Thailand’s software market grew 20.1% year-over-year (YoY) in 1H22, accelerating from 14.5% YoY in 2H21, according to International Data Corporation’s (IDC) Worldwide Semiannual Software Tracker. Thai organizations have faced fierce competition to gain momentum or market share. This forces businesses to rethink their existing processes, focus on increasing efficiency, and respond to personalized customer needs. “Businesses require tools to overcome challenges and survive in an increasingly competitive world. As a result, Thai enterprises are increasingly relying on more affordable, intelligent, and user-friendly software that allows them to make decisions faster, enhance business outcomes, and achieve sustainable competitive advantage.” said Kavisara Korkong, Market Analyst at IDC Thailand.
IDC classifies the software market into 3 main categories, with the highest contribution revenue in 1H22 coming from applications at 13.4 billion baht, up 23.3% YoY, followed by system infrastructure software at 10.4 billion baht, up 17.5% YoY and application development and deployment at 6.4 billion baht, up 18.0% YoY.
Applications market: As communication is the cornerstone of a productive work and remote working is now more widespread, the adoption of technologies, enabling effective collaboration across the business becomes the highest priority on most organizations’ digital transformation agenda. Noticeably, spending on collaborative applications showed the highest growth (43.0% YoY) in 1H22 in Thailand. As new norms change traditional work, IDC anticipates that collaborative applications will continue to grow by double digits, assisting enterprises in their digital transformation. In a collaborative and hybrid work environment, driving employee engagement remains a top priority, as well as the security aspect when storing documents, sharing files, holding meetings, or sending messages internally and externally.
System Infrastructure Software market: As enterprises increasingly rely on applications and IT infrastructure, it is critical to ensure IT availability, enhanced IT performance as well as optimized usage of server-side computing resources. With the number of IT objects grows, it becomes more difficult to ensure that IT systems and services have no potential issues with performance. As low IT performance impacts customer satisfaction, enterprises need the tools to manage systems and services, allowing IT administrators to enhance application performance as well as optimize pricing for service management. Consequently, System and Service Management software showed the highest year-over-year growth of 24.5% in 1H22.
According to IDC’s 2022 Asia/Pacific Software Survey, 90% of Thai organizations have built at least one software-driven product or service that has led to new business opportunities. As Thailand becomes more digitally advanced, cyber risks increases. Businesses are more conscious of cyber threats, as reflected in software spending; the market saw security software spend grew by 22.5% YoY in 1H22. IDC expects to see continuous investment in security in Thailand as attack patterns and cyber threats are always changing and becoming more complex.
Application Development and Deployment market: As more data is collected, Thai organizations start focusing more on efficient data utilization to enhance business outcomes and improve customer experience by understanding consumer behavior and offering customized products and services. Leveraging AI for better data utilization has become crucial for enterprises to simplify decision-making, reduce workload, enhance operational efficiency, and achieve sustainable competitive advantage. Spending on AI platforms saw the highest growth (41.7% YoY) across application development and deployment market in 1H22, indicating increased demand from Thai organizations. IDC expects to see continuous investment in AI in Thailand as well as the creation of new services and innovative products using the power of AI.