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Thai software vendor revenue grows 14.1% with AI as key driver
Thu, 28th Dec 2023

The International Data Corporations (IDC) has reported a 14.1% year-on-year growth in software vendor revenue in Thailand, accumulating 36.5 billion THB in the first half of 2023 (1H2023).

According to IDC's Worldwide Semiannual Software Tracker 1H2023, the key areas of growth include artificial intelligence (AI) platforms, application platforms, and integration and orchestration middleware.

Thailand's tech industry has shown a notable interest in GenAI due to its proven capabilities, leading to numerous enterprises integrating AI technologies. This shift has consequently motivated tech vendors to heavily invest in AI development inducing significant advancements. The report indicates that software vendor revenue in the AI platform market grew by 58.8% YoY in 1H2023.

Specifically identified was the partnership between AstraZeneca Thailand and Phyathai 2 Hospital. They have adopted AI-based technology for chest X-rays to improve lung cancer screening capabilities. However, concerns relating to AI ethics have been raised following the rise in AI adoption.

To address these, the Thai government launched the AI Governance Clinic (AIGC) and penned the AI Ethics Guideline with the assistance of Mahidol University and Microsoft Thailand, thereby providing a framework for responsible AI adoption.

Kavisara Korkong, Market Analyst at IDC Thailand explained the surge in NLP applications like chatbots, text generation, and summarization throughout 1H23.

"The development of numerous LLMs in 1H23 has fuelled the adoption of NLP applications yet Thai-language LLMs are still behind in accuracy compared to English-language LLMs. This highlights an opportunity for Thai AI vendors to create more culturally attuned Thai-language LLMs, meeting the specific demands of local organizations," he pointed out.

The IDC anticipates continuous NLP development for local languages and a broader AI adoption in Thailand aided by responsible AI principles. In recent years, Thai businesses have adapted and embraced digital transformation to ensure resilience and competitiveness amidst such factors as high inflation, rising interest rates, geopolitical tensions, supply chain disruptions, economic slowdowns and shifting customer behaviour.

The IDC report further reveals a YoY growth of 29.9% in software vendor revenue in the application platforms market in 1H2023.

The IDC Worldwide Semiannual Software Tracker 1H2023 also denoted that the proportion of revenue from the public cloud surpassed that of on-premises and private cloud. Large enterprises, traditionally reliant on on-premises solutions, are increasingly opting for a hybrid strategy for scalability and flexibility, while maintaining enhanced security.

Integration and orchestration software also reported significant growth, indicating a 25.3% YoY increase in the software vendor revenue in this market. As Thai organisations embark on their digital transformation journeys, these software play a crucial role in managing complex IT environments, ensuring synchronisation among data, processes, and applications across the organisation.