vietnam-software-outsourcing-market

Over the past decade, Vietnam software outsourcing services have experienced exponential growth, attracting attention from key players in the global tech industry. Japanese companies have increasingly turned to Vietnam to outsource their IT work, drawn by the country’s skilled workforce and competitive pricing. Notably, renowned US tech giants like Intel, IBM, Cisco, KDDI, and Microsoft have also recognized the potential of Vietnam’s software outsourcing market, making significant investments in the region.

Moreover, the appeal of Vietnam software outsourcing industry extends beyond Japanese and American companies. Tech firms from other developed countries, such as Nortel Networks and Anheuser-Busch, have established offices and recruited local talent to collaborate on various projects.

In this article, we delve into the dynamics of Vietnam software outsourcing market, key players, and the factors driving its increasing prominence on the global stage.

I. Overview of  Vietnam Software Outsourcing Market: A Growing Technology Hub

The IT industry in Vietnam has experienced significant growth in recent years, making it an attractive destination for software outsourcing. In 2023, the industry reached a revenue of $1.76 billion, and is also predicted to reach $1.99 billion in 2024. This growth can be attributed to several factors, including the country’s rising reputation as a technology hub in the Asia-Pacific region and the investments made by giant tech companies. Meanwhile, with a predicted market value of $0.69 billion in 2024, IT outsourcing is the industry leader. 

Vietnam’s success in the software outsourcing market is further supported by its ranking in Kearney’s 2023 Global Service Location Index. The country secured the 7th position in this index, which evaluates a country’s software outsourcing ability based on criteria such as financial attractiveness, skills and availability, business environment, and digital resonance. 

Key data points of Vietnam’s IT landscape 

_ Number of IT engineers: 530,000 

_ Most popular programming languages: Javascript, Java, PHP, C#/.Net, Python 

_ Most popular IT jobs: Backend-developer, full-stack developer, frontend developer 

_ Most common types of IT services in Vietnam: eCommerce, Fintech, Car/food ordering, software outsourcing, business process outsourcing 

_ More than 45% of developers are in their first to junior stages of development, followed by medium developers (28%), senior developers (20%), and freshers.

vietnam-software-outsourcing-market-statistics

II. Software Outsourcing in Vietnam: Opportunities

1. Vietnam is A Financially Beneficial Outsourcing Destination

In recent years, digital transformation has motivated business owners to either embrace it or risk losing their competitive edge. Implementing digital innovations, however, is not always a cost-saving strategy. That’s why many companies choose to outsource certain parts of their work and processes to talented individuals in less-developed countries. The goal is to take advantage of the lower labor costs in these countries. 

Vietnam software outsourcing has emerged as a financially beneficial option compared to other popular destinations like China, India, and Ukraine. The cost of living and hiring labor in Vietnam is more favorable for businesses. One of the key advantages of outsourcing to Vietnam is the relatively lower labor cost. In fact, the minimum wage in Vietnam is a staggering 95% lower than that of the United States. To provide some context, let’s compare the average salaries in different countries:  

_ Vietnam: US$ 284/month 

_ India: US$ 396/month 

_ Philippines: US$ 1,620/month 

_ China: US$ 1,161/month 

_ Ukraine (minimum wage): US$ 398.627/month 

Vietnam’s competitive labor costs have been a magnet for foreign investors looking to outsource IT projects. Compared to other countries in the region, the cost of hiring skilled IT professionals in Vietnam remains relatively lower, making it an attractive destination for software development, IT outsourcing, and other tech-related services. Moreover, the government’s efforts to improve the business environment and reduce red tape have further enhanced the ease of doing business in the country 

To illustrate the cost difference in hiring talent, let’s focus on software developers, one of the most in-demand jobs. The cost of hiring a Vietnam software outsourcing developers is significantly lower than in other countries in the Asia-Pacific (APAC) and Western regions.  

Choosing to outsource software development to Vietnam, businesses can save a substantial amount of money while still benefiting from highly skilled professionals. In summary, when it comes to outsourcing and digital transformation, Vietnam offers a financially advantageous option for businesses looking to capitalize on this trend. The lower labor costs, particularly in the software development sector, make Vietnam an attractive destination for outsourcing.

2. Pool of Young and Talented Workforce

Vietnam benefits from a significant advantage in its workforce, characterized by a high percentage of young individuals with immense talent and potential. Approximately 69% of the population falls within the working-age group, providing a strong foundation for economic growth and development. The Vietnamese education system is known for its emphasis on science, technology, engineering, and mathematics (STEM) subjects. This focus enables the country to produce a highly skilled and adaptable workforce, particularly in the tech arena.  

According to a recent report by DxReports and FPT Digital, Vietnam boasts a substantial number of information technology (IT) professionals. With nearly 400,000 IT engineers and over 50,000 IT students graduating each year, the country is well-equipped with a pool of tech-savvy individuals.  

Furthermore, Vietnamese students have demonstrated their skill value in the global arena. In a survey of the best developers, Vietnam ranked in the top 10, just after countries like the United States, England, and France. Additionally, in the ranking of the best freelancers, Vietnam secured the second position, surpassed only by the United States.  

Currently, the proportion of the IT workforce to the total national labor force in Vietnam is estimated to be 1.1% out of a total of 51 million workers. However, there are plans to increase this proportion to 2% in the future. Additionally, there is a strong focus on enhancing technical quality and expertise in the coming years. 

3. Great Government Supports for IT Firms 

Vietnam software outsourcing market’s success can be attributed to several key factors, with the government’s unwavering commitment and support playing a crucial role. The government has implemented various policies and initiatives to foster the growth of the sector.  

Tax incentives have been introduced to encourage investment in the IT industry, making it more attractive for businesses to establish operations in Vietnam. Investment encouragement is another important aspect of the government’s support for the IT industry while attracting global enterprises to Vietnam.  

The government has also taken steps to streamline bureaucracy for tech-related businesses. This has made it easier for companies to navigate administrative processes and operate more efficiently. In addition to these measures, the government has focused on promoting research and development in the IT sector.  

Recent regulations in Vietnam have demonstrated the government’s commitment to protecting technology companies and their clients. Thanks to that, Vietnam software outsourcing is potential to become a global leader. Vietnam’s strong IT workforce, competitive labor costs, and business-friendly government policies have made it an attractive destination for global enterprises.   

III. Top Software Outsourcing Companies in Vietnam 

Now, let’s explore key players in Vietnam software outsourcing market

1. Adamo Software

top-software-development-company-vietnam

Adamo Software is a premier Vietnam software outsourcing company. They offer a wide range of high-end software development services to help enterprises gain a competitive edge and achieve positive ROIs, focusing on industries such as Travel & Hospitality, Digital Healthcare, Fintech Solutions, Media and Entertainment, and eCommerce.  

With over 120+ successful projects worldwide, Adamo Software has worked with companies like Air Canada, MadeComfy, Magpie Travel, MMK, and others.  

Services offered by Adamo Software include:  

_ Mobile App Development 

_ Web-based App Development 

_ Dedicated Development Team 

_ AI Development Services 

_ DevOps Consulting 

_ Blockchain Solutions 

These services cater to Adamo Software has achieved several notable milestones and received recognition for their expertise and professionalism. 

_ ISO 27001 certification 

_ ISO 9001:2015 certification 

_ Sao Khue Award for top IT outsourcing companies in Vietnam 

_ Recognition as a top company by Clutch, GoodFirms, and the Manifest. 

Clients of Adamo Software benefit from their extensive knowledge of the market, advanced technical skills, a delivery model focused on quality, and a deep understanding of the latest technological trends. The company is committed to providing forward-thinking solutions that are delivered on time and offer great value 

2. KMS Solutions

KMS Solutions specializes in providing IT solutions and services tailored specifically for banking and financial service corporations in the Asia Pacific region. They mainly focus on fintech industry with custom built digital solutions such as business technology consulting, BankTech, digital web apps and platforms, … 

As part of the KMS Group, which also includes KMS Technology and KMS Healthcare, KMS Solutions brings over 14 years of experience in successfully digitalizing businesses, particularly within the BFSI industry. They have successfully assisted over 250 enterprises in developing software solutions across various sectors, including banking, insurance, and financial services. Some notable clients include ACB, DiscoveryMarket, and Axi 

3. FPT Software

FPT Software is a subsidiary of FPT Corporation, a global leader in technology and information technology services and solutions based in Vietnam. FPT Software is known for its expertise in digital transformation and offers a wide range of world-class services, including smart factories, digital platforms, RPA, AI, IoT, enterprise mobility, digital product development, cloud computing, AR/VR, business applications, application services, and managed services.  

The company has a strong customer base, having served over 1,000 customers worldwide. Notably, 85 of these customers are Fortune Global 500 organizations spanning various industries. 

4. NashTech

NashTech is an IT outsourcing company in Vietnam that provides top-quality services to clients worldwide. They specialize in customer-focused solutions tailored to meet each client’s specific needs.  

NashTech offers a range of outsourcing services, including Digital Transformation, Software Development, and Technology Consulting Services. They have over 23 years of experience with 21 offices around the world, focusing on harnessing the power of data, AI, modernizing core, … 

5. TMA Solutions

TMA Solutions is a prominent player in the Vietnam software outsourcing industry, with over two decades of experience. They are known for delivering high-quality software outsourcing services to clients worldwide.  

TMA offers a comprehensive suite of software development outsourcing services, including custom software development, application maintenance, and testing and quality assurance. The company has a strong presence in six overseas locations, including the USA, Canada, Germany, Japan, Australia, and Singapore  

6. CMC Global

CMC Global is a leading IT outsourcing company in Vietnam that specializes in providing tailored and top-notch services such as Cloud Migration, Custom Software Development, RPA Service Implementation, and Cloud Service Management.  

With a track record of over 200 successful projects, CMC Global is known for its team of more than 3500 skilled IT professionals and its ability to handle large-scale software development endeavors.

A more detailed list on Top 11 Software Outsourcing Company in Vietnam 2024

IV. Final Thoughts

As businesses across the globe continue to navigate the rapidly evolving digital landscape, Vietnam software outsourcing market stands as an enticing destination for organizations seeking cost-effective, high-quality, and technologically advanced solutions.  

With its skilled workforce, favorable business environment, and commitment to excellence, Vietnam is poised to continue its upward trajectory in the IT outsourcing industry. By leveraging the country’s strengths, organizations can unlock endless opportunities and gain a competitive edge in today’s fast-paced business world. 

If you’re seeking a trustworthy tech partner in Vietnam for your software development projects, look no further than Adamo Software. As a premier tech powerhouse based in Vietnam, we offer top-notch solutions to clients around the world.  

Whether you need assistance with digital transformation or require Agile engineering expertise, we have the knowledge and experience to meet your needs. Don’t hesitate to reach out to us for more information on how we can help you achieve your tech goals.  

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