Vol.2/2011

Readiness of THAI SoftwareIndustry for AEC 2015 Software Park Thailand’s director Thanachart

Numnonda says that AEC 2015 represents both an opportunity and a threat for the Thai software industry. The park’s role is to build awareness among local software businesses of the changes ahead and to help them to prepare for the onslaught of unfettered competition from the other nine countries of Asean. Thailand’s ICT market is the largest in Southeast Asia, and it is projected to grow at a compound annual growth rate of 12 percent up to 2014. Total domestic IT spending, included IT products and services, is expected to reach US$8.7 billion (Bt269.78 billion) by 2014. Thanachart says the important aspects of the AEC are the hugely bigger market it will offer – and hence opportunities for local software firms – and the competition it will bring to local players. In its efforts to educate the software industry and prepare local businesses for the new open market, the park is focusing on software development, ICT project management, enterprise architecture design, network and system administration, information systems and network security. While AEC 2015 will mean a larger ICT market and more opportunities, it will also bring a free flow of human resources across the Asean region. Therefore, Thanachart says Thailand’s software industry will need to develop and upgrade the quality of its human resources with international certifications and specialized education about emerging technologies such as mobile applications and cloud computing.

It is said that only a few things are certain in this world, and they are death, taxes and change. As modern business people operating in a dynamic environment, we should be inured to the need for agility, enabling us to not only foresee and accept change, but to use change for our own benefit. In three years’ time, Thailand will undergo a fundamental economic change. On January 1, 2015, the 10 member countries of the Association of Southeast Asian Nations (Asean) will be integrated into a single market and production base called the Asean Economic Community. There will no longer be barriers to trade; there will be nothing but the creativity and competence of Thai business people to stand against a tide of new and powerful competition. We must be ready not only to compete, but to take the lead in what will be a vastly bigger market, with challenges, opportunities, and bigger profits to be made. The software industry is being seen as one of this country’s flagship industries in the coming bid to take advantage of expanded opportunities in the new economic community. Our “domestic” market will effectively leap to a population of 583 million, or 9 per cent of the world’s people, with a gross domestic product (GDP) of US$1,275 billion – only 2 per cent of world GDP. The opportunities for enterprising Thai software companies are huge. However, it seems that awareness has not yet soaked in, that the entire game is about to change, and many of our software businesses are not ready to compete on the new international stage. The government, as the maker of policy, should make urgent additional efforts to build awareness of the new business environment that is just around the corner. Across all Thai industries, it should be actively encouraging readiness and a capacity to compete. The government’s second ICT master plan, which sets the national agenda for the software and information and communications technology industries under the theme Smart Thailand, runs only until 2013. Some government organisations, including Software Park Thailand, have adopted the role of building awareness of the changes ahead and helping local software businesses to prepare for the onslaught of unfettered competition from the other nine countries of Asean.

Software Park Thailand Newsletter is produced by Software Park Thailand under the National Scienceand Technology Development Agency,

Address: 99/31 Software Park Building, ChaengwattanaRd., Pakkred, Nonthaburi 11120, Thailand. Tel. +662 583 9992 Fax: +662 583 2884

www.swpark.or.th; www.facebook.com/softwareparkthailand

EditorialThe game is about to change

Thai software industries should set their positioning through SWOT (strengths, weaknesses, opportunities and threats) analyses and identify niche or un-served areas in which to concentrate future business. Apart from gathering new technical knowledge, software companies also need to upgrade the skills of their human resources, with emphasis on language and analytic capabilities. Ready support and advice can be found in local industry organisations such as the Association of Thai ICT Industry (ATCI), which is working to reinforce the industry’s readiness in close cooperation with the Asian-Oceanian Computing Industry Organization (ASOCIO). The Thai Software Export Promotion Association (TSEP) is also working to help local software exporters to prepare for the Asean Economic Community, especially with regard to the legal aspects of doing business in member countries. Local software and ICT-industry companies that do nothing to prepare for implementation of the Asean Economic Community run the risk of being overwhelmed by strong cross-border and overseas competition. All relevant private-sector and government organizations must be alerted to the urgent need for wider awareness of the looming economic change, so that Thai industries can be encouraged to bolster their capabilities and face 2015 as competent, innovative and competitive organizations, eager to reap the benefits of the Asean Economic Community.

Table of Contents

Software Park Thailand’s director Thanachart Numnonda says that AEC 2015 represents both an opportunity and a threat for the Thai software industry. The park’s role is to build awareness among local software businesses of the changes ahead and to help them to prepare for the onslaught of unfettered competition from the other nine countries of Asean. Thailand’s ICT market is the largest in Southeast Asia, and it is projected to grow at a compound annual growth rate of 12 percent up to 2014. Total domestic IT spending, included IT products and services, is expected to reach US$8.7 billion (Bt269.78 billion) by 2014. Thanachart says the important aspects of the AEC are the hugely bigger market it will offer – and hence opportunities for local software firms – and the competition it will bring to local players. In its efforts to educate the software industry and prepare local businesses for the new open market, the park is focusing on software development, ICT project management, enterprise architecture design, network and system administration, information systems and network security. While AEC 2015 will mean a larger ICT market and more opportunities, it will also bring a free flow of human resources across the Asean region. Therefore, Thanachart says Thailand’s software industry will need to develop and upgrade the quality of its human resources with international certifications and specialized education about emerging technologies such as mobile applications and cloud computing.

Gearing up for AEC 2015: Software industry prepares for new business environment

In the run-up to AEC 2015…ICT Ministry sets the stage

Countdown to AEC: Opportunities outweigh threats, but much remains to be done

MFEC Group seeks partnerships to bolster regional role Group plans full range of information technology services, first in Thailand, then across Asean

SSC IT Group heads in to AEC with three new subsidiaries Focus on Thai leadership of regional IT Services

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Software industry preparesfor new business environment

Gearing up for AEC 2015

The Asean Economic Community will be implemented in 2015, integrating the 10 member nations of the Association of Southeast Asian Nations into a single market and production base. AEC 2015 will bring both opportunities and threats for Thailand’s software industry, depending on the preparation and readiness of individual software businesses. For those companies that are aware of AEC 2015 and are well prepared to meet its challenges, the new economic community will bring big opportunities in the form of a hugely expanded market for their products or services. On the other hand, local software companies that are not alert to the changes that will come with a single open market, and do nothing to prepare for AEC 2015, run the risk of being overwhelmed by strong cross-border and overseas competition. This risk is particularly acute in light of the fact that foreign companies will be able to enjoy all the freedoms of trading within the open market if they register their business in any one of the Asean nations. The establishment of the AEC as a single market and production base will of course encompass the technology sector, including software. The development goals associated with the economic community will include enhanced infrastructure and communications connectivity across the region, development of electronic transactions through e-Asean and integrating industries across the region to promote regional sourcing. The economic community will transform Asean into a region with a free flow of goods, services, investments and skilled labor, as well as free movement of capital.

Bigger market: More opportunities,More competitors

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Software Park Thailand’s director Thanachart Numnonda says that AEC 2015 represents both an opportunity and a threat for the Thai software industry. The park’s role is to build awareness among local software businesses of the changes ahead and to help them to prepare for the onslaught of unfettered competition from the other nine countries of Asean. Thailand’s ICT market is the largest in Southeast Asia, and it is projected to grow at a compound annual growth rate of 12 percent up to 2014. Total domestic IT spending, included IT products and services, is expected to reach US$8.7 billion (Bt269.78 billion) by 2014. Thanachart says the important aspects of the AEC are the hugely bigger market it will offer – and hence opportunities for local software firms – and the competition it will bring to local players. In its efforts to educate the software industry and prepare local businesses for the new open market, the park is focusing on software development, ICT project management, enterprise architecture design, network and system administration, information systems and network security. While AEC 2015 will mean a larger ICT market and more opportunities, it will also bring a free flow of human resources across the Asean region. Therefore, Thanachart says Thailand’s software industry will need to develop and upgrade the quality of its human resources with international certifications and specialized education about emerging technologies such as mobile applications and cloud computing.

Thaicom’s chief executive Suphajee Suthampun, who has long experience in technology businesses in the Asean region, says ICT is one of the priorities in creating the economic community because of its role as an “enabler.”

Moreover, the AEC is not only about the 10 Asean nations, but also the regional grouping’s dialogue partners – China, Japan, Korea, Australia, New Zealand and India (Asean +3 and Asean + 6). She says Asean’s 10 countries have 583 million people, or 9 per cent of the world’s population, but its gross domestic product (GDP) is US$1,275 billion, or only 2 per cent of world GDP. However, Asean +3 (including China, Japan, and Korea) has 2.06 billion people, or about 31 per cent of the world’s population and its GDP is US$ 9,901 billion, or about 18 per cent of the world’s GDP. Asean + 6 (adding Australia, New Zealand, and India) has a population of 3.28 billion people – half of all the people in the world – with a GDP of US$12,250 billion, or about 22 per cent of world GDP. Suphajee says the 21st-century economic landscape – in a flat world – is going to feature global resources, production and infrastructure in an open business environment with economic and expertise value. Therefore, the local software industry should prepare the competitiveness of its businesses by firstly positioning them through SWOT (Strengths, Weaknesses, Opportunities and Threats) analyses and then identifying niche or un-served areas. Apart from technical knowledge, software companies need to upgrade the skills of their human resources, with emphasis on language and analytic capabilities, and then provide them with training through collaboration with vendors, universities and associations, she says. However, to be successful within the AEC, global industry standards such as IEEE, service-oriented architecture (SOA) and compliances are required as a key factor. Suphajee says government-incentive schemes are required, such as tax incentives and programs for development of skills and tools.

Be prepared bypositioning and training

ICT professionalsmust prepare:ICT Ministry

The second ICT master plan, which has the theme: Smart Thailand (2009-2013), aims to develop highly-skilled ICT professionals to comply with Asean regional standards. The master plan also aims to make ICT accessible to at least 50 per cent of the population and to generate about 15 per cent of GDP. To achieve these goals, the plan aims to promote the networking of ICT-skills development, including cyber-security skills, and to facilitate the establishment of a regional mechanism to promote ICT-certification programs and the cross-certification of these programs by ICT-skills competency centers or agencies.

AEC 2015 will allow a free and seamless flow of skilled labor and professionals throughout the 10 countries of Asean. An inspector with the Information and Communications Technology Ministry, Methinee Thepmanee, says that to cope with the challenges of AEC 2015, Thailand has to focus on developing both the quality and quantity of local ICT professionals.

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The ICT Ministry has promoted two sets of ICT standards in Thailand. The first comprises core standards initiatives covering such areas as project management, systems analysis and security specialists. The second comprises professional certifications, with special certifications for competence in selected areas. These include regional ICT professional standards such as those of the Asian-Oceanian Computing Industry Organization – a grouping of ICT industry associations representing the Asia-Oceania region – and Thailand’s industry standard certifications. Methinee says Asean should unify ICT standards and establish professional standards for the region, to set ICT competency levels. Moreover, Asean should establish its own professional certification for special competence in selected areas, such as standards for network and computer-security specialists, as a first priority.

Industry must be aware of AEC 2015’s impact

The local software industry is both aware of and preparing for the chances and challenges that will arrive with the AEC’s single ICT market in 2015, according to the Association of Thai ICT Industry (ATCI). The association’s president Adirek Patithat says the AEC should bring more opportunities than threats because Thailand’s ICT and software industries are in the middle range when compared to the other Asean countries. Local software associations will work closely together to test conditions in cross-border and overseas markets. ATCI will play an important role as a link between these local associations and the Asian-Oceanian Computing Industry Organization (ASOCIO), of which ATCI is a member.

He says the business area with big potential for Thai software companies is applications for mobile devices and for cloud computing.

“The past 10 to 15 years has been about Internet-based technology, but from now on, for the next 10 to 15 years, it will be about cloud-computing technology. So, local software companies should learn the new technology, as well as the new business models,” Adirek says.

The association plans to work with local partners to develop skilled workers for the ICT industry and to approach the government, as the biggest local customer and the best reference site, to give preference to local software. It will also ask the government to offer tax incentives to local companies that invest in IT systems by purchasing local software products and services “If we are strong in our own market, we will be ready to both welcome newcomers to the local market and to compete with the others in overseas markets,” Adirek says. Meanwhile, the Thai Software Export Promotion Association (TSEP) says it will concentrate on persuading the local software industry not only to be aware of the impact of AEC 2015, but also to study the laws and regulations of other Asean countries, particularly those related to investment, labor and capital flow.

Moreover, it aims to facilitate mutual-recognition arrangements for qualifications in IT professional skills, and plans to conduct a workshop on standards development for Asean ICT skills.

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TSEP president Pirason Punyagupta says these legal aspects of doing business will change from country to country, so the software private sector needs to learn more about them. “For the local software industry, AEC 2015 will be both an opportunity and a threat. But for [members of] TSEP – most of us have been preparing ourselves for a couple of years. We have experience in doing software business in other countries. For us, there will be more opportunities than threats. But we have to prepare in such areas as laws and regulations, which might be different in each country,” he says. Currently, most of the 30 software companies that make up TSEP’s total membership are aiming to sell their software services abroad. Some are now concentrating on the domestic market, but they will be ready to compete with others throughout the Asean region by 2015. Pirason says the local software industry must also rapidly increase the numbers of qualified human resources. If Thailand is to become the “hot base” for software development in Asean, then it must have massive numbers of qualified people. “People are the key, and the most important factor for software companies to succeed in large markets like the AEC. Software companies need to develop skilled workers, as well as lifting their software-development processes to comply with global standards. Software companies must make themselves strong in those areas in which they specialize,” Pirason says. “Members of TSEP are willing to partner with software companies and other associations to approach Asean markets together.” Pirason says the industry also needs to prepare local infrastructure, including telecom infrastructure such as broadband and 3G networks, and soft infrastructure such as incentives and facilities. Related to Pirason’s comments about incentives, the Thailand Board of Investment (BoI) already offers inducements for investment in information and communications technology (ICT) and software projects.

The Association of Thai Software Industry (ATSI) believes local software companies are ready to do business both within Thailand and the region. Its president Somporn Maneeratanakul says ATSI is playing a role in securing the place of the main local software businesses in the domestic market, so they will be ready in 2015 to welcome competitors from other Asean countries. ATSI plans to establish local standards for each kind of software, such as enterprise-resource planning (ERP) and finance and accounting, in order to help both software developers and users. With the standard established, local software companies will find more domestic-market opportunities, while users will feel more comfortable with software products and services made locally and certified as measuring up to a benchmark. “Around 95 per cent of local software companies in Thailand are small- and medium-sized companies that focus on both the government and private sectors. If we have a mechanism to help certify their products, it will help to create confidence when users are buying local software,” Somporn says. He says ATSI is planning to help to educate its 300 member companies so that they can deal successfully with the changes that will come with AEC 2015.

It offers maximum tax incentives for investment of more than US$1 million (Bt31.22 million) in high-technology projects where products are made in Thailand, and exemption from import duties on raw materials and components used in producing electronic goods. Moreover, the BoI’s regional operating and headquarters incentive offers an excellent opportunity for setting up ICT service and software headquarters, competency centers and shared services.

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In the run-up toAEC 2015ICT Ministry sets the stage

The Information and Communications Technology (ICT) Ministry is playing a major role in preparing Thailand’s business community for the changes that will come with implementation of the Asean Economic Community (AEC). The biggest concern is that Thai companies will be able to compete in the new regional market and will transform smoothly to participate in the changed trading environment. The Executive Director of the Ministry’s Policy and Strategy Bureau, Areewan Haorangsi, says committees with representation from both government agencies and the private sector have been set up to initiate activities related to the economic transformation, people empowerment and engagement, innovation, infrastructure development, human capital development and bridging the digital divide. Importantly, the Ministry is also working with regional and international partners to develop standard definitions and certifications for ICT skills within Asean. These will apply to software development, ICT project management, enterprise architecture design, network and system administration and information system and network security. The aim is to develop a system of standards across Asean that will enhance the status and recognition of the region’s ICT professionals to international levels. The Ministry is also developing an Intra-Asean Secure Transactions Framework and an Asean e-Government Development Action Plan to support e-government services among member countries of the Asean Economic Community. Areewan says that by using the government’s major development strategies, the ICT Ministry has formulated plans to prepare for implementation of the AEC. The government strategies include the Second Thailand Information and Communications Technology Master Plan 2009- 2013, The National ICT Policy Framework 2011-2020 and National Broadband. The Ministry’s plansinclude developing and managing ICT infrastructure,

upgrading the competitive capacity of the ICT industry to add value and increase earnings, promoting the use of ICT as a means of building sustainable competitiveness for Thai industries and developing human resources for the ICT industry – a task that will be aided by increasing ICT literacy in Thailand. The development and management of ICT infrastructure in Thailand sets out to provide universal broadband access to all businesses and ordinary citizens around the country, including the disadvantaged and people with disabilities, via secure information systems and networks. This strategy aims, among other things, at reducing the “digital divide” – the gap between access for well-off urban dwellers and that for remote and underprivileged people. Businesses and service providers are expected to ensure that their infrastructure is capable of keeping up with technological evolution, in order to meet increasing consumer demand. Their infrastructure should support multimedia services, electronic transactions and other services that are useful to people enjoying modern lifestyles in a knowledge-based society. The Ministry’s target is a high-speed broadband network with minimum speed of 4 Mbps at a fair price for the service rendered. It wants at least 50 per cent of households and businesses in the Muang districts of all provinces to have access to the high-speed broadband network.

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Moreover, the Ministry plans to set up 1,000 ICT Community Centers around the country that will provide e-learning facilities in order to create ICT literacy in local communities, Areewan says. Meanwhile, in its efforts to upgrade the competitive capacity of the ICT industry – to add to the industry’s value and increase its earnings – the Ministry says it will drive though research and development and domestic innovation by the public, academic and private sectors. This is expected to lift the annual value of the domestic software market to more than Bt100 billion, and more than half of this market will be taken by local software companies. Areewan says this will increase and enhance the national standard of products and services, create market opportunities and lift competitiveness. It will also promote the local ICT industry both domestically and overseas. Thai manufacturers of all kinds will be encouraged to access and use ICT to help them make and trade products and services that are knowledge-based, use innovation, and are environmentally friendly. This will be aimed at developing the competitive capacity of businesses by creating and adding value domestically. It will also create confidence among both businesses and consumers to buy and sell goods and services via the Internet, and will enhance the productivity and efficiency of small- and medium-sized enterprises (SMEs), by preparing them to compete in the future free-trade environment. Areewan says the Ministry will work to develop ICT literacy in Thai society. This will provide a basis from which to develop human resources to support the Thai ICT industry as it enters the AEC. However, it will also support cooperation between Thailand and other Asean countries in the establishment of an Asean Center of Excellence. This center will host regional cooperation in research and development as well as innovation among Asean countries.

Areewan says the Ministry’s goals for laying down the country-wide high-speed network infrastructure include covering 80 per cent of Thailand’s population by 2015 and 95 per cent by 2020. This will enable the widespread use of ICT to create competitiveness for the country’s businesses, improve the country’s productivity and support medicines and medical services for longer life. Among its other goals, the ICT Ministry wants 95 per cent of Thailand’s total workforce to be ICT literate; it aims for ICT industries to generate 18 per cent of Thailand’s gross domestic product (GDP); and it wants at least half of the Thai people to be aware of the important role ICT has in supporting economic growth and achieving a green environment. All along, it will encourage government and private-sector organizations to support small- and medium-sized enterprises by consuming their goods and services. "I think that the AEC will create economic strength and efficiency among Asean countries in global markets, which will create competitiveness, productivity and competitive advantage for Thailand as well," Areewan says.

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All of these changes, due to occur simultaneously in 2015, will bring big opportunities and serious challenges to Thailand’s software industry. The market will be vastly larger, but there will be much more competition. While the AEC may appear to be overwhelmingly threatening, there are plans afoot to take advantage of the open regional market by leading Thailand’s software industry into an era of expanded overseas trading. The Chairman of Software Park Thailand’s board, Manoo Ordeedolchest, says ICT will be a key enabler for the social and economic integration of the Asean region. By developing next-generation ICT infrastructures and skilled human capital, promoting content and innovative industries, and establishing an enabling policy and regulatory environment, Asean will employ ICT to transform the region into a single market. Manoo says software is now emerging as a potential area in which Thailand will be able to compete when the open regional market begins, rather than telecom services or hardware. However, while the process of software development has changed, many local software developers remain “stuck in the mindset of the last century”. The new era of software development is focused first on the needs of end-users. Software services in the era of cloud computing and social networking have the characteristics of no time, no space and no matter. This means users can perform business transactions, empowered by software, anytime, anywhere and on any device.

Over the coming three years, excitement and anticipation will build as implementation of the Asean Economic Community draws closer. It will be a time of intensive rethinking and adjustment by all of Thailand’s industries, preparing them for the totally free flow of goods, services, investment, skilled labor, and capital that the hugely expanded market place will bring. For many years, Thailand’s software industry has been eager to find prosperity by approaching lucrative foreign markets. In 2015, the foreign markets will, instead, come to them. The Asean Economic Community (AEC) will bring about the economic integration of Thailand, Malaysia, Singapore, Indonesia, the Philippines, Brunei, Laos, Cambodia, Vietnam and Burma (Myanmar). Together, they have a gross domestic product of US$1.5 trillion (Bt46.8 trillion). Along with economic integration will come quick changes in corporate regulations, including ceilings on ownership, changes to tax regulations, and an expected increase in the movement of investment funds. One of these changes will be the lifting of the foreign-ownership ceiling in service businesses – including software businesses – to 70 per cent. According to Siam Commercial Bank’s Economic Intelligence Center, the information and communications technology sector, including the software industry, is scheduled for priority liberalization of equity participation, allowing up to 70 per cent of foreign ownership. The current rate of foreign ownership in Thailand’s IT-services industry is only 7 per cent, while the current ceiling is set at 49 percent. The Asean Economic Community will also bring other changes to the Thai software industry, including collaboration between domestic and multinational ICT businesses, universities and technical researchers, the movement of skilled labor, and salaries for ICT professionals.

Countdownto AECOpportunities outweighthreats, but much remains to be done

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“To improve their ICT competencies, they can bring SMEs together to cooperate and synergize with local and international partners. They should perceive themselves as being part of an Asean regional and global partnership, rather than doing business alone. In this way, they can learn from the successes of others and take short cuts,” Pirasan says. Federation of Thai Industries Vice Chairman Tanit Sorat says Thailand will take advantage of the single Asean market to become a regional industrial and service hub, including IT and software-service centers. To achieve this goal, priority must be given to creating skilled ICT human resources at all levels of education, starting in the universities. There must also be a parallel effort within the industry to develop a skilled ICT labor force. The government is required to play a key role by integrating policies and support to turn the human-development plan into reality. Importantly, it has to be done in a timely fashion. “The government is also expected to play a key role by supporting the development of competency standards and local software park facilities and services, as well as developing the country’s ICT specialist database, establishing a regional data center and an ICT regional network and so on,” Tanit says.

“Instead of developing software to serve businesses’ back-office systems, with the aim of helping organizations to increase their efficiency, software development is now aimed at helping organizations to increase their productivity and competitiveness, and that means helping them to minimize the ‘transaction costs’ of any service,” Manoo says. He warns that if Thai software companies remain stuck with an “expired mindset” they will lose in the new business-software game – especially in the single market of AEC 2015. The government should be helping to create awareness of the new software-development mindset and also providing support to encourage change in the local software industry, which is made up mostly of small- and medium-sized enterprises. “Understanding the process of any business transaction is powerful knowledge that can help developers to successfully create software and applications to serve users’ needs,” he says. Moreover, the government should set up a social network to conduct crowdsourcing in the software industry and to develop human-resources management. This will help to integrate the strength of local software companies, so that together, they can compete with software developers from overseas. “Social networking is now playing an important role on the business bandwagon. Software developers need to understand this first, and then they have to embed a social-network philosophy into their software services and applications,” Manoo says. Cloud computing is another key factor steering the new direction of software development. Developers should focus on software design and development to serve this new environment. Operating from a cloud-computing platform, software-as-a-service is a crucial model for software service providers. Additionally, software developers should think of developing software and applications to serve mobile devices, Manoo says. Meanwhile, Thai Software Export Promotion Association President Pirasan Punyagupta says that for the ICT industry, especially the software sector, the biggest threat is a creative brain drain and a consequent shortage of ICT and software professionals. To face the challenge successfully, the Thai software industry should be asking itself what areas of ICT and software development it should focus on. It should then establish Thailand as a hotspot for that kind of business, he says. Thai software businesses should concentrate on coming opportunities, rather than quailing at the threats, and should prepare their ability to compete with regional rivals. They should improve their ICT competencies by introducing training, coaching and certification for ICT personnel, while at the same time improving their ICT and software work standards and processes.

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Bangkok-based information-technology services company MFEC Group regards the approaching Asean Economic Community as a huge opportunity, not only to expand its business, but also to find international partners with whom to build up the strength of the ICT industry in the Asean region to serve its population of 600 million. The president of the SET-listed group, Siriwat Vongjarukorn, says that in preparation for the open regional market, MFEC has acquired local companies as its subsidiaries, including Soft Square 1999, Motif Technology, Business Application and A-Host. The group will provide a range of information-technology services, such as end-to-end applications on mobile devices and support for customers ranging from individuals to large enterprises, as well as outsourcing services. "I believe the acquisitions will create synergy, blending and combining the strong points of each business, as well as transferring knowledge between the businesses, before we enter the market. The acquisitions will also help to reduce operating costs and enhance the productivity of our business,” he says. “The group aims to support its customers as full implementation of the Asean Economic Community approaches in 2015. But at this stage, I think we will focus our business domestically, so that we can create opportunities in the local market." Siriwat says MFEC Group is still looking for local partners to form joint ventures, to grow in incubation, or as candidates for merger or acquisition. It seeks by these means to build the strength of local operations so they are capable of competing with international IT services and ICT companies that will enter the Thai market or the Asean common market after 2015, when will no longer be barriers to trade. “I think we need to prepare ourselves, so that we will be able to cope with both domestic and international competitors. Those businesses that do not prepare themselves might lose the opportunity to compete and brave conditions in the new market,” Siriwat says.

The group is not only building its business strength as 2015 approaches, but is also planning to take an active hand in building up the local ICT industry’s human resources and technical skills. MFEC is planning to cooperate with 28 universities in the training of about 5,000 skilled IT graduates capable of meeting local demand over the next five years. It will link up with Mae Fah Luang University and Khon Kaen University as the first institutions in this program. The group currently has about 1,500 employees. “I think the AEC market is important for us in the near future because the ICT market and industry will no longer be limited to Thailand, but will cover all countries in the Asean region. On the other hand, there will be heavy competition because international companies will enter the Thai market as a new opportunity for them. Therefore, we are preparing our business and are ready to create partnerships with local and international companies to enter the new AEC market,” Siriwat says.

MFEC Group seeks partnerships tobolster regional role Group plans full range ofinformation technology services, first in Thailand, then across Asean

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SSC IT Group heads intoAEC with three new subsidiariesFocus on Thai leadership ofregional IT services

As the Asean Economic Community looms, one well-known Thai IT company, SSC Solutions, has undergone a complete restructuring and has spun off its business units to become subsidiary companies. The firm will enter the Asian Economy Community in 2015 as SSC IT Group, heading up three new and single-minded subsidiaries: Sense Water, Thai Software Outsourcing and Anise Asian Thailand. SSC Solutions has, itself, become a member of the group. Chief Executive Trirat Chatkaew says Sense Water is expected to be the group's flagship company, since it has a strong track record in providing water-management software, not only in the local market, but also overseas. It aims to be the leading source of water-management software in the Asean region – making Thailand the leader of this field – by 2015. "This company has registered capital of Bt60 million. It is a global independent software vendor (ISV) partner of IBM's Smarter Planet-Smarter Water," Trirat says. Currently, Sense Water provides water-management solutions for water operators in Malaysia, and is looking for customers in Taiwan, Australia, the Philippines, Finland and Indonesia. Meanwhile, Thai Software Outsourcing is involved in business matching and creating portfolios with local partners to help them build the standards of Thai software developers so they will be able to make the transition to the wider market and find work from other Asean countries. Trirat says the new company will look for opportunities in this market and will not only seek jobs as an outsourcer, but will also outsource those jobs to local software companies or freelancers. "We will match customers and developers, and will also play the role of an outsourcer in big jobs where customers require a project manager. In this business we will work closely with the Software Industry Promotion Agency and Software Park Thailand," he says.

Anise Asian Thailand is SSC IT Group’s most recent operation, aimed at providing cloud-computing services to small- and medium-sized enterprises (SMEs). In a first step, the firm will provide private cloud services by using a platform from Canadian cloud-computing vendor Joyent. Later, it will join with Internet Data Center to provide a public-cloud service brand named Star Anise. Its services will include solutions and software related to accounting, payroll and enterprise resource planning (ERP) for SMEs. Moreover, the firm will join Anise Asian Indonesia and Anise Asian Philippines to provide both private and public cloud-computing services across the Asean market. “I think there is a continuing growth market for information-technology services in Thailand. Meanwhile, accessing IT services by using software-as-a-service (SaaS), via cloud computing, is helping businesses and customers to reduce their investment costs. Therefore, there is an opportunity for Thai software businesses to provide their solutions and develop software to serve the Asian Economy Community in the near future,” Trirat says. SSC IT Group's preparations aim not only to prepare for the Asean Common Market, but also to drive Thailand to become the leader in the Asean market for water-management solutions, software outsourcing and knowledge management, he says.

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