Thailand is quietly becoming a software and particularly animation center where Western companies outsource work for high quality software and animation at economical prices. Runckel & Associates has helped on several software projects and has found Thailand often a good choice for design, animation and certain software projects that play to Thai ease of contact and to quality work by a number of relatively small but growing companies. Although lacking the size or ease of recognition of an India, Thailand has built a small stable of successful companies in this industry.
Below are some recent success stories from small but growing Thai companies in this industry:
Bunrak Saraggananda - Chairman, Magic Software
In addition to his roles as vice president of the Asia-Oceania Computing Industry Association (ASOCIO) and the Association of Thai ICT Industry (ATCI), Bunrak Saraggananda of Thailand also operates Magic Software, a small software outsourcing firm dedicated to converting critical data from obsolete computers to modern formats and programs. Explains Bunrak to the Bangkok Post, “You would be surprised at the number of people running their operations off ancient 80486 machines. Today they are forced to upgrade not because of any technical need, but because these systems are failing and modern hardware cannot run these ancient programs.”
Magic Software steps in to reverse engineer the often proprietary software and bring it up to modern standards, using Microsoft’s .Net framework if possible. With only six “high-value” programmers and thirty others on contract, Magic Software only performs the high value portion of each project, outsourcing data entry and screen design to programmers in Myanmar. Bunrak sees Myanmar as an opportunity, having low-value assignments performed at one tenth the cost of Thai programmers, leaving local talent free for more demanding tasks. When asked about competition from Myanmar, Bunrak remarks that “there is little chance of them competing with us directly, as their programmers and project leaders cannot get visas due to international sanctions.”
Bunrak isn’t optimistic about the idea of a Thai content industry, citing a lack of cultural understanding as a barrier of entry into foreign markets. Instead, Bunrak will focus on specific steps of the Business Process Outsourcing (BPO) chain, while advising that Thailand develop a niche and specialize.
Raj S Joshi - President and CEO, Itorama Consulting
Breaking the trend of Indian IT talent going to the West, Raj S Joshi of Itorama has based himself in Bangkok, Thailand with offices in New York and Bangalore. His customers hail from the US and EU, including Accor, Western Union and Michelin. Joshi thinks Thailand’s creative strengths, especially in multimedia and design, are formidable and the IT outsourcing market is not yet saturated in Asia. While he admits the easier tasks have already been outsourced, he claims only 8% of a possible 30% of computer tasks have been outsourced, and that the fundamental nature of what is being outsourced is changing. Instead of focusing on individual tasks, Joshi aims at growing by taking over entire business processes.
When asked about competition between Thailand and India, Joshi stresses cooperation rather than competition and that international standards like CMMI and ISO are allowing large projects to be better broken up and shared. Comparing the two countries, he notes that Thailand lacks giants in the IT field like India’s Wipro or Infosys and sees Itorama filling that role while he expands both his local sales and his offices abroad.
Richard Green - CEO, NoMagic
A major player in the Universal Modeling Language (UML) field, NoMagic competes with giants Rational and Borland, but while almost all sales take place in the United States, unlike their competition NoMagic is based in Eastern Europe and Bangkok, Thailand. NoMagic considered India, China and Singapore when deciding where to locate, but ultimately chose Thailand, which has the perfect combination of technological and economic infrastructure, local talent and competitive wages. Green cites factors such as reliable electricity and roads as well as more technical aspects like Internet access in making his decision.
“Nobody likes to fix somebody else’s problems, they want to create. When you’re fixing somebody else’s mistakes, you never get the satisfaction,” comments CEO Richard Green to the Bangkok Post, when describing his company’s business plan.
When asked what could use improvement, Thailand’s rigid educational system and difficulties obtaining visas for foreign workers topped the list. Fast Internet access directly to Europe as opposed to through the US was also a priority. Despite it’s shortcomings, however, Thailand still stands out as a superior place to do business and Green singled the Board of Investment (BOI) out for praise in helping his company get started.
Copyright, 2005 © Runckel & Associates
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