Thailand’s IT Services Update in 2H2018
Thailand IT Services market’s second half of 2018 recorded value at 47.7 billion baht with the growth rate year-on-year of 9.3% compare with the same period in 2017. It resulted of total spending at 92.3 billion baht in 2018, making Thailand the second biggest country spent on IT Services in ASEAN after Singapore.
The continuous growth of IT Services market in Thailand has several drivers in cross-industries; include new services related to blockchain or cryptocurrencies in financial industry, an increase in investment on development of IoT, robotics, automation and location-based services for logistic management in manufacturing industry, initiatives to leverage on digital technologies to develop the country’s public services and also to improve the citizen’s lives by the public sector e.g. the online facial recognition system implementation plan to improve the work productivity and performance of the Office of Public Sector Anti-Corruption Commission (PACC) by using digital technology to streamline their work process and reduce human errors, to mention a few.
IT Services in general can be divided into 3 primary markets which consists of project-oriented market, managed services market and support services market. The key attributes of these 3 primary markets have in common could be identified as following;
Project-oriented market would have short term contract length, customized offerings, no assets transferred between customer and vendor, and has predefined goal achievement as outcome.
Managed services market would have long term contract length, customized offerings, some degree of asset ownership transferred from customer responsibility to vendor responsibility, and ongoing service level agreement is maintained or optimized would be the expected outcome.
Support services market would have long term contract length, standardized offerings, no assets transferred, and outcome would be the issue is resolved.
1. The overview of project-oriented market in 2H2018
The key drivers of the project-oriented services market in 2H2018 were DX-related (Digital Transformation) initiatives around big data, AI, blockchain, and cloud-based application development. There was also a large sum of investment poured into IT infrastructure development, driven by the smart city initiatives that drove the demand of IT consulting and systems integration services within the transportation and construction industries, while demand for custom application development was driven by demand from the personal and consumer services industry.
Demand for development of AI and blockchain solutions was high in the financial services sector, the sector with the largest IT spending in 2H2018. The adoption of IoT technology also gained significant interest from the manufacturing sector, which drove the growth of the network consulting and integration market in 2H2018.
2. The overview of managed services market in 2H2018
Many organizations are being anchored by both top management and their IT executives to transform digitally, with at least 10%-15% of their annual IT budget allocated to the area of development of innovative solutions. This has led to increase of delegation of routine and repeatable IT tasks to managed service providers, as that would prove to be cheaper than hiring permanent IT talent in their organizations.
The growth of application deployment, especially cloud-based applications in the financial services, retail, personal services, and transportation sectors were the main catalyst of the hosted application management market’s healthy growth. In addition, the launch of new innovative tools for AppDev teams (Application Development) to develop new applications at a faster pace indirectly helped drive the market growth as well.
3. The overview of support services market in 2H2018
The trend of migrating IT infrastructure to on-premise private cloud has become increasingly common among private and public organizations in 2H2018, which drove the demand for upgrade of IT infrastructure. Another large factor for deployment services is the need to digitalize their data and connect data from various sources within the organization to further support and create new revenue stream. This led to the growth of hardware deployment of hardware such as SQL server and simulation systems, and software deployment of security software, and analytics software this cycle.
Most of the new hardware and software deployment contracts are bundled with organization’s staff training courses as well due to the lacking in technology related knowledge.
