Thailand’s software market grew 20.1% year-over-year (YoY) in 1H22, accelerating from 14.5% YoY in 2H21.
The IDC Worldwide Semiannual Software Tracker report noted that Thai organisations 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 personalised 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 a sustainable competitive advantage,” said Kavisara Korkong, market analyst at IDC Thailand.
Software Categories
IDC classifies the software market into three 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 productive work and remote working is now more widespread, the adoption of technologies, to enable effective collaboration across the business becomes the highest priority on most organisations’ 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. As 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 organisations 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 spending 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 organisations start focusing more on efficient data utilisation to enhance business outcomes and improve customer experience by understanding consumer behaviour and offering customised products and services.
Leveraging AI for better data utilisation 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 the application development and deployment market in 1H22, indicating increased demand from Thai organisations.
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.
