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VN eyes North American outsourcing market

Update: October, 22/2016 - 09:52
Domestic software developers are expecting that North America will become the second market for Vietnamese outsourcing companies, after Japan.— Photo ictnews.vn

HÀ NỘI — Domestic software developers are expecting that North America will become the second market for Vietnamese outsourcing companies, after Japan.

To seek a firm foothold in this market, it requires close co-operation and mutual support between local software businesses.

In recent years, the Vietnamese software outsourcing industry has developed certain advantages to become one of the leading software outsourcing nations. In a speech at a workshop on Smart Society, which took place in Hà Nội recently, Nguyễn Thanh Tuyên, a high official of the Ministry of Information and Communication said Việt Nam remained among the top 10 outsourcing spots in the Asia-Pacific region, as ranked by Gartner’s, a reputed US market researcher.

This year, Tholons Inc Consultancy continues to place HCM City and Hà Nội among the top 100 most attractive destinations in the world. HCM City ranked 18th and Hà Nội stood at 19th, in terms of software outsourcing. 

Tuyên said the software export market remained concentrated in Japan, North America and Europe. Some software developers, such as FPT software, have expanded into new markets, including Myanmar and Bangladesh.

Over the last five years, the Vietnamese software export market has achieved high growth rates of between 30-40 per cent per year, thanks to the stability of the political situation and rapid economic development, thus turning Việt Nam into one of the most attractive locations for software outsourcing.

Việt Nam has become a favorite partner of Japanese companies, with a rapid increase in outsourcing orders and, since 2013, the country’s software developers have overtaken India in second place. The US and EU markets still obtained a fair growth, from 20-30 per cent per year, according to a Vietnam Software Association (Vinasa)’s representative.

Industry insiders said North America was a large-scale multi-billion dollar market, but it required very high demand and was a highly competitive market. Local software developers cannot wait for clients from this region, thanks to advantages of cheap outsourcing prices, in comparison with China, the Philippines and India.

Challenges ahead

Despite the fact that Việt Nam has favourable conditions to develop IT products and services, Tuyên noted that the country’s IT firms were facing shortages of financing and poor market strategies. Also, IT engineers fail to meet the demands of international labour markets.

In the near future, the Ministry of Information and Communication will seek solutions to assist developing the country’s IT sector by promoting competition and building mechanisms to support IT and IT start-up companies, offering investment promotional programmes, and workshops on business matching between Vietnamese and foreign IT firms.

Chairman of Vinasa, Trương Gia Bình, said that from now until 2020 Vinasa would continue to actively seek business partners abroad, because Việt Nam remained a small market.

Nguyễn Quang Minh, director general of HanelSoft, said criteria in terms of service quality, highly qualified manpower and diversified and intensive technology and cost savings were key to keeping traditional partners and clients from high demand markets, such as Japan and the US.

Minh said Việt Nam had seen that most software developers in Hà Nội were involved in software outsourcing for Japan and partners from the US often found software developers in HCM City.

Recently, Global Cyber​Soft - one of the leading software outsourcing companies in HCM City, set up its new office in Hà Nội. Also, the municipal Department of Industry and Trade recently conducted an overseas tour for software companies in Hà Nội to seek partners in North America.

Trương Gia Bình said Vietnamese software developers wanted to reach global markets, but they could not be alone and should have strong co-ordination with each other, which remained a problem for Vietnamese IT firms. — VNS

 

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