VietNamNet Bridge – The export growth rate has decreased, a lot of firms have shut down or merged into others. Does this mean that Vietnam’s software industry has been driven into a corner?

The 2012 White Book showed that Vietnam’s software industry gained the turnover of $1.17 billion in 2011, which meant the annual 10 percent growth rate. Meanwhile, the figures were much higher for digital content, 25 percent, and hardware industry, 101 percent.

The growth rate was even more “modest” in 2013, at 3.1 percent, the lowest rate since 2005, when Vietnam began implementing its strategy on developing the software industry and Internet.

The reports showed that exports brought 1/3 of the total revenue of the software industry. However, since 2009, a lot of IT firms have seen the sharp falls in the turnover from the software outsourcing, which has forced them to focus on the domestic market. Many of them have been living on developing ERP (enterprise resource planning), while a lot of small firms had to leave the market.

Some analysts have warned that they can see the signs of the software industry development slowdown. Ngo Hung Phuong, CEO of CSC Vietnam, commented that the Vietnamese software industry seem to be unable to grow further, because it cannot make breakthrough to upgrade itself to a higher level like India.

Meanwhile, Nguyen Manh Dung, Chief Representative and Director of CyberAgent, a Japanese investment fund in Vietnam and Thailand, does not think so. He believes that Vietnam’s software industry is simply getting a transfer.

The transfer is necessary for the industry to get adapted to the new circumstances, when SMAC (social - mobility - analyst – cloud) is prevailing.

With the boom of social networks, smart phones and smart mobile devices, Vietnamese software firms now strive to create the software apps to be integrated on personal devices, from tablets, notebooks to smart phones.

“Vietnam is now in the first stage of the technology revolution,” commented Lam Phuong, Technology Director of FPT, the Vietnamese biggest technology group.

A report of KPMG showed that in 2012, the total turnover from cloud computing services reached $109 billion, while the figure is expected to soar to $206 billion by 2016.

For a long time, Vietnam’s familiar products, including apps, embedded software, system integration, software testing have been highly appreciated by clients. Meanwhile, other services such as app and game development for smart phones, tablets, e-commerce website development or testing are believed to have great development potentials in the time to come.

This is why the big guys like FPT Software, TMA Solutions, CSC Vietnam, Global Cybersoft, CMC Soft all have gather their strength on researching and developing the software for mobile devices.

Dung believes that Vietnamese big software firms now have big opportunities to develop. Foreign groups nowadays tend to choose the partners which have large production scale which can satisfy the strict requirements in the new development stage.

That is why some Japanese firms have set up independent units or development centers in Vietnam so as to take initiative in their product development strategies.

DNSG