Empowering SMEs with the cloud to fuel Thai economic growth

With Thailand’s ambitious plans to drive the digital economy with technology, and ambitious plans to grow Thai SMEs by 50% in ten years, this is a time of great opportunity for the SMEs that compose more than 99 percent of Thai businesses. With the opening of the ASEAN Economic Community to more than 600 million consumers next year, the time is ripe for Thai SMEs to transform and capitalize.

But despite their number and economic significance, according to the Thailand Office of Small and Medium Enterprise Promotion (OSMEP), Thai SMEs contribute only about 38 percent of Thailand’s GDP, a figure that given the right conditions could and should be closer to 40-50 percent, as in comparable Asia-Pacific economies. The issue is one of productivity: in a fast-growing, regionally competitive environment, Thai SME productivity is an important means of preserving Thailand’s competitive advantage.

As pointed out during Microsoft’s presentation at the APEC-funded seminar on “Promoting APEC SME Innovation through Smart IPR Policy” hosted by OSMEP, SME integration of technology at all points along the value chain can be the differentiator. A recent Boston Consulting Group study shared during the seminar revealed that SMEs that led the field in adopting new technologies were far more likely to grow well above the rate of GDP growth (BCG, Ahead of the Curve: Lessons on Technology and Growth from Small-Business Leaders, 2013). In a world increasingly dominated by four mega trends – Mobile, Social, Big Data, and Cloud – it is vital that Thai SMEs not only keep up, but capitalize on these current trends in order to increase productivity and maintain competitiveness.

How can Thai SMEs harness technology to increase productivity?

One answer is
cloud. From agriculture to the creative industries, SMEs across the board can benefit from the same technology deployed by their bigger corporate competition by means of cloud computing, which equips businesses with enterprise-grade capabilities at lower costs. A trusted cloud allows a small business to handle vast quantities of data while streamlining operations by reducing investment in hardware, allowing access to users anywhere, anytime, offline and online and within a secured environment.

Let me give you an example. Thai construction services company Builk, winner of the Echelon 2012 startup competition – Asia’s largest startup event – has been aggressive in capitalizing on cloud. According to Principal/Evangelist Mr. Patai Padungtin, “If we have to buy our own servers, we need to pay 500,000 baht just for servers – not to mention the software license cost. And we also have to absorb all the support costs. As far as the long-term expenses are concerned, moving the system to the Microsoft Azure cloud platform is a worthwhile investment. Most importantly, Azure can help us quickly scale and grow our system according to our needs.”

Similarly, by choosing to deploy Microsoft Cloud-based communications platform Lync for long-distance meetings, the Federation of Thai Industries can reach more than 8,000 members from 42 industries, including many SMEs, at different locations across Thailand without incurring any of the traditional venue and transportation costs. That’s a great, cost-effective way of managing a large network, not to mention a very green approach to doing so.

Cloud presents both opportunities and challenges: security and privacy have made headlines time and again in the cloud era. As I recently emphasized at the 25th Anniversary of the Association of Thai ICT Industry, SMEs must be careful to choose a cloud partner that adheres to global standards in transparency, security, and data management, one with a firm commitment never to monetize customer information under any circumstances. A robust regulatory regime is required to protect personal data and help law enforcement fight cybercrime in a digital economy.

According to the Boston Consulting Group study, governments also have a critical role in fostering the right conditions for fueling the growth of the next billion-dollar enterprises. This means ensuring access to new technologies, supporting the training required to use them and promoting a legislative environment that allows SMEs to fully leverage these technologies and protect their innovations. Unfortunately, results of a recent “Cloud Computing Readiness in Thailand 2014” survey by Thailand’s IMC Institute show that enterprises in Thailand have a “lower level of readiness” when it comes to the cloud.

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among their respective
stakeholder businesses. Other Microsoft programs such as Partners in Learning, YouthSpark, Imagine Cup, DreamSpark, BizSpark and our partnership with Mechai Viravaidya’s Population and Community Development Association for technology inclusion and training in rural communities express our high hopes for a future generation of innovators and entrepreneurs. As the AEC looms, Thailand must prepare the groundwork for a productive, innovative and competitive future.

Haresh Khoobchandani
Haresh Khoobchandani

November 06, 2014
Managing Director of Microsoft Thailand
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Haresh Khoobchandani