While Vietnam has clearly emerged as analternative to China for manufacturing work, the country is alsoincreasingly showing up on the radar screen of companies seeking analternative destination for outsourced IT work and outsourcing ingeneral, reported a US newspaper.
“In fact,Vietnam is well poised to position itself as an alternative to Chinafor both IT and outsourcing work and as a cost effective alternative toIndia for certain niche areas such as programming. Hence, look forVietnam to emerge as Asia’s newest and next IT and outsourcing tiger,”the paper said.
Although Vietnam has felt the pinch from the global economic crisis andthe slowdown in American demand for imports, the country’s economicfundamentals and the potential for its IT services and outsourcingindustry remain strong.
IT is considered to be one of the fastest growing industries in Vietnam. From 1995 until the end of 2008, the country had attracted 332foreign-invested IT projects worth 2 billion USD. Moreover, IT spendingis predicted to grow at a compounded annual growth rate of 10.5 percentbetween 2008 and 2013 and reach 3.51 billion USD in 2013, according tothe Outsource Portfolio.
While IT services often account for a significant part in the totalrevenue turnover of IT industries in other countries, they remaininsignificant in Vietnam . In 2008, one media source estimated that ITservices reached a turnover of only 2 billion USD while a second mediasource quoted 648 million USD or 0.5 percent of GDP for the entiresoftware and IT services industry.
Multinational firms such as Accenture, Alcatel-Lucent, Anheuser Busch,Bayer, BMG, BP, Cisco, Critical Path, Daiwa, Flextronics, Fuji, HarveyNash, Hitachi, IBM, Intel, Juniper Networks, Merrill Lynch, Microsoft,NEC, Nortel Networks, NTT, Oracle, Sony, Spacebel, Toshiba and Unisyshave all reportedly outsourced IT related work either directly or viathird parties to Vietnam.
However, the paper said as in many emerging markets, the general IT andoutsourcing industry in Vietnam is highly fragmented. The countrycurrently has around 10,000 firms licensed to provide IT services butonly about one-third of these firms are actually operating. And findingand retaining qualified staff can be difficult in the country.
The paper concluded that while Vietnam is more known for exportingbasic commodities and as a manufacturing alternative to China, itslarge and well educated population combined with a low cost environmentmakes the country an attractive destination for foreign IT andoutsourcing firms./.
“In fact,Vietnam is well poised to position itself as an alternative to Chinafor both IT and outsourcing work and as a cost effective alternative toIndia for certain niche areas such as programming. Hence, look forVietnam to emerge as Asia’s newest and next IT and outsourcing tiger,”the paper said.
Although Vietnam has felt the pinch from the global economic crisis andthe slowdown in American demand for imports, the country’s economicfundamentals and the potential for its IT services and outsourcingindustry remain strong.
IT is considered to be one of the fastest growing industries in Vietnam. From 1995 until the end of 2008, the country had attracted 332foreign-invested IT projects worth 2 billion USD. Moreover, IT spendingis predicted to grow at a compounded annual growth rate of 10.5 percentbetween 2008 and 2013 and reach 3.51 billion USD in 2013, according tothe Outsource Portfolio.
While IT services often account for a significant part in the totalrevenue turnover of IT industries in other countries, they remaininsignificant in Vietnam . In 2008, one media source estimated that ITservices reached a turnover of only 2 billion USD while a second mediasource quoted 648 million USD or 0.5 percent of GDP for the entiresoftware and IT services industry.
Multinational firms such as Accenture, Alcatel-Lucent, Anheuser Busch,Bayer, BMG, BP, Cisco, Critical Path, Daiwa, Flextronics, Fuji, HarveyNash, Hitachi, IBM, Intel, Juniper Networks, Merrill Lynch, Microsoft,NEC, Nortel Networks, NTT, Oracle, Sony, Spacebel, Toshiba and Unisyshave all reportedly outsourced IT related work either directly or viathird parties to Vietnam.
However, the paper said as in many emerging markets, the general IT andoutsourcing industry in Vietnam is highly fragmented. The countrycurrently has around 10,000 firms licensed to provide IT services butonly about one-third of these firms are actually operating. And findingand retaining qualified staff can be difficult in the country.
The paper concluded that while Vietnam is more known for exportingbasic commodities and as a manufacturing alternative to China, itslarge and well educated population combined with a low cost environmentmakes the country an attractive destination for foreign IT andoutsourcing firms./.
