IDC sees ‘DX economy’ achieving almost macroeconomic scale in 3-4 years; market forecast to grow 3.9 per cent this year
IDC, the global information-technology market research and analysis firm, expects IT spending in Thailand this year to come in at around Bt400 billion, then increase 3.7 per cent to Bt415 billion in 2017.
Year-on-year revenue growth is forecast to be 5.5 per cent in 2020, resulting in a market valued at Bt500 billion.
Thailand will attract higher IT spending due to the digital-transformation (DX) economy next year, said IDC, which also announced its top 10 predictions driving expenditure in 2017 and beyond.
Jarit Sidhu, research manager at IDC Thailand, said IT spending of Bt400 billion this year represented growth of 3.9 per cent, compared with the nation’s expected economic growth of 3.2 per cent.
Spending on mobile devices accounts for Bt224 billion of the forecast, followed by IT services at Bt78 billion, infrastructure at Bt62 billion, and enterprise software at Bt25 billion.
The government digital-transformation policy, which will help drive the country towards “Thailand 4.0”, cloud services and platforms, and the transformation of the legacy system into digital transformation for the private sector are major factors behind IT spending growth this year, he said.
Moreover, banking, healthcare and manufacturing are the main sectors driving higher IT spending in the Kingdom, since businesses will try to utilise IT and innovation to support consumer behaviour and adopt their legacy system into digital transformation, so that they are able to connect with their customers and provide new products and services to support new customer experiences, he added.
Predicted IT revenue of Bt415 billion next year comprises Bt230 billion for devices, followed by IT services (Bt85 billion), infrastructure (Bt62.5 billion) and enterprise software (Bt37.5 billion).
As to IDC’s top 10 technology predictions for Thailand for 2017 and beyond, the company highlights that digital transformation (DX) will attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global economy.
It calls this the dawn of the “DX economy”. In this new economy, enterprises will be measured by their ability to hit and exceed a whole new set of demanding performance benchmarks enabled by cloud, mobility, cognitive/artificial intelligence (AI), the Internet of Things (IoT), augmented reality/virtual reality (AR/VR), and the digital transformations fuelled by these technologies.
Michael Araneta, country manager of IDC Thailand, said the prediction was for massive shifts in enterprises’ demand for technology as they use it to transform the way they develop products, engage with customers and run their businesses.
Top 10 tech predictions
The country manager set out IDC’s top 10 technology predictions for Thailand in 2017 and beyond and making the biggest impact on organisations in the country, as follows:
1 Dawn of the DX economy: By 2020, some 30 per cent of the top 500 Thai enterprises will see the majority of their business depend on their ability to create digitally enhanced products, services and experiences.
By 2020, DX will shift to an entirely different scale – a macroeconomic scale – as many companies generate more than half of their business from digitally transformed offerings, operations, and supplier, distribution and customer networks.
In effect, every growing enterprise will become a “digital native” and the government’s push toward “Thailand 4.0” will be reshaped in the process.
2 Digital revenue: By 2019, some 25 per cent of IT projects will create new digital services and revenue streams that monetise data.
In the DX era, information transformation is one of the key factors for success. Information transformation is the focused approach to extracting and developing the value and utility of information relative to customers, markets, transactions, services, products, physical assets and business experiences. Data becomes true digital capital. The monetisation of data will drive the need for an enterprise-wide information architecture and maturity in analytics.
3 Digitalised support: By 2018, some 60 per cent of customer-support interactions will be digitalised and occur in online communities.
Customer support and service has become a part of brand experience rather than just a service. With an increasing proportion of the Thai population, reaching 40 million this year, actively using social media, IDC expects more organisations to interact with customers through social and online communities.
Online customer support helps solve customer problems, but it also improves brand image.
Also in the near future, more organisations will use IT to integrate existing customer services and support systems, like integrating pre-built connectors, mining the community for insight to customer behaviour, and proactively solving any emerging issues.
4 Immersive interfaces gaining traction: In 2018, some 30 per cent of consumer-facing top-100 Thai enterprises will experiment with AR/VR as part of their marketing efforts.
Interfaces are an essential gateway to customer engagement, and are currently evolving faster than many have anticipated. Over the next three to four years – through augmented and virtual reality and advances in integrating all senses, notably voice, with the digital world – Thailand will see more of the digital world interfaced with the real world, people immersed into the digital world, and greatly intensified individual engagement in the DX economy. By 2020, the “coolest” mobile and Web experiences of today will seem very boring. Consequently, marketers around the country will have to be more innovative and leverage AR/VR content to find new means to engage with customers.
5 Industry growth: In 2017, connected vehicles, insurance telematics, personal wellness and smart buildings will be the four most prevalent IoT use cases across Thailand, accounting for Bt7 billion in spending.
IDC forecasts that IoT investment will reach Bt7 billion next year with various investment trends, attitude, and use-case adoption that will be strongly driven by different business structures and scenarios, regulation and innovation levels. The connected-vehicles use case will take centre stage, as heralded by innovation from a concentration of players from specific sectors, namely automotive manufacturing, IT players and utilities.
Insurance telematics will continue its growth, slowly becoming the new normal for players in the sector, while personal wellness will be an emerging use case in the coming years, with devices that will enhance their connectivity and analytics features to the next level. Finally, smart buildings will capture a great level of investment in Thailand, boosted by pending legislation favouring adoption and deployment of supporting technologies.
6 Connected vehicles: By 2019, some 25 per cent of model-year vehicles will report their own health, request service calls, identify design improvements, and validate warranty claims. Vehicles have had the ability to provide information about their health through telematics to varying degrees for some time, but the increasing use of sensors and telematics is enabling a new level of capability for connected vehicles.
The rise of “3rd platform” technologies – mobility, cloud and big-data analytics – as well as innovation accelerators like IoT and cognitive systems, have all contributed to making autonomic features in a connected vehicle possible and identifying problems predictively.
7 Patient engagement: In 2017, patient engagement across the life science/healthcare ecosystem will jump from passive to active.
Access to smart phones and tablets has become commonplace in Thailand – with the country reaching 73 per cent penetration by the end of next year. The life science and healthcare industries have recognised this foundational change in the way that consumers, through apps, interact with their environment and seek to extend consumer engagement into their health engagement.
8 Multi-cloud: More than 55 per cent of enterprise-IT organisations will commit to multi-cloud architectures by 2020, driving up the rate and pace of change in IT organisations. Thai enterprises are migrating from traditional IT to cloud platforms, which have been commonly ranked as the most important technology gaining pace across the Kingdom.
The deployment of cloud technology has already impacted Thai businesses not only in terms of cost benefits, but also in operational efficiency, quick deployment of functionalities, and scalability.
9 Pay-TV overhaul: In 2018, over-the-top (OTT) linear TV subscriber growth will drive a traditional pay-TV overhaul via cloud migration.
Next year will be pivotal year or video infrastructure and enabling technology solutions. IDC expects incumbent pay-TV providers to compete more aggressively with the evolution of “TV everywhere” multiscreen video applications, and to continue to execute on multiscreen strategies not only with TV-everywhere extensions of traditional services, but also by launching new OTT-only services.
10 Cognitive cyber-security: By 2019, more than 30 per cent of enterprise cyber-security environments in Thailand will use cognitive/AI technologies to assist humans in dealing with the vastly increasing scale and complexity of cyber-threats.
Since cyber-security is an analytics-heavy discipline, the industry will look into advanced analytics and cognitive for analysis of threat behaviours.
In closing, IDC predicts that the “4th platform” is already on the horizon.