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 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