Software Firm Unlocks Key to Wealth

Change in business model, and widening of markets in the region expected to push up revenue to Bt1 billion by 2015

Featured in the TECHNOLOGY Section of The NATION Newspaper May 1, 2012 issue, written by Asina Pornwasin

 

Wealth Management System, a local software firm, has set itself the target of achieving Bt1 billion revenue by 2015, a more than six times growth from this year’s expected revenue of Bt150 million.

To achieve the goal, the company will shift its business model from licensing to software as a service (SaaS) under the cloud service model, and expand its market from Thailand to the Asean region.

Somkiat Chinthammit, chief executive officer of Wealth Management System, said the company plans to expand its business with the cloud service model to allow small and medium enterprises (SMEs) as well as individuals to use its software services over the Internet without having to purchase the software.

The company’s core software systems, called Bonanza Family, involve three main financial activities – asset management, treasury management, and risk management. Its flagship product comprises almost 10 modules that have been delivered to large corporates with the licensing model.

This year, he added, the company will focus more on assisting SMEs to benefit from its software solutions by providing them Bonanza software as a service. Instead of needing to buy the total solutions Bonanza software worth about Bt60 million to Bt70 million, users can pay for only Bonanza software modules that they use. Somkiat calls the company’s software service model Wealth 1.5 Model, which the company started last year.

“Introduced last year as trial period, we did not gain significant revenue from the SaaS model through cloud computing service. Of our revenue last year, less than one per cent came from this model. But this year, we will focus on it. We plan to gain around 5 per cent of Bt150 million as our total revenue from this model,” said Somkiat.

With the cloud service model of software, he added that this year the company will be more active in markets outside Thailand. The company will not sell software licences to overseas customers anymore, but will instead offer software service through the cloud.

“This model will make it easier to tap new customers and provide service and support remotely. We can save a lot of operation cost while we can increase our chances of winning over more customers,” said Somkiat.

The company has also introduced a software service for individuals called Wealth 2.0 model. Under this model, the company has launched a new service called “Wealth Magik” to allow individuals to manage their wealth online free of charge. Under Wealth Magik, there is a set of modules of Bonanza Family provided for people to use to manage their wealth.

Wealth Magik, expected to be the next flagship of the company, aims to tap the Internet population not only in Thailand but also throughout the Asean region.

“We just introduced this new service. It will be our main source of revenue in the future. We will provide it free of charge with standard features. Users have to pay for the premium services with extra features. They will pay a fee as they use monthly or annually. We need at least 100,000 users for Wealth Magik for it to be significant for us. The revenue from Magik will start to be realised by the end of next year,” said Somkiat.

It aims to have at least 10,000 Thai users of Wealth Magik by the end of this year and increase the number of users to 100,000 by 2015.

In three years, the company’s revenue is expected to reach Bt1 billion of which 70 per cent will come from the local market through the new market segment, both of SMEs and individual users, while the other 30 per cent will come from the Asean market.

“By 2015, the Wealth 1.5 model will gain majority of revenue, of about Bt600 million, while we expect to have Bt200 million from the licensing model and another Bt200 million from individual wealth management software service,” said Somkiat.

He added that the SaaS model through cloud service will  surpass the software licensing model. The model of software business the company has followed for 17 years is expected to generate revenue of about Bt150 million by the end of this year. But with SaaS through cloud service, the total revenue is expected to be Bt1 billion in the next three years.

After being well-established as a software firm that provides software solutions for Thailand’s financial sector for 17 years, it has already gained more than 50 per cent of market share. Currently, it has more than 50 large enterprises as customers. For example, the Social Security Office’s fund of about Bt800 billion to Bt900 billion has been managed by Bonanza for seven years. The Government Pension Fund’s Bt600 billion has been also managed by Bonanza since the year 2000.

“We are now well established among large financial corporations in Thailand. We have more than 50 per cent of market share. Our competitors are foreign software companies. We are the only Thai software firm in this market,” Somkiat said.

He said the company’s sustainable growth comes from its standard of software development. Recently, the company was certified as CMMi Level 5 version 1.3, the latest version of CMMi Level 5. It is the second Thai software company to get CMMi Level 5 version 1.3 after CT Asia, and is the 46th software firm around the world to achieve this standard.

“Achieving the international standard helps us improve our software development. It also makes it easier for us to do business in overseas markets,” said Somkiat.

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