Many foreign software firms established offices in Thailand this year to capitalise on the country’s continuing digital transformation and to serve the demand of local enterprises.
The country also attracted large foreign data centre and cloud service providers from the US, Japan and China over the past two years.
COME ONE, COME ALL
Among the newcomers is Adobe Inc, an American multinational producer of creative design tools and document management software. Its Thai office opened in February this year, aiming to cash in on the growth of the country’s digital and creative economy.
According to Simon Dale, vice-president and managing director of Southeast Asia and Korea at Adobe, with the company’s Singapore office having served the Southeast Asia region for
21 years, the opening of the Thailand office underscores Adobe’s commitment to its customers and partners in the region.
Thailand is Adobe’s second-largest market in terms of revenue in Southeast Asia, Mr Dale said.
Global technology firm Salesforce continued its expansion in Thailand, setting up a representative office in the country in July 2021 before upgrading it to a full office in March this year.
Having established a presence in Singapore initially, Salesforce chose Thailand for its second office in Asean.
Thailand is a high-growth market as the country is accelerating its digital transformation, said Amit Suxena, vice-president for Asean at Salesforce.
The value of Thailand’s digital economy could reach US$57 billion by 2025, with $79.5 billion in economic value generated by digital transformation by 2030, he said.
Elad Natanson, co-founder of app discovery platform Appnext, said the opening of its Thailand office last year represented a strategic growth move for the platform.
Appnext’s Thailand office is its 13th international office and fifth in Asia.
Gibu Mathew, vice-president for Asia-Pacific at Zoho Corp, an India-based software business, said Zoho plans to open an office in Thailand in the second half of this year in response to rising demand among businesses to digitally transform their organisations.
Ng Aik Hock, Dassault Systèmes’s director for cities and public services in Asia-Pacific South, recently told the Bangkok Post the France-based 3D software design firm expects to open an office in Thailand by the second half of this year to capitalise on the high potential of electric vehicles and smart cities in the country.
Somchai Sittichaisrichart, managing director of SiS Distribution, said Vietnamese companies are setting up businesses in Thailand to provide software development outsourcing services.
These firms have offered to send their technical developers to work with local customers on software development, he said.
INFRASTRUCTURE RESILIENCY
Suthikorn Kingkaew, an advisor to Kasem Bundit University’s research institute, said the establishment of offices in Thailand by multinational firms makes it easier for them to run businesses in alignment with the country’s Digital Platform Act and Personal Data Protection law.
Prapussorn Pechkaew, research manager for IDC Thailand, told the Bangkok Post most of the country’s major organisations have made digital infrastructure resiliency their top priority to enable them to deal with uncertainties, ranging from geopolitical tensions to supply chain disruptions.
The need for infrastructure resiliency is driving demand for third-party services such as those provided by data centre and cloud service providers to advance organisations’ operational efficiency and agility, Ms Prapussorn said.
IDC forecasts Thailand’s data centre service market to grow at a compound annual growth rate (CAGR) of 10.5% from 2018-30.
The co-location of enterprises’ servers at third-party data centres is expected to post a CAGR of 8.3% during the same period, according to the IDC Worldwide Semiannual Services Tracker - Thailand report.
Thailand appeals to multinational firms expanding into Southeast Asia because of its strategic location for setting up data centres, as well as its strong infrastructure, high redundancy for energy and power supply, 5G service, government support for the national digital economy, and high digital consumer rates.
Kavisara Korkong, a market analyst at IDC Thailand, said many organisations in Thailand are increasingly reliant on digital technologies such as cloud computing, big data analytics, the Internet of Things and artificial intelligence to overcome business challenges.
This shift drives demand for software tools to enhance business agility and strengthen operations, she said.
According to the IDC Worldwide Semiannual Software Tracker, for the second half of 2022, software vendor revenue in Thailand posted double-digit growth, with a year-on-year increase of 18% in local currency.
“As businesses continue their digitisation efforts, we have seen leading Thai enterprises partner with strategic technology vendors to advance their digital transformation,” said Ms Kavisara.
She said IDC expects to see continued investment in Thailand’s software market as the country’s enterprises transition to digitisation and the government sector encourages the adoption of digital innovation, in line with the government’s target for the digital economy to contribute 30% of the country’s GDP in 2027.
According to IDC’s software report, software vendor revenue in Thailand is expected to post CAGR of 10.9% in baht terms from 2022-27.