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Published on April 14, 2008

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Rom Hiranpruk Software Park Thailand:  Rom Hiranpruk Software Park Thailand www.swpark.or.th NSTDA (National Science and Technology Development Agency) Ministry of Science and Technology Software Development in ASEAN Region: + Market Opportunities Rom Hiranpruk:  Rom Hiranpruk Position: Director of Software Park Thailand, National Science and Technology Development Agency Education: PhD. (Computer Science); M.S. (Computer Science), University of Kansas, USA; B.A. (Statistics), Macquarie University, Australia  Experience: Dr.Rom taught various undergraduate and graduate classes in computer science in the U.S. during 1980’s and in Thailand during 1990’s. He has served on various panels on IT and computing for government and private organizations. In December 1999 he was named “IT Person of the Year” by The Nation news paper for his work in software industry promotion in the role he now leads at Software Park Thailand. He is also currently the Acting Head of the Office for ICT Industry Promotion within the Ministry of ICT of Thailand. ASEAN REGION:  ASEAN REGION Indonesia Vietnam Malaysia Philippines Singapore Asia/Pacific Region Data:  Asia/Pacific Region Data Source: DRI-WEFA Gartner Group, 2002 Asia/Pacific ICT Markets:  Asia/Pacific ICT Markets Actual 2001 Gartner Group, 2002 Asia/Pacific End-User Spending on ICT by Technology Segment (US$ Million):  Asia/Pacific End-User Spending on ICT by Technology Segment (US$ Million) Hardware Software IT Services Telecom Total Market APAC Japan APAC Japan APAC Japan APAC Japan APAC Japan Gartner Group, 2002 Knowledge Economies....:  Knowledge Economies.... Have an economic and institutional regime that provides incentives for the efficient use of existing knowledge and the creation of new knowledge and entrepreneurship. Have an educated and skilled populace that can create and use knowledge effectively. Require a dynamic information infrastructure that can facilitate the effective communication, dissemination and processing of information. Need an effective innovation system comprising a network of firms, research centres, universities, consultants, and other organisations that can tap into the growing stock of global knowledge, assimilate and adapt it to local needs, and create new knowledge and technology. Have a large and growing component of its economy producing value-adding intellectual property such as designs, patents, ideas, concepts, methodologies, content, research, software and services. Gartner Group, 2002 Friedman “Lexus and Olive Tree”:  Friedman “Lexus and Olive Tree” How Fast is Your Country Is Your Country Harvesting Its Knowledge? How Much Does Your Country Weigh? Does Your Country Dare to Be Open on the Outside? Does Your Country Dare to Be Open on the Inside? Does Your Country's Management Get It and Can You Change Management If They Don't? Is Your Country Willing To Shoot Its Wounded and Suckle the Survivors? How Good Is Your Country at Making Friends? How Good Is Your Country's Brand?   Friedman, 1999 India:  India Lots of change in past few years. Opening of economy, deregulation, privatisation – but much more to be done Unstable government Religious social unrest, tensions high with Pakistan Great differences across regions and cities Software and services great success stories, but happened despite the government Indian diaspora is incredible, and many returning Fast growing ICT market, but from a small base Major opportunities with BPO, outsourced services Gartner Group, 2002 Singapore:  Singapore Last few years a major shock. Worst recession of almost any Asian country. Punches well above its weight, but remains a reasonably small city-state. Highly dependent on global electronics industry & MNCs Has to become more innovative. Singapore Inc and small pool of manpower resources issues Focus moving towards N. Asia (China), away from S.E. Asia. Problems within neighbouring countries that Singapore serves, and some tension with Malaysia. Gartner Group, 2002 Malaysia, Thailand, Philippines, Indonesia:  Malaysia, Thailand, Philippines, Indonesia Growing competition with China Malaysia, Indonesia out of investors favour. Issues with political stability and reputation. Philippines as part of global war on terror. Philippines and Indonesia large budget deficits Thailand encouraging – economic growth, regional centre for several industries (eg automotive) Most need several years of stability to regain trust and momentum Gartner Group, 2002 Asia/Pacific B2C:  Asia/Pacific B2C In US$ millions Gartner Group, 2002 Asia/Pacific B2B:  Asia/Pacific B2B Gartner Group, 2002 APAC IT Services 2001 :  APAC IT Services 2001 Australia 38% China 14% S Korea 14% Singapore 7% Taiwan 6% India 5% Hong Kong 5% New Zealand 3% Malaysia 3% Rest of Asia 2% Thailand 2% Indonesia 1% Gartner Group, 2002 Software Industry in Emerging Markets:  Strong Govt. support Domestic market growth Stable macroeconomic Education Obstacles/ Concerns Drivers/ Demands Lack of core technology Weak marketing capability Cost competitive and high-quality talents Non-Latin language skills Full of small-scale IT companies Short of high-level talents Poor global mindset Intellectual property protection and piracy Fast-growing infrastructure Lack of ISO/CMM certified companies Software Industry in Emerging Markets .….. Gartner Group, 2003 Definitions::  Definitions: IT Outsourcing: Multiyear contract/ relationship involving the purchase of non-maintenance IT services with at least one IT management services. Business Process Outsourcing: Multiyear contract/ relationship involving the purchase of business process management. Gartner Group, 2002 E-Business Hype Cycle:  E-Business Hype Cycle Trigger Peak of Inflated Expectations Trough of Disillusionment Slope of Enlightenment Plateau of Productivity Year Visibility Gartner Group, 2002 Asia Pacific IT Market Attractiveness:  Asia Pacific IT Market Attractiveness 20 30 40 50 60 70 80 90 100 40 45 50 55 60 65 70 75 Long-Term Growth Prospects IT Maturity Korea Hong Kong Australia Singapore United States Japan Malaysia Taiwan India Indonesia Thailand China Philippines Gartner Group, 2002 Web Services:  Web Services Web Services will fulfill on many of the broken promises of the past and present a compelling opportunity for enterprises of all sizes Whether as a tool or a goal, Web services are poised to have a dramatic effect on business — even enterprises that think of themselves as independent of technology trends Factors: The Internet has happened Reuse Culture Semantic Agreement Simplicity Gartner Group, 2002 Businesses based on Web Services:  Businesses based on Web Services Forge tools to build them Support them with a technology platform Hire people to integrate them Aggregate them Establish directories to find them Transform company into a Web services provider Web Service Management Gartner Group, 2002 Mobile Phenomenon?:  Mobile Phenomenon? Technology Business Need Social Trends Fun, fashion, the always-on generation, entertainment, electronics as a lifestyle accessory WAP, i-mode, J2ME, Bluetooth, location-sensing, EMS, MMS, 2.5G, 3G networks Economics Airtime cost, device costs (e.g., handsets, 802.11 and Bluetooth chips), disposable phones ... Anywhere, anytime commerce, cost reduction/self-service, bridge supply chain gaps Gartner Group, 2002 Future Technologies – Enable More Functions:  CMOS Camera Wide Color Display Built-in PDA or Phone Java Bluetooth WLAN MP3/MPEG4 Over-Air Management Location-Based Services Remote Medical Services Mobile Banking With High Security (E-Trade) Entertainment Interactive TV News/Music with Video Clipping N.G. Games Dynamic Content M-Wallet Mobile iTV GPS Home Automation Future Technologies – Enable More Functions Gartner Group, 2002 Scenario I: Go with the Flow?:  Adopt global industry de facto standard OSs and other systems software. Billions of dollars flow over into Microsoft and other foreign companies for proprietary software in the wake of ever-increasing computerization demand given fully executed intellectual property rights. Negotiate very hard with foreign software vendors. Continue to develop domestic application-focused software industry. Under the shadow of being eavesdropped by the “back-doors” left open in the imported software by foreign government agencies. Scenario I: Go with the Flow? Scenario II: Open Source:  Adopt Open Source en masse with minimized use of foreign software even relating to critical systems. Less concern about security and worries about being at the mercy of foreign vendors and nations. No necessity to execute intellectual property protection. Invest with 'saved' cash on indigenous companies to gain expertise in adapting Open Source software for robust, high-volume, large-scale environments and thus build domestic companies and skills. Capable of exporting those solutions globally - taking on foreign entrenched software houses and targeting a space no one (not even the Indians) own today. Scenario II: Open Source Plus vs. Minus of Open Source:  Plus vs. Minus of Open Source Linux Making Inroads, but $ Elusive:  Linux Making Inroads, but $ Elusive Units Shipped End User Spending Linux continues to be over-hyped, mostly due to anti-Microsoft sentiments, especially with the release of Microsoft Licensing 6.0 and worry of Microsoft and MNC vendor lock-in Source: Gartner Dataquest Asia Pacific OS Forecast & Gartner Dataquest Server Quarterly Statistics November 2002 Gartner Group, 2002 Linux Desktop and Server Penetration:  Source: Gartner Dataquest Asia Pacific Baseline Budget Survey September 2002 Linux Desktop and Server Penetration Desktop penetration will remain even more elusive with Linux even less popular than the legacy Windows 3.X OS Linux fares somewhat better on servers, still poses little threat Gartner Recommendations:  Gartner Recommendations Web Services: Enterprises should commence pilot projects using Web services standards and deployment models now! Mobility: Mobile computing still has many challenges to overcome, but offers vendors opportunities to expand then domain expertise in new markets Smart Cards: The “Chicken or the Egg” problem is most easily solved by Government-funded wide deployments of infrastructure and cards - but education is critical Outsourcing / IT-Services: The question is not whether China is a threat to India, its whether China and India can work together to create a unique sustainable cooperative advantage – Thailand will also have niche opportunities Linux / Open Source: Open source software is a viable alternative in certain circumstances. But do not fall for the media and anti-Microsoft hype. Total Cost of Ownership is much higher than many anticipate. Gartner Group, 2002 External Sourcing Situation: Gartner 2003:  External Sourcing Situation: Gartner 2003 Asia/Pacific will capture a majority of the offshore services market in 2003 with growth of 35-40%, most of which will be derived from demand for IT services from the US, which will grow 3% Business Process Outsourcing (BPO) will make slow but steady progress, with some casualties due to unrealistic expectations of some Indian providers along the way China will begin to appear on the global sourcing and services stage through partnerships and joint ventures Shakeout and consolidation will continue in Indian offshore market Outsourcing Becomes Mainstream:  Outsourcing Becomes Mainstream Year Number of Enterprises Using Offshore Sourcing For The First Time 1995 to 2001 2004 and Beyond 2002 to 2003 Gartner Group, 2002 History of External Service Provider (ESP):  History of External Service Provider (ESP) 1970s Time sharing Mainframe 1980s Facilities Management PCs 1990s Infrastructure Outsourcing Client/ Server 2000s Applications Outsourcing ERP/ Internet/ ASP 2010s Process Outsourcing Web Services (source: Gartner Group 2002) Gartner Group Statistics (2001) :  Gartner Group Statistics (2001) Professional Service Growth CAGR % Asia/Pac Japan US World 1999 -->2004 28 13 19 19 World wide IT Services CAGR % Discrete 47 41 Outsourced 53 59 IT Outsourcing Market Share (Gartner Group 2001):  IT Outsourcing Market Share (Gartner Group 2001) Indian and Chinese Software and Application Development Services Revenues:  Indian and Chinese Software and Application Development Services Revenues Gartner Group, 2003 Gartner Group Recommendations:  Gartner Group Recommendations Outsourcing / IT-Services: The question is not whether China is a threat to India, its whether China and India can work together to create a unique sustainable cooperative advantage – Thailand will also have niche opportunities Linux / Open Source: Open source software is a viable alternative in certain circumstances. But do not fall for the media and anti-Microsoft hype. Total Cost of Ownership is much higher than many anticipate. Source: Gartner 2003 Software Park Thailand www.swpark.or.th:  Software Park Thailand www.swpark.or.th Software Park Building 99/31 Chaengwattana Road Pakkred, Nonthaburi 11120 Tel. 583-9992, 962-2900 Fax. 583-2884 Software Park Thailand:  Software Park Thailand 52 companies, 2 Associations 14 from Overseas: USA, Finland, Netherlands, Switzerland, Japan, Singapore, Taiwan, Germany 100% occupied Surroundings:  Surroundings Slide39:  Software Park Support Center For the Thai Software Industry Source:Internet Thailand 2002 Slide40:  AKRA SOFT Application development, System Integration and Consulting ALGORITHMS Developer of innovative software products, games, and embedded system for Thai ATSI Association for software companies in Thailand BANK OF ASIA E-commerce application development BMTL/MDS SW&HW provides to pc, tv and Broad band Industries BITSTORM Development of "Smartkey", a security storage of certificates and credentials COMPUTER SCIENCE Human Resource Management System E4ASIA VoIP and Wireless Application E-INDUSTRY WORLD An industrial information center E-PROFESSIONAL Software development on IBM platform and off-shore development for JAVA applications HEADWAY TECHNOLOGY Internet kiosk system, Accounting software, Web-application solutions I.E. SOLUTIONS System integrator for hospital IBM Thailand Service center of IBM (Thailand) Co.,Ltd. INFOTRONICS Multimedia software, software application for machine maintenance ITELCO GIS software development JR Synergy Co.,Ltd. Quality system management services, consultancy and training K SOFT ENTERPRISE Development of home pages and software application for auction Slide41:  MUSTANG TECHNOLOGIES Provider of Outsourced Software Services (Offshore Development) for global companies MYSOFT TECHNOLOGIES Software for medical industry and photography for jewelry industry NSTDA Online Learning Project Provider of online learning services N.T. SYSTEM Provider of computer network system DATA DESIGN CAD/CAM PACIFIC EDUCATION NETWORK Software for classroom management, CAI and multimedia PMO (ASIA IT&C) European Union Initiatives for co-financing in IT&C programme PROFIDATA TECHNOLOGIES Development and implementation of integrated systems for banking industry SETEC ASIA Development of the complete security card solutions SYSTEM PLUS GROUP Development of customized software for accounting application THAI IC DESIGN INCUBATOR Provides a broad range of VLSI integrated circuits development and design services ULTIMAX System integrator and solution provider VIRTUAL SYSTEMS (Thailand) Provider of web hosting and consultancy WARDEN INTERNATIONAL System Integrator and software value-added reseller for hospital management and Cache Database Developer of customized software for organizations ZEN VOCE TECHNOLOGY Developer of Manufacturing Resource Optimization Suit (MROS) Services + Facilities:  Services + Facilities Software Process Improvement Center (SPIC) Incubator Center Mobile E-Services Bazaar (HP) m-Lab (Nokia) e-Infrastructure Center (IBM) Center of Excellence for Computer Security (CECoS) Up-coming Centers of Competency::  Up-coming Centers of Competency: Java Expert Center (Sun + partners) Database Technology Center (Oracle + HP + partners) Business Domain Center (IBM +partners) DotNET Center (Microsoft) SPIC Services:  SPIC Services SPIC of Software Park Thailand provides measurable competitive advantage to Thai software companies through a combination of : Consulting Training/ Seminar Assessments SPIN (SPI Network) Meeting Five Levels of CMM:  Five Levels of CMM Incubator Center:  Incubator Center Tax Incentive from BOI Pooled PR & Marketing efforts Lower cost of production: - full office facilities - software / hardware infrastructure - business information Software Park Thailand Incubator Center Activities:  Software Park Thailand Incubator Center Activities Mobile E-Services Bazaar (HP):  Mobile E-Services Bazaar (HP) Mobile application development Knowledge, Tools and Training Marketing support Business partners: 50+ venture capitalists technology suppliers application developers mLAB (Nokia):  mLAB (Nokia) Stimulate mobile internet apps. Technology Transfer via mSchool Development Lab. e-infrastructure Center (IBM):  e-infrastructure Center (IBM) Porting across hardware/software platforms Enterprise Application Development tools e-business resources Unix/Linux environment CECoS Center of Excellence for Computer Security:  CECoS Center of Excellence for Computer Security Hardware & software security tools Journals, manuals and transcripts Technical/professional seminars Link academic and industry Next Step: Domestic Software Industry Cluster:  Next Step: Domestic Software Industry Cluster IT Park, Bangkok (Q4 2002) Samui IT Complex (Q2 2003) Chiangmai IT Knowledge Park (Q4 2003) Phuket Software Park (Q4 2003) Khonkaen ICT Park (Q1 2004) Bangkok ICT Cluster (Q4 2004) SwPark + IT Park + Science Park Regional Partnerships:  Regional Partnerships MoU Indo-Thai IT Collaboration 2001 Ministry ICT Vietnam Software Parks Saigon, Quangtrung Myanmar ICT Park www.mict-park.com.mm National IT Cluster:  National IT Cluster Bangkok IT Cluster (3Parks):  Bangkok IT Cluster (3Parks) SAMUI IT COMPLEX: :  SAMUI IT COMPLEX: website: http://ITC.samui.orgTel:  0-77 418524 .. 7contact: ITC@samui.orgLocation: Koh Samui, Maret (mainroad) Space ready (Contract starts):                       Feb. 01, 2003 (or earlier) Units available on 2nd floor:                         10 - 200 sqm per unit Units available on 3rd floor:                         10 - 200 sqm per unit Units in attached building 2:                        lower level, 3x 44sqm, 1x 30sqm Units in attached building 2:                        upper level, 3x 44sqm, 1x 30sqm Facilities: 128k LAN Internet connection 24/7, broadband, Satellite, Generator backups, Thai + Euro electric wiring, 100 Phone lines (Analog/ISDN), Fiber Optic (DLC), ATM banking. Energy saving flicker free office lightning, colored mirror glassing. Large parking areas. SAMUI IT COMPLEX //itc.samui.org Slide57:  ICT Cluster Surrounded by 60000 faculties and students in 7 nearby campus Source:Internet Thailand 2002 Slide58:  IT PARK for Information Technology Industry: Software, Multimedia, e-Commerce Business Extension Infrastructure for MNC Regional HQs Source:Internet Thailand 2002 Slide59:  Science Park Where Innovations and Technologies Grow Research and Development - BIOTEC = BioTechnology - MTEC = Material/Energy - NECTEC = ICT Source:Internet Thailand 2002 Why Software? - Some answers::  Why Software? - Some answers: Software is used in every types of businesses and industries Application Software market is much larger than platform market World demand for software is growing exponentially Clean, knowledge-based industry Significance of Software Industry:  Significance of Software Industry Slide62:  Information and Communication Technology enable World economy moves toward “Knowledge economy” Computer Software Manufacturing New Economy Industries by Market Value (as of November 8, 2001):  New Economy Industries by Market Value (as of November 8, 2001) Source: Nasdaq-100, Fortune magazine, No.25. December 17, 2001. p.S2 Paradigm Shift From Industrial to Knowledge:  Paradigm Shift From Industrial to Knowledge Slide65:  Industry Based Economy ‘Make and Sell’ ‘Sense and Respond’ ‘Goods for Elites’ ‘Goods for Everyone’ ‘Mass Market’ ‘Markets of One’ ‘Owning Assets’ ‘Gaining Access’ ‘Corporate Governance’ ‘Market Governance’ ‘Just in Time’ ‘Real Time’ ‘Local Economy’ ‘Global Economy’ ‘Asymmetry of Information’ ‘Democratization of Information’ ‘Economics of Diminishing Returns’ ‘Economics of Increasing Returns’ Industries and Businesses Are Buzzing With Changes Knowledge Based Economy Source: Marketing Moves Industry Building :  Industry Building Marketing Human Capital Venture Creation Research & Development Infrastructure & Government regulation Thai Software Industry Thailand IT Spending:  Thailand IT Spending Software as a future export industry in new economy:  Software as a future export industry in new economy Source: ATCI (Thailand), National Software Directorate (Ireland), Nasscom (India), Association of Software Houses (Israel) Thailand Software Industry 2001:  Thailand Software Industry 2001 Local companies 600+ Professionals 20,000 + 3,000 p.a. (ATSI 2001) Import about 70% of market Export < 500 Mil. Baht Annual growth >30% Import duty 0% (ITA1) Slide70:  Proposed Target for Thai Software Industry... (ATSI 2002) Revenue Export Developers Five Years 90,000 mil.Baht 14,000 mil.Baht 23,000 mil Baht (70% MNCs) 1,000 mil.Baht 20,000 People new graduate 3,000/year 70% of Market Import 50% of Market 50,000 People Present Slide71:  Focus on what he can do best Risk taker Technology aware and literate Not technology dependent Look for success not career step Never close mind Innovative and creative Never discourage Open to new idea 24/7 Source: TU EX-MBA2002 Software Manpower:  Software Manpower Source: SwP 2002 Thailand SWOT (Outsider point of view):  Thailand SWOT (Outsider point of view) Opportunities Strong government support Strong regional and global alliances Large untapped market potential Threats Emerging lower labor cost countries e.g. Vietnam, Myanmar Digital Divide/Globalization Strengths Adaptable workers Culture / open society Location Advantage Draw in IT knowledge workers Security / No Social unrest Multimedia and creative works Weaknesses English Analytical thinking Management / Discipline Government Regulation Funding Human Capital Capability Building Process:  Human Capital Capability Building Process Time Many foreign IT knowledge workers are needed initially. %Knowledge worker (Technical + Management + Marketing 100% Opportunities for Thai Software Industry:  Global outsourcing $659.36bn in 2004 North America=54%; Europe=44% in 2000 Industry domain advantages (jewelry, tourism, Agriculture, etc.) Lower costs & location advantage Opportunities for Thai Software Industry Software Industry Competitive Landscape:  Software Technology Evolution Shift 1 Shift 2 Procedure Driven Paradigm Mobile Code Paradigm Object Oriented Driven Paradigm Computer Languages Analysis Design Methodology Software Tools Data Stores Data network & Data Comm Multimedia Middle- wares Dynamic Distributed Computing (Mobile Code Paradigm) (Object Oriented Paradigm) Technologies Role Domain (Procedure Paradigm) Software Industry Competitive Landscape Software Park Thailand China Visit 2002:  Software Park Thailand China Visit 2002 Shanghai 2002 CeBIT Asia Software Park Thailand CMM Activities:  Software Park Thailand CMM Activities CMM Workshop #3 Vietnam Software Quality Workshop 2002

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