VIETNAM SOFTWARE OUTSOURCING IN 2016

VIETNAM SOFTWARE OUTSOURCING IN 2016

The Growth of Vietnam Software Outsourcing in Recent Years

Offshore software development nowadays is becoming a smart approach of global companies. In 2016, India and China are still positioned as the leaders of software outsourcing industry.  In spite of their dominance in market share, Vietnam is considered as an emerging software outsourcing destination.

The Vietnam software development market is recognized as a high quality and low price software development market. Vietnam software outsourcing services are about 90% cheaper compared to Western rivals and 40% cheaper compared to competitors from India and China.

According to a report from Vietnam Software Association (VINASA), in the IT home market, there was a decrease in the number and scale of clients (in two segments: state-owned agents and private businesses) because of budget cuts for IT services. Meanwhile, the export market’s growth rate increased by 30 to 40 percent per annum, and the US and Europe’s growth rates were stable at 20 to 30 percent. Some domestic software developers are optimistically expecting that North America will become the second largest Vietnamese outsourcing market, after Japan.

Vietnam was ranked among the top 10 most attractive software outsourcing spots of the Asia- Pacific region by Gartner, a reputed US market researcher.

The Advantages of Vietnam Software Outsourcing

Many multinational electronics corporations such as Intel, Samsung, LG, Renesas, Fox, Canon, and, Panasonic have already been optimistically growing their manufacturing operations in Vietnam for decades. Foreseeing the market’s potential, HP, CSC, Alcatel-Lucent, Cisco, Avaya, NTT, Toshiba, NEC, Panasonic, Sony, Sharp, Hitachi, Boeing, and Deutsche Bank also have Research & Development to further investigate the Vietnam market.

Vietnam is seen as a large pool of talent and an emerging high tech center. Every year there are about 40,000 graduates, from 290 universities across the nation, who are well trained and equipped with the technical skills needed for the industry. The flourishing of skilled manpower and low labor costs contribute to a competitive advantage with regard to service quality and price.

In addition to the stable and secure economy, the Vietnamese government has also established tax incentives, encouraged heavy high-tech zones, built software parks, and implemented human resource development strategies.

Some Challenges of Vietnam Software Outsourcing

In spite of Vietnam’s favorable conditions for IT product development and outsourcing services, some domestic IT firms are facing financing shortages and poor market strategies. To some extent, IT engineers have not satisfied the international market demands.

The Ministry of Information and Communications is looking for solutions for the developing IT sector by promoting competition; building mechanisms to support IT and IT startup companies; offering more FDI for IT in general, and particularly for software outsourcing; and workshops for business matching between Vietnamese and IT foreign companies.

Top 10 Vietnam Software Outsourcing Companies

According to statistics from Vietnam Software Association (VINASA), Vietnamese companies specialized in outsourcing and software solutions have revenue accounting for a high proportion of total sales, more than 1/4 of software industry and digital content in 2015. The top 10 companies in Vietnam software outsourcing are:

1. FTP software

2. TMASolutions

3. Harvey Nash Vietnam

4. Global Cybersoft Vietnam

5. KMS Technologies Vietnam

6. LogiGear Vietnam

7. Phu Si Computer Network (FUJINET)

8. Sunrise Software Solutions

9. IVC / ISB Vietnam

10. DEK Technologies Vietnam