Software industry does well despite COVID pandemic

Though the pandemic has been devastating on economies around the world, including Vietnam, and businesses, it has created newfound opportunities for some industries, including software.

Software industry does well despite COVID pandemic

A corner of the FPT software village in the Hoa Lac Hi-Tech Zone in Hanoi. (Photo courtesy of FPT)

Leading technology company FPT Corporation reported a 20.9 percent year-on-year increase in pre-tax profits to 2,936 billion VND (127.7 million USD) in the first half of this year on a turnover of 16,228 billion VND (705.6 million USD), up 19.2 percent.

Notably, the company’s technology subsidiaries made major contributions to the results.

FPT, formerly the Corporation for Financing and Promoting Technology, is the largest information technology services company in Vietnam with its core business being information communication technology (ICT)-related services.

CMC Group, another company involved in the ICT industry, saw revenues and profits rise sharply in the second quarter of this year.

Enterprises based in HCM City’s Quang Trung Software City (QTSC) reported they continued to add new customers and markets despite the COVID-19 crisis in the country.

In the first six months of the year their combined revenues increased by 5.8 percent to an estimated 4,945 billion VND, and their total exports rose 3.4 percent to 175.9 million USD.

Speaking about the excellent results of the technology companies, analysts said though the pandemic has been devastating on economies around the world, including Vietnam, and businesses, it has created newfound opportunities for some industries.

The software industry is among the beneficiaries of the crisis, with many companies in Vietnam doing well, they said.

According to https://marketfinance.com, the software industry has weathered the COVID-19 storm reasonably well.

While stay-at-home restrictions and business closures have devastated industries that rely on physical services and in-person customers (like hospitality, arts and tourism), tech businesses appear to be relatively unscathed.

In fact, with the coronavirus increasing people’s daily screen time by a third, and speeding up businesses’ adoption of digital technologies by several years, the events of the pandemic have led some facets of the software industry to perform better than previously.

The website pointed out five ways that the pandemic has contributed to accelerating software development, the most important being digital transformation.

Digital transformation is the integration of digital technology into all areas of a business, which fundamentally changes the way it operates.

The four primary areas of digital transformation include technology, data, process, and organisational change, with each domain relying on the other to help businesses establish themselves within the digital economy.

Meanwhile, stay-at-home measures being applied widely around the world have reinforced the importance of technical infrastructure.

Many tech-focused industries support the rise of digital mediation.

But, it could not be possible without one vital activity, software development, the website said.

Analysts also pointed out other reasons why the pandemic could accelerate the development of the software industry, one of which was that the market had greater demand for technology services because of it.

While the demand had dropped significantly for most key services, there was great need for data and software, and this was expected to continue growing in the coming time, they said.

The economic slowdown has forced companies in various sectors to focus on what jobs and skills that they really need, and how these roles can be carried out safely, according to analysts. And they realise that technology plays a critical part in ensuring their workforce can work efficiently and productively from home.

The outbreak has also radically changed people’s consumer behaviour, making them used to ordering groceries online and relying on e-commerce websites and click-and-collect services.

As a result, retailers and service providers have had to set up online platforms or use apps if they want to advertise their business, and want their products and services to reach customers.

 

Retailers have also had to rely on technology to support no-contact shopping when stringent social distancing measures were in force.

Manufacturers relied on apps and digital services to ensure communication with suppliers and sellers to supply chains at home and abroad stable.

Experts also pointed out another unexpected impact of the pandemic on the software industry: the increased role of digital technology in the healthcare sector.

Digital solutions supported the healthcare system in a number of ways since the pandemic began.

Hospitals have been using software to provide contactless healthcare services for patients and create AI applications for managing staff and patients to relieve the work burden, which has been increasing at a tremendous rate as the crisis goes on.

Government healthcare management agencies use tracking technologies to control the transmission of the coronavirus, and apps to alert people about their exposure to people infected with the disease and so on.

Edge technologies, in fact, have facilitated healthcare solutions.

The pandemic has significantly pushed up digital spending at most enterprises and other entities to accelerate digital transformation despite the fact overall business spending has fallen.

Some invested in digital transformation for fear of economic conditions disrupting their business while others have to harness digital systems to enable their staff to work from home, facilitate automation to stabilise production and assist their customers.

Analysts pointed out how investments in digital transformation over the past time paid off during the pandemic, enabling economies around the world to keep running despite COVID-19.

With remote working, enterprises prevent their employees from wasting too much time on group meetings and water-cooler small talk.

With the flexible workday structure enabled by remote work, employees are able to adjust their schedules to their preferences, enabling them to generate more output in an eight-hour working day than they did in office.

Advantages of market

Nguyen Huu Le, General Director of TMA Solutions, told Dau Tu (Investment) newspaper that the US is seeing a strong development of start-ups, which requires a large number of IT engineers, thus creating a shortage.

A similar need has also been seen in other overseas markets such as Australia and Europe, whose economies are recovering strongly but without their IT workers returning to resume work after the pandemic.

This has created opportunities for IT businesses in Vietnam.

But analysts also listed certain obstacles the software industry has been facing.

One of the biggest is similar to the problem faced in many countries: a shortage of high-quality human resources.

In 2020 and 2021 the software industry achieved two to four times the growth achieved by the economy.

This has meant they have constant demand for quality human resources.

RikkeiSoft general director Phan The Dung said the economy would recover strongly soon thanks to the tremendous rate of digital transformation in various sectors like retail, e-commerce, finance and banking, online education, and healthcare.

But since the pandemic was still unpredictable software businesses should prepare for various scenarios to mitigate risks, he added./.

Source: VNA

 
 

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