TECH SUPPLIER Jun 2019 - Market Presentation - Doc # AP44705519

2H18 Country Report on IT Services — Thailand

By: Prapussorn PechkaewSenior Market Analyst

On-line Presentation

Abstract

This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Thailand from July to December 2018 (2H18). It covers the market size movements and growth trends in each of the macromarkets (i.e., project-oriented services, managed services, and support services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of global and local IT services providers in the market.

The data and insights within this presentation are a part of the "Asia/Pacific Semiannual Services Tracker" research that covers 14 foundation markets across 14 Asia/Pacific countries.

According to the Office of the National Economic and Social Development Board, Thailand's third- and fourth-quarter gross domestic product (GDP) growth rate in 2018 was 3.2% and 3.7% respectively. On the production side, the non-agricultural sector was driven significantly by the manufacturing and tourism-related sectors such as the transportation and hospitality industry, due to the increase of inbound tourists.

Thailand's general elections were held on 24 March 2019; however, the election results are yet to be officially announced as the process of vote counting has not been completed. The government's regulation allows the announcement of the election results to be held within 150 days after the election. Regardless of who emerges as the winner of the elections, it will take time to form a fully functional government. Thus, in the short term, private and public expenditures will be conservative until political stability is achieved. Organizations in Thailand will adopt a wait-and-see approach until the election results are finalized. In the long term, IDC expects a gradual improvement in local businesses' expenditure and foreign investment, which will positively impact the IT services market.

Thailand has a five-year plan for the 2017-2021 period to invest a total of THB 1.5 trillion in the Eastern Economic Corridor (EEC), which is split into three forms of investment method: THB 300 billion purely by the government, THB 500 billion by private investors, and THB 700 billion by public and private co-investment. With the high portion of co-investment, IDC expect the progress of the initiative will be sped up, allowing more digital innovation to be embedded into the overall action plans and involve a wide variety of IT service providers.

The smart city initiative in Thailand currently involves seven pilot cities, namely Phuket, Khon Kaen, Chiang Mai, Chonburi, Rayong, Chachengsao, and Bangkok. Some key projects that will help support digital transformation and digital economy initiatives include the City Data Platform, which was implemented in Phuket, Khon Kaen, and Chiang Mai, leveraging on digital technology to connect data from CCTV for criminal tracking purposes; connect data from internet of things (IoT) sensors for disaster monitoring purpose; connect data from Wi-Fi users to understand the customer preference of tourists; and to analyze behaviors and logistic systems. IoT, cloud, and big data have played key roles in facilitating smart city initiatives, which drove the growth of IT consulting, hardware and software deployment, custom application development, and IT outsourcing services in those cities.

The banking, financial services and insurance (BFSI) sector remains as the key driver of IT services spending in Thailand, driven by demand for application development, big data analytics, blockchain and chatbot adoption, cybersecurity solution deployment and upgrades, and systems integration services. This demand was driven by banks that are transforming their operating process that engage with customers such as lending process, money transfer, epayment and personalized products and services. Furthermore, demand was driven by the adoption of advanced platforms and applications, in addition to the requirement of connecting data with the core banking system to create a holistic and enhanced customer experience.


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