'Change to service basis or lose' - Software Park boss
Thailand's software industry has been warned that within three to five years, it will be challenged once again by changes in technology that will demand a transformation from product-based to service-based business.
There is a big chance that software houses that are not aware of the looming paradigm shift will lose out in the new game, according to the president of Software Park Thailand's Executive Board, Manoo Ordeedolchest.
Manoo said businesses had already begun transforming to a service-based economy in which they focused on revenue from selling services rather than selling products. Within three to five years, "a big change" will come to the software industry, demanding that all businesses make the shift.
He said two main kinds of service would play important roles in the "next economic era": smart services - or services that come along with products - and innovative pure services.
"In both areas, software will play an important role in creating and delivering services from providers to customers," Manoo said.
The move to a service-based economy is a global trend that is expected to have a distinct impact on Thai businesses and the software industry within five years. Its arrival will impact the entire software-development paradigm. Therefore, software houses must catch up by making themselves familiar with the new technologies and adopting a service-business mindset, Manoo said.
The change in mindset involves switching from their old reliance on working systems to service systems. Instead of learning the working processes of a business in order to design and develop software to enhance and increase its productivity, software houses will have to learn more about service systems. Certain types of services have unique systems differing from other services, and require different types of software, such as database systems, Web services and service-oriented architecture (SOA).
"SOA is the foundation for the service-based era," Manoo said. "There are also several other technologies that are expected to play important roles in the service-based era, included mash-up technology, Web 2.0, Web-based technology, the Internet and cloud-computing technology. Thai software houses must understand these technologies in order to use them to develop software for the new era, in which the function of software is to deliver services."
He said the new business paradigm, its technologies and the mindset required to succeed, all took time to learn and understand. If Thai software companies are not already aware of these trends, they are likely to lose out, especially when Asean becomes a single market in 2015. At that time, it is possible that market share will be belong to software houses in neighbouring countries.
Manoo said most Thai software houses still relied on old technologies based on client or server, rather than moving to the new Web-services platform, which was the foundation of the services-based era. This is because most customers of software houses remain unaware of, or have not yet moved to, a service basis for their information technology operations. This is a key issue, and the government must promote the service-based software concept and educate Thai businesses to be aware of it, he said.
Recently, the National Electronics and Computer Technology Centre (Nectec) joined the government and private-sector organisations to establish an interest group called "Smart Services", to research and develop innovative services aimed at four key industries: tourism, agriculture, education and healthcare.
"Thailand has these four potential industries that are expected to play important roles in the new era of a service-based economy. The government should play host to the encouragement of research and development in innovative services across sectors, by educating both the real business sector and the software industry and promoting research and development related to services," Manoo said.
Currently, a lot of technologies are available, and software houses can simply pick them up, including SOA as the key architecture, Web-platforms and choices of Web-based language such as Ruby. There are also many choices of open-source software applications, including content management systems (CMS), business intelligence (BI), reporting and protocol and message query, from which software houses can develop software to operate in a service-based economy.
Manoo said that as well as open-source software, wireless broadband and social networking technology would be key driving factors of a service-based economy as they encouraged and facilitated "co-creation" between service providers and service users.
In developed counties, about 80 per cent of gross domestic product (GDP) comes from services and only 20 per cent from products. By contrast, in developing countries like Thailand, only 40 per cent of GDP comes from service-based businesses.
