Software sector likely to slide amid business shifts

Economy August 08, 2017 01:00

By JIRAPAN BOONNOON
THE NATION

THE THAI SOFTWARE market is expected to take a dip this year. But there will be an effort to boost the use of local software among small and medium-sized enterprises (SMEs).



The market for software will likely achieve Bt48.1 billion, a slide from last year of about 5 per cent, said Thanachart Numnonda, director of IMC institute. He cited the 2017 Thai software market survey conducted by the Digital Economy Promotion Agency (DEPA).

The negative growth in the software market reflects the emergence of a new business model of software services with customer behaviour shifting to embrace software as a service or cloud computing, and software-enabled services.

Positive factors in the sector this year include increased value of the embedded software market due to increased adoption of Internet of Things (IoT) and smart-city projects across the country.

Negative growth and decreasing markets will continue through 2018, reducing value to Bt47.6 billion, the survey also noted.

The 2016 combined values of software development and software services were Bt50.1 billion, comprising Bt37.4 billion for software services, and Bt12.7 billion for packaged software.

The financial sector is the nation’s biggest spender on both software and services, followed by government and tourism sectors. The total software market in 2016 decreased by 4.63 per cent from the Bt52.6 billion spent in 2015. 

Thanachart noted that 2016’s total Bt50.1 billion Thai software market represents Bt46.4 billion from domestic software usage and Bt3.7 billion from software exported to the international market.

Last year was the first time in 10 years that the Thailand software market experienced negative growth.

Three-way strategy

Nuttapon Nimmanpatcharin, president of DEPA, said that the agency would address the revenue dip through three measures. The first is to provide a tax incentive with tax reduction of 200 per cent to encourage SMEs to use legal software. The second approach would encourage software entrepreneurs to reach ISO 29110 certification, with a target of 100 participants by the end of the year.

Finally, an IoT institute will be set up in Chonburi province with an investment of around Bt900 million to promote and create IoT technology that can be marketed. The hope is that software developers and entrepreneurs will develop and adapt their product for IoT technology to improve productivity, efficiency, and competitiveness.

“I think that the three measures will able to leverage and boost the total software market in the country and create potential for the software market as a whole,” said Nuttapon.