Looking back: the past 10 years
Borisuthiboun Dasaneeyavaja
Since 1989 Thailand's information industry has enjoyed dramatic, double-digit growth. However, it was not until 1995 when the Government declared that year to be an "IT Year" to celebrate the 50th anniversary of His Majesty's enthronement did the Government began to show strong support for IT.
IT Year saw Thailand come up with its first "national IT policy," along with other supporting activities to help promote IT. However, the fruits of IT Year were not to stay for long, for economic storm clouds were on the horizon.
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| Prominent IT executives then -- and now. Back in 1991, here is the line-up of officers of the Computer Association of Thailand's Vendors Group. |
In early 1996, a study by the Association of Thailand Computer Industry (ATCI) and the Vendor Group of the Computer Association of Thailand (VAT-VG) showed that the IT industry would enjoy a 23 percent growth. However, political uncertainty along with an economic slowdown later forced the associations to revise their figure down to only 11 to 12 percent growth.
In early 1997, there were signals of a further economic slowdown in other industry sectors such as real estate while many finance companies were closed. However, the IT industry was still predicted to be able to escape suffering a similar fate.
However, the shock announcement of the Chavalit Yongchaiyuth-led government to float the baht on July 2, 1997 changed everything. The effective devaluation had a strong impact on the whole country, forcing the ATCI and CAT-VG to again revise their industry forecast.
Reflecting a quiet industry, ATCI President Manoo Ordeedolchest had said that it might experience zero growth for the first time ever.
Mr Manoo's prediction was both right and wrong since in early 1998, when the associations concluded their sales figures for 1997, they surprised everyone by announcing a dramatic growth in term of sales value in baht - but a sharp drop in almost every category.
This was explained to be the result of the baht devaluation that led to a sharp increase in prices of each unit sale. Following the flotation of the currency, the exchange rate slipped steadily to hit a bottom of 55 baht to the US dollar in January, 1998 before recovering to its present value of around 38 baht later that year.
The impact of the economic turmoil was fully seen in 1998 when the overall sales volume was only 25,953 million baht, compared to 42,646 million baht in 1997.
With the Y2K clock moving steadily, Thailand's IT industry is predicted to end 1999 with a very thin growth, stimulated by Y2K spending this year after many companies and organisations largely ignored the Year 2000 problem in 1998 while most of them were too busy finding ways to survive.
Here's a year-by-year summary of major developments in Thailand's IT industry over the past 10 years:
1990
This was a year when the information industry further matured despite soaring oil prices and persistent talk of war in the Gulf that made other business sectors bearish.
There had been a sustained high growth for IT in Thailand, variously estimated at between 20%-40% in the previous year - depending on whose figure you followed.
The total revenue from computer hardware was estimated to be 8,127 million baht, a 21% growth when compared to 6,885 million baht in 1989, according to the ATCI study.
PC installations had reached 150,000 units in 1989, an estimated growth rate ranging from 20 to 30%. The study showed that more than 50% of hardware industry revenue came from PCs which topped 4,875 million baht.
The Government paid no interest in the industry and the National Electronics and Computer Technology Centre (Nectec) was still a very small organisation and was the only agency dealing with high-technology issues.
There were calls for a National IT Policy and a software copyright law without any response from the Government. However, there was government talk about a Data Processing Zone which made the news at the beginning of the year.
On the private sector front, the Siam Cement Group made the surprise announcement to sell its subsidiary, SCT Computer which represented IBM PS/2 models and mid-range computers, as well as being a distributor of AST computers. A management group from International Engineering Co Ltd, SCT and Micronetics and its supporters opted in for the company.
Another development this year was the failure of IBM and the Northeastern agricultural conglomerate, the Kow Yoo Hah group, when it officially announced in May that it would close down its subsidiary, Kow OA Corp, which had represented IBM products in the Northeast.
Newcomers to Thailand this year were Hitachi Data Systems and Unisys, which came here as Siam Unisys in a joint venture. Oracle, Lotus, DacEasy and Autodesk also entered Thailand with software products.
1991
The import duty and business tax was reduced on computers and peripherals, with duties that ranged from between 20% and 40% coming down to 5% while the business tax was cut from 9% to 5%. However, the July import and tax reduction announcement did not include software.
The sales of computers did not surge after the announcement was made - possibly owing to another announcement that confirmed the introduction of value added tax at 7% from January 1, 1992 which made would-be buyers hold off buying equipment in the hope that after the implementation of VAT the prices of computer would be lower.
This year could also be said to be the first in which Thai Government had expressed a strong interest in the IT industry and had introduced measures to promote the indstry.
IT was included in the National Economic and Social Development Plan for the first time ever. This, the Seventh NESDB plan, stated that Thailand would use science and technology as a driving force for the well-being of the nation.
In September, the Government also approved a Data Processing Zone project.
This year also saw Professional Computer Co Ltd, a consortium comprising IBM Thailand, Loxley Ltd (Bangkok) and IBM World Trade, win Thailand's single largest computer project - the 1,696 million baht Revenue Department Computerization Project which turned out the be a big loser in the end, rather than a winner - the saga was to end six years later with the winners paying an undisclosed fine.
IBM Thailand also made the news elsewhere when, in late October, Big Blue announced a new joint venture company with AIS in Singapore and IBM's business partners in Thailand with a new company called Greendot.
Another major contract this year was the computerisation of the Stock Exchange of Thailand, one of Digital Equipment Thailand's biggest contracts.
On the intellectual property front: the US Business Software Alliance (BSA) generated a lot of publicity by stating in March that they "would take certain steps and certain action" to protect interests of the member companies.
This year saw all major IT companies now represented in Thailand, either with a subsidiary or through a distributor, with Microsoft also officially naming The Value Systems as its first distributor here. Other new arrivals included Zenith and Groupe Bull, which appointed Olympia Thai as distributor of Zenith.
The figures: An ATCI study stated that the industry would be worth around 11,829 million baht, a 20% increase over the estimated value of 8,127 million baht in 1990. PCs would again claim the biggest share .
1992
The Thai Government seemed to pay more attention to the industry this year when they approved the establishment of The Committee to Promote National Information Technology Development in March. However, it was still far behind IT development when compared with neighbouring countries like Malaysia or Singapore.
Efforts by the Anand Panyarachun 1 Government to liberalise the computer market through hefty cuts in the import duty on computers and peripherals in 1991 had been largely stymied by Customs-related bureaucratic red tape and alleged irregularities in the valuation and clearance of imports.
A long debated copyright law specifically to protect software was still just that: a topic for debate by academics, software developers and users. This year the Government set up the Intellectual Property Department to consider this subject. Work was being done on drafting a new law which would specifically refer to software rights, however no date has been set for this law to be promulgated.
In June a team of Economic and Financial Crime Suppression police raided three shops on suspicions that computer software and manuals on sale was in infringement of copyright in the first-ever such action in Thailand. The seizure was initiated by BSA.
This year, significantly, the Computer Association Of Thailand and the ATCI joined hands to promote combined national computer show.
The figures: The total IT industry was forecast to be worth 16,313 million baht. The software industry alone was worth 4,281 million baht.
1993
The IT industry was changing with many companies whose revenue income depended on hardware alone beginning to change their business strategy, either by adding value to products or by expanding their business to include other areas with better profit.
Less profit margins, however, meant that the prices of computer hardware and peripherals became more affordable for users - and 130,000 visitors showed up at the Computer Thai exhibition in December.
Meanwhile, the PC software industry, which had been perceived as scarcely having had any value in the past, had become a very attractive business for many companies. This was followed by services, training and other IT-related business such as electronic data interchange (EDI).
The data communications sector promised to be a major growth area with the launch of Thaicom and VSAT (very small aperture satellite) technology. There was talks of videotext services and other data services, as access for non-commercial users to the Internet was a reality through the Nectec-sponsored ThaiSarn academic network.
The IT business had been very tough this year with the evidence of two listed companies - Sahaviriya OA Group and Datamat - reporting losses.
Newcomers: Microsoft set up its subsidiary office in September and Dell Computer named four dealers here.
Figures: The IT industry was worth 20,679 million baht with sales of mainframes slumping by 20%. The total for PC hardware and devices was estimated to be 10,236 million baht with PC software accounting for another 1,300 million baht, a dramatic increase from 562 million baht in 1992.
1994
The Government took several steps to help IT industry starting with reduced import tariffs on software from 20% to 5% in April, followed by the passage of software copyright law.
The Government also granted tax incentives for money spent on research and development. The National IT Committee was also preparing to announce a national IT Policy, while in another initiative the NITC was setting up the Thailand EDI Council.
In recognition of His Majesty the King's contribution to science and technology, and in conjunction with the 50th anniversary of His Majesty's enthronement, the Cabinet decreed in March that 1995 would be "IT Year".
The Thailand Development Research Institute (TDRI) pointed out the problem of the lack of quality computer personnel.
Newcomers: Compaq formally opened its Thailand subsidiary while Electronic Data Systems entered a joint venture with Sahaviriya OA Group. Novell appointed a second distributor while Lotus was poised to set up its own office here. More large PC companies entered the fray aggressively, notably Digital and AST, joining established PC providers Acer, IBM, Compaq and Hewlett Packard.
IBM Thailand underwent extensive internal and regional restructuring which involved cutting back on its staff by more than 100. Metro Systems, meanwhile, which had been exclusively an IBM shop, decided to expand its line to include Toshiba laptops and notebooks as well as Hewlett Packard PCs and workstations.
The figures: total industry was worth 23,781 million baht. (continued)
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