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Organisations in Thailand spent 20.1% more on software in the first half of last year compared with the same period in 2021, underscoring the growing digitisation efforts in Southeast Asia’s second-largest economy.
According to IDC, the growth in software spending in Thailand was driven by organisations seeking to gain momentum or market share by rethinking existing processes and driving efficiency.
“Businesses require tools to overcome challenges and survive in an increasingly competitive world,” said Kavisara Korkong, market analyst at IDC Thailand. “As a result, Thai enterprises are increasingly relying on more affordable, intelligent and user-friendly software that allows them to make decisions faster, enhance business outcomes, and achieve sustainable competitive advantage.”
Most of Thailand’s software spending went into applications, where revenues grew to 13.4bn baht (US$408.4m), up 23.3% year on year. This was followed by system infrastructure software at 10.4bn baht, up 17.5%, and application development and deployment at 6.4bn baht, up 18%.
Like their counterparts elsewhere, Thai organisations spent more on collaboration software to support their remote work initiatives, with spending growing by 43% in the first half of 2022. As new norms change traditional work, IDC expects spending on collaboration software to continue to grow by double digits, assisting enterprises in their digital transformation.
“In a collaborative and hybrid work environment, driving employee engagement remains a top priority, as well as the security aspect, when storing documents, sharing files, holding meetings, or sending messages internally and externally,” IDC noted.
Thai businesses have become more conscious of cyber threats, with spending on cyber security software growing by 22.5% year on year. IDC expects to see continuous investment in cyber security in Thailand as attack patterns and cyber threats become more complex.
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Underpinning application investments is system infrastructure software, which is critical to ensure IT availability, enhanced IT performance as well as to optimise usage of server-side computing resources. In Thailand, spending on system and service management software recorded the highest year-on-year growth of 24.5% in the first half of 2022.
With 90% of Thai organisations having built at least one software-driven product or service that brought in new business opportunities, spending on application development and deployment has risen as well.
This includes using artificial intelligence (AI) technologies to improve data utilisation, simplify decision-making, reduce workloads, enhance operational efficiency and achieve a sustainable competitive advantage.
According to IDC, spending on AI platforms saw the highest growth (41.7%) in Thailand’s application development and deployment market in the first half of 2022. It expects to see more AI investments in Thailand, including new services and innovative products powered by AI.
Software and cloud providers have been expanding their footprint in Thailand to capitalise on the country’s growing software industry.
In November 2022, FPT Software, a Vietnam IT service provider, opened a new office in Bangkok in a bid to target the top 30 IT companies in Thailand. It plans to grow its local workforce to 500 IT engineers in three years.
Cloud giant Amazon Web Services is also opening a Bangkok cloud region and plans to invest $5bn in Thailand over 15 years.