Vietnam IT Industry Finding the Key to Success

Vietnam IT Industry Finding the Key to Success

2003 could be considered a successful year for the Vietnam information technology (IT) industry with impressive results. The industry attained US$120 million in value from the software sector, an increase of 41 per cent, which was driven by an increase of 38 per cent in the domestic market and 50 per cent in foreign markets. The number of workers in the industry saw an increase of 50 per cent with a productivity of US$10,000 per worker. The export value of hardware reached US$700 million, an increase of 27 per cent.

Progress in the software industry

An outstanding feature of the software industry is that the number of workers in the industry increased from 8,000 people to 12,000 people, who created a product and service value of US$120 million. Of this figure, US$30 million came from outsourcing contracts and the remainder from the domestic market. According to the General Department of Customs, the value of imported software via official ways was very low, somewhere between US$7 million and US$10 million in 2003.

Outsourcing contracts and software export in 2003 was indeed encouraging. Currently, the implementation of outsourcing contracts with Japanese companies has become a key issue as many software enterprises from Japan and Vietnam have begun to explore markets and seek partners. However, the number of software producers with revenues of at least US$1 million remains, but account for some of the top ten enterprises in Vietnam.

In 2003, six Vietnamese software producers and seven companies from Japan set up the VIJASGATE software joint venture. This is an important gate for Vietnamese software producers to enter through into the outsourcing market of Japanese enterprises in the coming years.

Currently, Vietnam has three software enterprises granted with CMM Certificates (Level 5 for FPT Software, Level 4 for PSV and Level 3 for SilkRoad). The number of software and service enterprises granted with the ISO 9001 was at 12 enterprises in 2002 and 14 in 2003, bringing the total number of enterprises granted with the ISO 9001 to 32.

Warming up of the hardware industry

Foreign-invested enterprises play a dominant role in development and export. Fujitsu, for example, maintains an export value of more than US$400 million per year (US$423.6 million in 2003). It is followed by Canon, which began operations in May 2002 in the Thang Long IP (Hanoi). In 2002, Canon earned US$24.5 million, increasing to US$200 million in 2003. The company is expected to invest US$100 million more in 2004 to expand its production in Vietnam.

Vietnam has about 30 enterprises specialising in trademarked PC assembly. However, only CMS and FPT Elead have occupied the top positions. In 2003, the two enterprises marketed about 100,000 PC units. After one year, the number of PCs with Vietnamese trademarks caught up with the number of imported PCs.

• Song Phuong