Movement, of which Virtalus is one of the technology partners. The concept of the Brown and Proud movement is to roll out smartphones, in this case a new line called Brown, that are pre-installed with an exclusive app that offers its members to earn money.

“The Philippines is a dangerous country in a sense that its people don’t know just how good they are,” Mr. Durrani said, referring not only to homegrown tech startups but also the country’s capable IT workforce that could entice foreign tech companies to consider relocating here.

“[The Philippines] has everything [a tech investor is looking for]: you have an English-speaking work force, the people are friendly, the culture is fantastic, and it’s easy to do business here. I won’t be surprised it becomes Asia’s version of Silicon Valley,” he said.

At the moment, Mr. Durrani said Virtalus is eyeing a Nasdaq listing to raise funding as he expands the start-up’s reach overseas and as the market for hyperconverged integrated systems (HCIS) continues to grow.

He seems to be on the right track. According to IT consulting firm Gartner, the market for HCIS will be worth $5 billion by 2019. It even calls HCIS the world’s fastest growing market for integrated IT systems and it predicts hyperconverged systems will become mainstream by the end of the decade.

“[Hyperconverged systems] can be likened to an iPhone. When you own an iPhone, or any smartphone, you don’t really need to worry about issues such as managing storage or customizing its features; whatever you need can be solved by downloading apps. That’s what hyperconverged systems can do to businesses, they simplify the process of managing IT infrastructure, enabling them to expand without making huge investments,” he said.   

As for his next move, Mr. Durrani said he will wait and see if his business in the Philippines grows big enough that he would feel the need to set up an office here. He would occasionally fly out to meet with potential clients in other key cities in Southeast Asia but somehow he keeps coming back to Manila. “There’s a good market here,” he said. “[The Philippines] is a great place. I feel like I will be here for a very long time.” — MBG