2012 will Prove to be a Challenging Year for Thailand's ICT market, says IDC

Kuala Lumpur, 25 January 2012 – The purchasing power of Thais - both consumers and enterprises have been greatly bruised by the devastating floods in 2011 coupled with the current global economic uncertainties. As such, both IT vendors and services providers will find it difficult to maintain healthy revenue growth in Thailand’s ICT industry in 2012. However, with continuous investments from enterprises, IDC expects Thailand’s ICT market to pick up pace by the second quarter of the year.

In 2012, IDC believes that IT investments and spending in the country will be enhanced by the integration of emerging technologies and business models. Attaphon Satidkanitkul, IDC Asia/Pacific's Research Manager for Cross products & Consulting Group who is based in Thailand says, "Although 2012 will be a difficult year to maintain growth in Thailand's ICT market, there are some emerging technologies that will contribute and stimulate the ICT market. They are consumerization, cloud computing and related services, as well as smart devices adoption.” IDC latest forecast shows that Thailand’s ICT market will reach US$ 16.8 billion in 2012, representing a year-on-year (YoY) growth of 10.4%.

Drawing from the latest IDC research and internal brainstorming sessions amongst IDC's regional and country analysts, the following are the top 10 key ICT predictions in 2012 for Thailand. These trends are what IDC believes will have the biggest commercial impact on the Thailand ICT market.

1. Sustained spending in Thailand’s ICT industry
Despite economic woes, IDC predicts that the overall ICT spending will continue to be on the upward trend in 2012. Growth in ICT spending will be seen across all ICT sectors (hardware, software, IT service and telecom service market) with hardware once again leading the expansion. IDC expects the total ICT spending in 2012 to post a YoY increase of 10.4%, reaching close to US$16.8 billion.

2. Mobile Data Services to lead Telecommunication spending
IDC expects mobile data to become the key growth factor for Thailand’s telecom services market in 2012, expanding by 15.5% YoY to reach USD$ 968 million in 2012. The growth will be mainly driven by multimedia services such as mobile web browsing, mobile internet, VDO streaming, and e-mail services.

3. Consumerization: The New World Order
IDC’s latest forecasts show that Thailand‘s smartphone and media tablet market will gain traction in both consumer and enterprise markets from 2012 onwards. Due to their powerful features as well as intuitive user interfaces, iOS and Android-based devices will continue to be embraced by the market. Increasingly, Thai employees are bringing their own devices to use at work. As such, enterprises will have to adopt new solutions or technologies to manage and cater to the diverse nature of smart devices. The most popular solutions that IDC expects enterprises to adopt include client virtualization and cloud-based solutions. Enterprises will also be developing non-virtualization solutions internally, utilizing non-virtualization commercial solutions, and using existing in-house solutions and new management tools that cover multiple platforms.

4. Clear skies ahead for Cloud Computing
Developments in cloud technologies and its related services have been ongoing since the debut of the cloud in 2010. In 2011, there was a wide adoption of cloud layers such as infrastructure-as-a-service (IAAS) and application-as-a-service (AaaS) among IT Services Providers (ITSP), Internet Service Providers (ISP), and datacenter service providers. These developments have provided a strong foundation for cloud and its related technology and services in the country. In 2012, IDC expects cloud computing to attract more attention from enterprises such as the financial services, telecommunication, manufacturing, and services sectors. IDC expects that Cloud at IaaS layer will be the champion service among the cloud services category (the others are AaaS and PaaS). This is because most ITSP and SPs in telecommunication have invested and improved their cloud system infrastructure to cope with upcoming demands from the market.

5. Knock the door please – May FTTx come in?
Fiber to the telecom enclosure (FTTx) technology will become available to the public in 2012. With investments in FTTx coming from the private and public sectors, the technology will become more popular in the coming year. However, the adoption rate of FTTx will be largely dependent on the coverage area and business capability of the telecom operators. The high end customer group will most likely be the first to adopt this service.

6. New Era of Personal Computing: Battle between smart devices and PCs continues in 2012
For years, desktops and laptops have dominated the universe of personal computing. Now, emerging smart devices (smartphones and media tablets) are on the verge of overtaking desktops and laptops as the number one choice for consumers, which marks the beginning of a new personal computing era. IDC maintains that PCs are still needed by both consumers and more importantly, enterprises. However, in 2012, shipments of smart devices are expected to exceed those of PCs for the first time. IDC forecasts that the shipment of smart devices in 2012 will be 6.7 million units compared to only 4.1 million PC units.

7. Mobile Telecom Services Providers will actively expand Wi-Fi services for 3G offload
The large mobile operators in Thailand started their trial 3G services in Thailand in 2011. Due to fierce competition among operators on usage-based plans, some telcos bundled their Wi-Fi services with mobile data packages in order to differentiate themselves from their rivals. However, the objective of Wi-Fi network expansion in Thailand is not only to better support users’ mobile data packages but also reduce the gap of coverage area. IDC predicts that Wi-Fi service will gain momentum in 2012.

Since the investment for Wi-Fi broadband network is costly, collaboration between mobile service operators and ISPs, which have already invested in such wireless network, is expected. This relationship will help mobile service operators to lower their operating cost as well as enhance their 3G service performance. Meanwhile, ISPs will see their profits increase through the utilization of their existing wireless network capacity.

8. Business Continuity and Disaster Recovery will become top priorities for Enterprise IT
Business continuity and disaster recovery (BC/DR) has been adopted in Thailand for a while. However, with increased customer expectations for 24x7 access to uninterrupted services as well as constant pressure to minimize security risks and manage uncertainties, BC/DR looks to take flight in 2012.

IDC advises enterprises to select BC/DR services providers that have well-built datacenter network infrastructure as well as the experience to handle the task. IDC expects that most demand for BC/DR services will be generated from the financial services, telecommunication, and manufacturing sectors.

9. Customer Centricity: A new approach to collaborate with customers
The growth of IT investment and spending will likely be tepid in 2012 with companies cautiously prioritizing their spending in the areas that will reduce costs and more importantly, improve their ability to address customer demand. Today’s customers have become more savvy and demanding as they have a lot more choices available. Thus, it is vital that companies become more customer-centric by offering better customer experience. To become customer-centric, firms must look beyond traditional customer relationship management (CRM) approaches and explore ways to obtain in-depth insights. IT tools can be adopted to capture and analyze customer data from different sources to reach the ultimate goal of determining what customers need.

10. Growing demand for big data analytics
Big data is the most discussed phrase in the IT business world today. In recent times, as a result of the rise and expansion of distinct sources (laptops, mobile devices, tablets social networks, real-time data stores, etc.) beyond just corporate transactions, there has been an explosive growth in data. Today, there are tools available that make it possible to generate insights from vast quantity of data.

In Thailand, social media is getting widely adopted by enterprises and the public sector is encouraging investments in analytics to comprehend online community feedback and sentiments. IDC believes that big data analytics is a trend that Thailand enterprises cannot ignore.