Some sectors will still see double-digit growth rates this year,
By: Sasiwimon Boonruang
Published: 11/03/2009 at 12:00 AM
Thailand's ICT market is forecast to grow by 5.2% this year, the lowest growth rate for 10 years, according to the market research by both the public and private sectors in a report entitled Thailand ICT Market 2008 and Outlook 2009.
Industry experts suggested that businesses should increase their use of Web technology and that small companies enter into partnerships with larger companies in order to survive the present situation.
The declining growth of the IT industry has led the private sector to overhaul its operations and business model. Manoo Ordeedolchest, chairman of the ICT policy committee at Sripatum University and former Sipa director, suggested the business pay more attention to open source and Web 2.0 technology, and forming alliances.
"They should apply Web technology as an efficient tool to keep costs down," he said, noting that small companies should partner with big companies and specialise in niche areas.
While manufacturing and retail were challenging sectors during an economic crisis, Oracle Asean regional managing director Natasak Rodjanapiches pointed out that the government, education, healthcare and utility markets were strong in this region.
Transport was still good, while telecoms was a mix, with some countries still growing such as Indonesia and the Philippines, he said.
Natasak stated that logistics and HR would be boom areas and there would be a trend to shared services, business process outsourcing and e-learning, all of which could cut costs. Consumer behaviour has changed, and people are using the Web more, and e-commerce would grow sharply, he said.
Wealth Management System CEO Somkiat Chinthammit, who provides financial and consulting services, locally and internationally, suggested that companies should select the right business model that fits their culture. They should also be sure of their "identity" and "positioning", because the global market is entering an era of "specialisation" and they needed to make themselves recognised.
Collaboration and specialisation were most important for small- and medium-sized companies, so that they can work with others and find new customers.
According to the ICT market survey, the overall ICT market in 2008 was around 54.2 billion baht, increasing by 8.3% over 2007 and expected to grow at a rate of 5.2% this year, with a total value of 57 billion baht. ICT spending was mainly in communications, around 70% of total ICT market, followed by computer hardware and software, with market shares of 14% and 12% respectively. The value of the whole IT market (hardware, software, computer services and data communication equipment) last year was around 22.3 billion baht, growing by 11.6% over the previous year and it is predicted to rise by 6% this year.
ICT market survey project adviser Jumrud Sawangsamud noted that computer services tended to enjoy more market share, with an increase from 10.7% in 2007 to 11.2% in 2008 and 12% in 2009, while hardware and software were gradually shrinking. "Such a phenomenon reconciles with the global trend for services to take a more important role in the economy," he said.
In 2008, the domestic and small office/home office sectors accounted for around 52.5% of ICT spending, around 284 billion baht, of which some 81% was in communications, while the government and enterprise sectors together accounted for around 47.5% of the market, or 257 billion baht, of which the spending was mainly was in communications (56%) and software (21%).
Computer hardware sales increased 11% in 2008, to a total value of 75.7 billion baht, of which 66% was from PCs (desktops, notebooks and mini-notebooks). However, the hardware market is forecast to grow by only 0.4% this year.
Jumrud noted that 2008 was the first year that the number of notebooks sold was equivalent to desktop sales, and this year notebook would surpass desktops. Last year, mini-notebooks were very popular, increasing from 10,000 units in 2007 to 80,000 units last year.
The shrinking volume of CRT monitor sales continued, and it is expected that CRT would disappear from the market by mid-2009 as manufacturers focus on LCD technology.
A total of 1,355,000 printers shipped in 2008, and showed a slight reduction over the 1,359,000 units shipped in 2007. However, multi-function devices, both of inkjet and laser, received a warm welcome as the market grew by 15% last year, and it is predicted that they will keep a 15% growth rate in 2009.
The study showed that the external data storage market in 2008 was valued at 3.36 billion baht, a 3% increase over 2007, and more than 55% of the market was from enterprise storage.
The positive factors for the growth of the hardware market in 2008 were: IT became a critical factor for consumers and businesses; a low PC penetration rate; a pricing war; technology vendors launched new products for more specialised markets; the strong value of the baht; cheaper Internet access; more widespread Wi-Fi. Meanwhile, political uncertainty, the economic downturn and inflation were negative factors.
Jumrud noted that the new government, mega-projects, growing IT awareness of the private sector, new technologies such as 3G and WiMAX, increased adoption of netbooks and PDA phones, as well as lower oil prices would all be positive factors for the hardware market this year. However, he said the financial crisis and economic downturn would have more impact from now on.
Jumrud noted that the "sun rise" technologies in 2009 would be green IT, virtualisation, cloud computing, Software as a Service (SaaS), data deduplication, 3G and WiMAX, OLED monitor, 32 nanometre chips, convergence technology and wireless POS.
Based on the market survey, computer software would grow by 5% this year, the lowest growth rate in a decade. Enterprise software, mainly packaged software, has over 70% of the enterprise market. The growth of mobile application would be primarily from entertainment applications, around 66% of the total mobile application business. 3G and new applications development will have an impact on the market value of mobile applications.
In addition, embedded software such as RFID and sensor technology would enjoy a high growth in this year, around 15%, because their possible application in a wide range of electronic devices.
The sectors that will spend highly on software included banking, finance and telecoms, whereas the manufacturing, industry, property, tourism, retail and wholesale sectors would delay spending. Open source software and SaaS would take on important roles due to the economic slump, and could help many organisations realise cost savings.
In computer services, outsourcing enjoyed the highest growth, 24% in 2008, with a value of 4.08 billion baht and was an alternative for organisation as they want to control their IT investment in the current uncertain conditions.
The value of the comms market in 2008 was around 379.2 billion baht, and comprised of services (266 billion baht) and equipment (134 billion baht). This is estimated to grow to around 400 billion baht this year.
The IT and ICT Market Outlook 2009 report was a collaboration between the Software Industry Promotion Agency, the National Electronics and Computer Technology Centre, the Association of Thai ICT Industry, the Association of Thai Software Industry, Software Park, the Thai Software Export Promotion Association, the Thai Embedded System Association and the Association of Thai Computer Manufacturers.