IDC Thailand: Revival of Thai ICT Market
will Rely on Third Platform Technologies
Bangkok, November 27, 2014 – Thailand’s ICT Market will see a higher rate of growth in 2015 compared to a year ago, but could still grow more if the market accelerates the adoption of Third Platform technologies of Mobility, Cloud, Big Data analytics, Social Business.
This was revealed in the annual Predictions briefing by IDC Research Thailand where the firm presented the top 10 trends expected to impact business and technology decisions in the Thai market in 2015.
Michael Araneta, country manager for IDC Research Thailand states that ICT investments will grow to a projected 10.6%, a clear sign that the market recovering from lackluster growth in IT spending in the past year. In terms of annual growth rates, telecom equipment will lead the market, thanks to spending by consumers on smartphones. Other high-growth categories of spending include IT Services, certain categories of software, and storage.
Araneta continues, “The market is ready for the Third Platform technologies, but the intensity of adoption will depend on the practicality of use cases, the availability of skills, and good vendor support. Cost is not so much a factor in considering new technologies, especially because the Third Platform technologies could be cost-effective when deployed effectively.”
IDC Research Thailand’s top ten predictions for 2015 are the following:
1. Thailand IT Spending Will Rebound to 10.6% Annual Growth
Pent-up demand for IT will result in IT spending growth of 10.6% (year-on-year), despite ongoing uncertainties in the macroeconomic environment. In terms of annual growth rates, telecom equipment will lead the market, thanks to spending by consumers on smartphones. Other high-growth categories of spending include IT Services (support services and operations management), software (particularly those for Cloud and virtualization), and storage.
2. Data Service Will Drive Telecom Spending Growth to 14%
IDC expects telecom services spending will be strong, seen in a forecasted annual growth of 14.5% in 2015. This mini-revival of spending will happen with or without roll out of 4G in Thailand.
Data services is seen as a revenue booster, with higher usage of fiber broadband and increasing demand for international IP VPN driving growth in spending for fixed data services, and an upsurge in mobile data usage supporting growth in the mobile services. The demand for international data connectivity because of business expansion into neighboring countries will lead to robust spending on international fixed data services especially, IP VPN.
Amid highly-charged competition in telecom services, service providers will launch bundling of services that have so far been rarely seen in Thailand. This will include social media packages and freemium applications.
3. Half of Top 100 Companies Will Embrace “Mobile-first” Strategies
IDC foresees that smartphone penetration rate in Thailand will reach 50% in 2015, representing a moderate increase in smartphone penetration. Thai businesses will however realize the opportunity to engage with an increasingly mobile-savvy population, and will roll out mobile-first strategies for customer engagement: mobile-adaptive websites, new payment methods, and new mobile points of sale, and more social network integration. Mobile-first will be the strategy from at least 50% of Thailand’s top 100 companies.
4. Omni-Channel Will Transform Tech Buying Behavior and the Media Industry
Omni-channel, which is defined as the integration between offline and online channels, plus the deployment of analytics to channel systems, will force changes to the technology-buying behavior of Thai companies, giving more decision-making authority to the Chief Marketing Officer (CMO).
Omni-channel will also introduce the need for sophisticated technology skills within an unlikely industry: media agencies. Instead of relying on mass media campaigns and traditional go-to-market, these media companies will see growth in their media communications consulting business, as they accelerate the use of advanced analytics to target a customer segment of one.
5. Security Incidents Will Trigger Concerns, but Thai Enterprise Will Be Slow to Move Beyond Mobile Device Management (MDM)
More data leakages will prompt MDM adoption among Thai enterprises as MDM is commonly implemented as the first step to secure mobile devices. The perceived lack of ROI, however, will result in the lack of strategy and will consequently hinder organizations’ ability to secure more than just devices.
6. Internet of Things (IoT) Will Excite Thai Businesses, Yet Adoption Will Be Limited
The possibilities for IoT will continue to excite Thai consumers and enterprises. Solutions and platforms supporting IoT will be assessed in 2015, but will be considered as not ready for primetime. Impediments include lack of business use cases, low supply of local skills, and security concerns. IDC believes Thailand’s IoT ecosystem will gradually develop, with early adoption in consumer wearables.
7. Early Big Data Adopters Will Reboot Master Plans
Companies in telecommunications, retail and banking will continue to roll out initiatives in Big Data, venturing into newly emerged solutions in data virtualization, data visualization, and even into the use of Hadoop. However, they will be confronted with the fundamental issues of the accuracy, reliability and currency of their internal data. To progress into their Big Data journey, early Big Data adopters will need to revise their capabilities in data creation and data collection.
8. Third Platform ERP Will Emerge as a New Battleground
ERP vendors will refresh their solutions by using Third Platform technologies such as Cloud, Social, Mobility and Big Data Analytics, and integrating them well into ERP-enabled business processes. “Third Platform ERP” will help Thai enterprises gain competitive advantage through reduced cost, improved productivity, and enhanced customer experience. New functionalities on top of traditional ERP systems will result in an uptick in IT spending in the manufacturing sector in the next three years, beginning in 2015.
9. Global Cloud Vendors Will Drive Confidence in Local Cloud Ecosystem Frameworks
The entry of global Cloud providers into Thailand will strengthen the confidence of Thai companies in the areas of compliance, security, and service level agreements (SLAs). The growth of Cloud will be steady, with early adopters that are mostly utilizing private Cloud currently to adopt more usage of public Cloud, thus leading to a slew of hybrid Cloud implementations. IDC anticipates good growth in Cloud Computing Professional Services, primarily project-based services that assist end users with planning and implementing a Cloud services strategy.
10. Thai Banks Will Make Up for Lost Time in Cloud Computing
Thai financial services institutions are embracing Cloud much more willingly than their peers in the Asia/Pacific region, and are in the process setting benchmarks and best practices for Cloud adoption. After ensuring regulatory approval on their strategies for customer data privacy, data protection and security, banks are putting near-mission-critical workloads into Cloud infrastructure. Workloads of note go beyond email, as rules management, CRM, and even core banking transactions will now be consumed through Cloud. As a result, Thailand’s banking industry will see a reduction of operating costs to an unprecedented average of 40% operating cost-to-income in 2015.
IDC Thailand cites several sectors: banking and insurance, retail, and manufacturing as growth leaders in IT budgets, but also in the adoption of technology innovations. This reduces the Thai ICT market’s traditional reliance on the public sector to drive growth.
Araneta concludes, “We are impressed by a series of initiatives that indicate that the industry is willing to explore new technologies, and hopefully reduce operating costs, improve productivity, and enhance customer experience. What is more remarkable is that many of these initiatives allow enterprises to manage and deliver IT in new ways: Mobile-First, Omni-channel, Next-Generation security, Internet-of-Things, and variants of Cloud Computing.”
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