Thai Tech Companies Are Hoping to Compete on the Global Stage
It’s 7:30 on a Monday morning. Narudon Wannaphanom (Dontree) is sitting at his desk taking in the quiet before the 50 developers arrive at the office.
While sipping his coffee and going through the different project layouts on his Jira dashboard, he realizes one of the projects won’t be able to stay on schedule because of an issue with running the software on AWS Cloud.
He’ll either have to pull more members from another team to work on his project or he’ll have to tell the client they won’t make the agreed-upon deadline. It’s only Monday and he’s bracing for a long week.
As CTO of Magic Box Solutions (MBS), it’s Dontree’s job to figure out how resources should be managed and whether software projects are going in the right direction.
It’s not as easy as in his coding days, when googling or looking up information on Stack Overflow can usually get him out of tough situations. Sometimes he wonders how he has strayed so far from his namesake (his nickname Dontree means ‘music’ in Thai).
Still, he enjoys it. Thailand has been close to realizing its own tech industry for quite awhile but somehow it has always fallen short. Dontree hopes he can help change that.
When people think of technological innovation in Asia, the last place they think about is probably Southeast Asia, let alone Thailand.
The mind first jumps to Japan and Sony of the 80s when the Walkman ruled. Then it might turn to Korea and Samsung and now to the rising China and Huawei and the controversy it brings.
Tech trends are generally dictated by a fight between Silicon Valley in the West and the major players of East Asia. However, over the past decade or so, small tech industry clusters in non-traditional places are starting to emerge.
CD Projekt Red is a Polish video game company established in 1994. In 2015, the studio released The Witcher 3, winning various Game of the Year awards.
While CDPR has always been somewhat known, The Witcher 3 shined a bigger spotlight on them, bringing the Polish tech industry onto the world stage.
In recent years, similar things are happening around the globe, highlighting a trend of smaller tech clusters around the world competing with the traditional tech giants of Silicon Valley and East Asia.
In the productivity software arena, other countries are also making their mark. Productivity softwares have always been the realm of American companies since the early days of Microsoft Outlook and Excel.
With the start-up boom of the 2000s, it has only been accelerated with the likes of Trello, Slack, and Zoom.
These companies usually originate in California or New York. However, there are now have powerhouses joining their ranks such as Monday (Israel), Pipedrive (Estonia), and Todoist (Chile), all software companies established in places not known for their tech hub.
Returning to Southeast Asia, you would usually think of Singapore if you had to guess which country in this region has the biggest tech hub and you wouldn’t be wrong.
With unicorns like Shopee, Sea, and Trax, Singapore is quickly becoming Southeast Asia’s Silicon Valley. Not only that, many established tech companies like Tencent, Google, and Facebook are also creating regional headquarters there.
So why Singapore instead of countries that are more centrally located like Thailand? The answer is government policies.
The Singapore government has done an amazing job, from a policy and tax perspective, for tech companies to set up and incorporate in Singapore.
First off, Singapore has the world’s freest economy based on the Index of Economic Freedom by the Heritage Foundation.
Second, Singapore has a very straightforward tax policy, something that is not subjected to the whims of the current government regime. On both these fronts, Thailand cannot compete.
Outside of Singapore, other countries in Southeast Asia are also starting to take a step forward. Grab pushed Uber out of the region and was established in Malaysia.
Axie Infinity, a major player in the crypto NFT markets, was created in Vietnam. Gojek, a similar platform to Grab, was established in Indonesia and is starting to expand in the region.
Thailand, not to be outdone, just popped out a unicorn of its own. Bitkub became the first Thai tech company to gain a valuation of over $1 billion. The most well-known before Bitkub is probably Omise, a payment service provider that is making waves in Thailand, Japan, and Singapore.
A technician works on a protective cybersecurity system on January 22, 2019 in Lille, during the 11th International Cybersecurity Forum.
Thailand is poised to become a major tech hub in the region. There are many great startups here such as Pomelo, Eatigo, and Flash. Yet potential does not always translate to reality. The political situation has always been tenuous, with more coup d’etats than any other country in modern history.
The fluctuating situation means rules change often, something that is not conducive to business. Still, technological innovation is slowly emerging and companies like Magic Box Solutions are hoping to make their mark.
People like Dontree know that Thai tech companies are not taken seriously in the global market at times. However, he hopes that changes as the quality improves here.
While MBS does not have the flashiness of Bitkub or Omise, it is a solid company, working with many international enterprise companies and local businesses, from Facebook to FWD to Vichai Trading.
Many of these companies just want to work with businesses that have solid developers and are more economical than other international options. Thailand, while still a bit behind the curve in terms of talent, is slowly catching up.
Universities here are starting to churn out more programmers and the main competitive advantage for Thai software companies is that labor is relatively cheap here.
Digital consulting and service companies like Magic Box Solutions are lacking in Thailand. Part of the issue is that they have to compete with more well-known international companies such as SAP and Salesforce. To most businesses, these well-known companies are safer alternatives as they are well-known commodities.
However, if smaller companies like MBS can provide comparable services, the shift of local businesses putting more trust in local Thai digital companies could be big.
It could start a snowball effect where new entrepreneurs will be more likely to create digital solutions companies, which in turn will encourage more faith in local companies, which will also lead to an increase in demand for local developer talent.