Shortage of hard drives expected to impact prices

Amid difficulties faced by the IT industry following the impact of the recent floods on various industries nationwide, The Nation spoke to executives about the effects on the IT industry, the price of products and services.

AMD (Thailand)'s country manager Chukkrit Watcharasaksilp said the company's operations have emerged unscathed from the crisis, though sales in the fourth quarter dipped due to shipment disruption and declining orders.

The floods have had a severe impact on the IT sector, the computer industry in particular. Following the disruption in the manufacture of hard drives, the chain reaction has been widespread and could be felt by manufacturers all over the world. Currently there has been an overall shortage of hard drives.

The immediate effect is that the disaster also affects buyer sentiment and has somewhat dampened demand, which is usually very high during the festive season.

"AMD expects that with prompt and efficient disbursement of economic rehabilitation budgets, the economy can be back on track, thus retaining global IT investors' confidence in Thailand," said Chukkrit.

However, as a chip-maker, there was minimal impact on AMD's business in Thailand. "What is of concern to us is the shortage of hard drives, which are universally used in the industry," Chukkrit said. The firm hopes that once the plants resume their production, the problems facing the industry would start to ease and the situation will be under control. Having said that, there is no indication of when that would happen, he said.

He added that the prices of hard drives for PCs have already shot up two to three times since October and the shop prices of computers will likely peak in the first quarter when hard-drive stocks run out. "We must understand that IT products or computers are not basic necessities, so sales tend to drop in the wake of a major disaster because household income is diverted to emergency expenses," he said

Microsoft (Thailand) managing director, Birathon Kasemsri na Ayudhaya said the firm is aware that Thailand is susceptible to similar flooding in the future, hence it is pertinent for the country to plan ahead with a better disaster management system. IT technology is one of the key components of efficient water planning and disaster management systems which can be used for future flood protection and water management for public and private sectors.

In dealing with the crisis situation, Microsoft Thailand has a contingency plan. They activated their Disaster Response protocol during the situation. The firm is working on location-based information system with their partner Ecart Studio. It allows for real time tracking of flood movement via mapping and also informs about locations of evacuation centres and places where people can seek help. Microsoft is able to identify and know who among the employees are in the flood-risk area and can contact them to provide aid.

Birathon added that Microsoft is now ready to offer a Business Continuity Plan for small and medium businesses, enterprises, and public sector organisations with its portfolio of a wide range of products and solutions for businesses to stay competitive at all times and recover rapidly in times of natural calamities.

Currently, from an IT perspective many companies are in trouble or going to be in trouble because they're using current technology and not advanced cloud technology. If they have servers in the office and software on their PCs, the flooding will bring complications in equipment and data recovery. "This is why we have been urging companies and individuals to constantly upgrade technology as new technologies allow us to mitigate the risks. Microsoft has already been actively providing cloud-computing technology through free services such as Hotmail, SkyDrive and SharePoint Online, which businesses can try out before moving entirely on to the cloud. Moreover, Microsoft also helps customers by offering a Small Windows Azure instance with a 1GB SQL Azure database for free for the first 90 days of trial," Birathon said.

"I believe that this flooding crisis will make people turn to cloud computing so that when natural disasters occur in the future, it will be much quicker and cheaper for businesses, communities, societies, and economies to recover. In times of crisis, we have to think about how to avoid the same level of damage or risk the next time because there is always a next time and technology can be a solution," Birathon added.

"As Microsoft cares for the Thai community and aims to provide technology to all at affordable prices, we have no plan to increase the prices of software products and services due to the flood. However, we are concerned about Thai businesses and plan to initiate a programme offering long-term crisis handling at special prices," the Microsoft MD said.

Normally, Microsoft has set retail prices on its products, but the prices for solutions and services depend on partners. During the flood crisis, Microsoft's partners introduced several programmes and services with special prices for customers.

Meanwhile, Eiji Kato, country manager of Epson (Thailand) said that though the massive flooding did not affect Epson directly, it has caused its sales to slow down. However, as IT products are considered important in people's everyday lives, the firm expects a quick recovery despite the domestic economic slowdown. The firm also strongly believes that every business will be up and running again in early 2012.

"We are still operating at full throttle, especially in the areas that have not been hit by the floods such as the North and the Northeastern parts of the country to meet our customers' expectations," said Kato.

He added that the company is quite certain that there will not be a hefty IT product-price hike. Talking about after-sales services, it will provide free troubleshooting for flood-damaged Epson products that are still in the warranty as well as offer complimentary replacements for units that are past repair at any Epson service centre throughout the country from now until the end of 2011.