Cloud computing, including all subscription based and pay-per-use models, are intensifying competition as far as the regular license-based software business is concerned in Thailand. This is raising a number of serious questions regarding the future of the local software companies in the country.

Local Firms

In order to survive, these local firms are going to have to adapt to the recurring revenue platforms during this age of subscriptions instead of doing what they normally do and sell licenses with the help of their perpetual licensing models.

Companies even need to adopt emerging technologies such as the IoT (Internet of Things) and large-scale data analytics in order to develop innovative software solutions on-demand, says a couple of leading software experts.

The software industry in the country needs to embrace service models which are software enabled in order to speed up innovation and enable scalable service delivery remotely at a lower cost. This is what Thanachart Numnonda; the executive director of the IMC Institute had to say. The IMC Institute is a Thai owned research and IT training firm.

Software Enabled Services

The software enabled service providers include Uber and Grab, the ride-sharing app makers, Airbnb the online marketplace, and Builk.com, a Thai-owned company which offers construction management software.

Thanachart said that the software industry in Thailand is going to persist with single digit growth in the next few years since cloud-based computing software is going to be taking over the software market.

A survey which was conducted by the IMC Institute back in 2015 showed Thailand’s service and software market was expected to grow by 4.4 percent to 54.8 billion baht by 2016 as compared to only a 1.2 percent growth in 2015. This is helped by the growth in spending as far as emerging technologies are concerned.

The survey had been commissioned by Software Industry Promotion Agency.

Local Market Growth

Thanachart also said that the local market is projected to grow by 4.3 percent in 2017 to 57.2 billion baht.

He said that booming cloud-base services are even affecting the growth of integrators, as businesses have outsourced parts of IT systems to various cloud-based platforms.

The survey even showed that local systems integration service market contracted by 37 percent to 5 billion baht last year as compared with 8 billion during 2014.

Chalermpol Tuchinda, Software Park Thailand’s director, said that big data, as well as analytic products, are now in a phase of high growth as businesses are starting to adopt technologies for enhancing competitiveness and uncovering useful insights for accommodating the increase in the amount of digital information available today.

In order to become competitive, he said that local firms have to improve industry related skills and need to get certifications and standards for products.

In 2015, Thailand was ranked at number 15 out of 98 countries as far as local companies which complied with capability maturity model integration standards were concerned. This is the internationally recognized improvement framework for capability.