The pandemic resulted in a contraction of almost 5% in Thailand’s IT spending in 2020, but it is forecast to bounce back to a 5% growth this year, propelled by people working from home and studying online, according to a report by a global leading tech research firm.
In 2020, IT spending in the country fell 4.9% year-on-year to THB636.2 billion. Devices saw the biggest year-on-year drop of 14.5%, compared with other IT sectors, to THB161.7 billion, followed by IT services with a 3.5% fall to THB60.1 billion, data centre systems with a 1.1% decline to THB24.8 billion, communications services with a 0.9% dip to THB349.2 billion.
Only enterprise software saw growth with a 0.4% rise to THB40.4 billion. IT spending in Thailand is expected to recover and grow 5% this year to THB668.2 billion. The biggest rebound is forecast for enterprise software spending with a 13.6% jump to THB45.9 billion as remote work support is expanded and improved.
Remote work and remote education are also driving demand for tablets and laptops, which is expected to boost growth in device spending by 9.5% to THB176.9 billion this year.
In 2022, IT spending in Thailand is projected to continue to grow with a rise of 5.3% to THB703.5 billion. Enterprise software is forecast to see the biggest growth with an 8.9% surge to THB50 billion, followed by devices with a 5.8% rise to THB187.3 billion.
The expected rebound of the IT market in Thailand in 2021 falls short of projected growth in global IT spending, which is forecast to see 6.2% growth to US$3.92 trillion.
Last year, global IT spending declined 3.2% year-on-year to $3.6 trillion while chief information officers (CIOs) around the world prioritised spending on technology and services deemed “mission-critical during the initial stage of the pandemic”.
One expert noted that CIOs have a balancing act to perform in 2021 – saving cash and expanding IT. With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels. Digital business, led by projects with a short time to value, will get more money and board-level attention going into 2021.
All IT spending segments worldwide are forecast to return to growth in 2021, particularly enterprise software, which is expected to see the strongest rebound with 8.8% growth to $505 billion as remote work environments are expanded and improved.
The devices segment will see the second-highest growth in 2021 with a jump of 8% and is projected to reach $705.4 billion in spending.
It was noted that there several factors pushing the devices market higher. As countries continue remote education through this year, there will be a demand for tablets and laptops for students.
Likewise, enterprises are industrialising remote work for employees as quarantine measures keep employees at home and budget stabilisation allows CIOs to reinvest in assets that were sweated in 2020.
Digital disruption has grown to become a major force across a broad number of industries worldwide. Thus, the vast majority of global executives admit that their industries will be disrupted to a major or transformative extent. In Thailand, it is interesting to discover what Thai executives’ perspectives are on digital disruption and how companies develop and implement digital transformation in the era of digital disruption.
In October 2019, the Thailand of the firm conducted The Thailand Digital Transformation Survey among 91 executives from several industries. This was to gain insights into the digital transformation phenomenon in a business context in Thailand, how and what way businesses adopt it, as well as the key challenges or obstacles faced. The following are some key insights from the survey.
They found that most Thai businesses especially in Technology, Media and Telecommunication and Financial services are aware that digital disruption is happening. However, they are still optimistic about the impact of digital disruption on their companies.
The report suggests that Thai companies should speed up their digital transformation readiness to deal with major to transformative digital disruption impact as it is likely to happen within the next five years. Moreover, COVID-19 crisis will accelerate digital transformation.
According to the report, tax incentives, easing regulations and well-established infrastructure are the most popular demands companies wish they had from the government. Hence, the Thai government should improve the digital business environment in Thailand by focusing on these issues, reforming education systems and emphasising the importance of data science skills.
