Microsoft Vietnam and FPT signed a memorandum of understanding on the development of "cloud computing" in Vietnam , on May 24.

Under the MoU, the two parties aim to develop a platform for cloud-based services that include communications, collaboration data storage and infrastructure services.

Cloud computing is a new concept not just in Vietnam but internationally. Experts define it as internet-based computing where software and information are provided on demand, much like electricity is used by households.

It is expected that cloud computing will be the latest IT development because it does away with the need for heavy internal infrastructure, resources and subscription mechanisms, according to foreign experts .

At present, about 70 percent of the 40,000 people who create software at Microsoft are working on cloud products and services. That figure is expected to increase to 90 percent by 2011.

Steve Ballmer, chief executive officer of Microsoft, said most enterprises were unfamiliar with the concept of cloud computing.

"Today's announcement is the first step in bringing cloud computing to Vietnam , which is an important phase in the country's continued development of its IT industry. By working with FPT, we hope to make cloud more accessible to organisations in Vietnam and offer them a hybrid approach – a mix of cloud and on-premise services," Ballmer said.

"We will provide FPT and bring cloud computing alive in Vietnam for education and many other important applications," he said.

Nguyen Thanh Nam , CEO of FPT, said cloud computing would hasten IT development in Vietnam .

"This is an exciting project for both parties and a key milestone in our partnership," Nam said, adding that cloud computing would help ICT in Vietnam generate 22 percent of the country's total GDP by 2020./.