Cloud computing has not been the most popular of technologies in Thailand. Developers, for example, are much more interested in working on Android projects than cloud ones, according to a survey carried out by the IMC Institute, which conducts research on information and communications technology (ICT) markets and policy in Thailand. However, the country is fast waking up to the potential of, and the need for, the cloud, and the country is quickly becoming one of the more promising markets for it. In addition to the usual reasons for the adoption of the product – scalability, cost and convenience – there are reasons very Thai-specific. The protests of 2010, the floods of 2011 and the ongoing protests that began in 2013 have convinced many enterprises that they should begin to distribute their data and their processes to servers outside their offices and around the country, or the region. While it is difficult to know whether the country will remain politically unstable, or whether the flood waters will return, over the past few years business managers have seen firsthand the need for robust, redundant and remote systems.
Take Off Period
Cloud computing is just starting to take off in the country. In mid-2013 Kasikorn Research Institute estimated that cloud computing would grow 22% in 2013 to BT2.3bn ($75.2m). Frost & Sullivan, meanwhile, estimated at about the same time that the data centre business in Thailand would grow 21% in 2013 to BT1.7bn ($55.6m), with the main drivers being the adoption of cloud computing, the need for disaster recovery and the increasing connectivity within ASEAN. It noted that while the cloud was well-known in the country, most enterprises were still learning about the offering and what it means for their businesses. For many, it has not been altogether clear what the cloud does and more importantly why they should want it. “People are trying to see what the idea of cloud computing is,” said Prasit Sujiravorakul, an analyst at Bangkok-based Bualuang Securities. In 2012 Thanachart Numnonda, the former director of Software Park Alliance, detailed some of the challenges faced by cloud computing in Thailand in a “public cloud day” presentation at Software Park Thailand in November 2012. He noted the lack of awareness about the cloud – not really understanding what it is and how it works – security issues, the lack of internet connections, providers and trust in the cloud, as well as bandwidth problems. Most IT managers are not comfortable with letting others store their intellectual property and have visibility into their accounts, orders and ongoing businesses.
Supply has also been an issue. In 2012 the country had few software-as-a-service providers and mainly infrastructure-as-a-service providers. A Microsoft Thailand survey found much the same as the Software Park Alliance. According to its survey, IT decision makers still believe that cloud computing will result in a loss of productivity and could reduce privacy. Microsoft is now focusing on educating customers about the benefits of the cloud.
Thailand ranked poorly in the Business Software Alliance’s (BSA) 2013 Global Cloud Computing Scorecard. It was 23rd on a list of 24, beaten by Indonesia, Brazil, China and India, but ahead of Vietnam. While Thailand is implementing a cyber security law, the BSA noted that its privacy laws were too weak to properly support cloud development. Specifically, the alliance noted that Thailand did not have laws regarding the use and collection of personal information, lacked a breach notification law and the country had not signed the World International Property Organisation’s copyright treaty. It also counted censorship and government filtering within the country as a minus on the scorecard.
Thailand also ranks poorly on the Asia Cloud Computing Association’s 2012 index. It was tied for last, 13th place, with Vietnam. On the list, Japan was in first place, Korea was number two, while Indonesia was in 11th place and the Philippines was 12th. Thailand scored the lowest in the region on data sovereignty and data centre risk in that study.
However, the environment for cloud computing in the country is improving. Trust is increasing, the business case is being better understood and companies are beginning to see why they need the cloud. All along, the businesses of Thailand have been learning about the cloud and getting comfortable with it, and the crises of recent years – the floods and the protests – focused their attention.
A new sense of urgency has been noted. In researching the VM ware Cloud Index 2013, the cloud infrastructure company found that in emerging markets companies were putting the cloud at the top of the list of their priorities, ahead of sales, profits and cost cutting. In Thailand, 92% of businesses said that they must act quickly on the cloud or risk losing out in the market, according to VM ware.
“In Thailand, we are starting to see activity around cloud computing,” said Chatchai Jindarat, an analyst at Maybank. “Right now, demand for cloud is so huge, but there is a supply shortage.”
Several initiatives have been undertaken to boost the product locally. In 2012 the Software Park Thailand formed a partnership with cloud service providers to create the Cloud Thailand Alliance. The five other founding partners of the new organisation were True IDC, Datapro, Anise Asia, Cloud Creation and TOT GO, and its goal is to develop cloud applications.
E-government has also played a significant role in cloud development. In 2012 the government launched a cloud initiative to centralise the computing needs of various departments, ministries and agencies and help them lower their IT budgets.
Success has been achieved quite quickly. By May 2013 the government cloud was hosting a total of 200 systems from 100 organisations. Sak Segknoonthod, the director of the Electronic Government Agency (EGA), the organisation responsible for promoting and supporting the development of e-government services in Thailand, estimated that by the end of 2013, the government cloud would be offering more than 50 applications. The recent goal has been to get some of the more critical and sensitive government departments to accept the cloud and migrate over to it.
In early 2013 the Cloud Security Alliance (CSA), a non-profit organisation that works to create and promote best practices for cloud security, and the EGA formed an alliance. The agreement is wide-ranging and is designed to ensure that cloud solutions in Thailand are well-built and maintained, safe and that certain basic standards are met. It calls for the Thai government to provide resources for CSA research, for the EGA to adopt the CSA Open Certification Framework for cloud providers, and to make it mandatory that all engineers and security specialists working on the cloud in the country receive a certificate of cloud security knowledge.
Local & Foreign Investment
Some firms are already preparing for the expected increase in demand for cloud services. In October 2013 TCC Technology expanded its 5295-sq-metre data centre by 13,500 sq metres. According to the firm, which is owned by Berli Jucker and TCC Holding, this expansion will make it the country’s largest data centre.
Meanwhile, foreign support of the cloud is being encouraged, with the Board of Investment (BOI) targeting the data centre business as one of the areas for official promotion. It is seeking to support those that commit to a substantial presence and that operate to international standards. In order to qualify for incentives, a data centre must be wired with high-speed fibre optic; be connected to high-speed telecommunications lines; have back-up power; have a high-efficiency cooling and air filtration system; and be at least 5000 sq metres in size.
Some significant projects are being undertaken. For example, in April 2013 CAT Telecom formed a partnership with IBM. IBM will supply the Thai company with its SmartCloud infrastructure and provide relevant management services for four years.
The top cloud services by market share in Thailand are Google’s APP Engine (22.4%), Microsoft’s Windows Azure (19%), Amazon Web Services (13%) and Heroku (5.6%), according to a September 2013 report in the Bangkok Post.
The ASEAN Factor
While the country still faces some opposition with respect to the cloud, circumstances will push it toward greater acceptance. It is next to two of the region’s most powerful cloud economies, Singapore and Malaysia, and with the trade walls coming down in 2015 in ASEAN due to the establishment of the ASEAN Economic Community, Thailand is likely to make significant efforts to bring its cloud programmes up to standard. It is essential in order to ensure that Thai companies can compete with their regional peers, which already have access to advanced, low-cost cloud solutions.
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