The country’s total turnover from software services last year amounted to US$600 million, US$255 million of it from the domestic software service market alone, they said at the seminar as part the annual Vietnam Computer Electronics World Expo organized by International Data Group and the HCMC Computer Association.

The country’s total turnover from software services last year amounted to US$600 million, US$255 million of it from the domestic software service market alone, they said at the seminar as part the annual Vietnam Computer Electronics World Expo organized by International Data Group and the HCMC Computer Association.

Figures also show software outsourcing for international ICT companies generated only US$130 million, or half of the domestic market’s software revenue. The remainder was contributed by digital content, education and integrated system service, according to the HCMC Computer Association.

The software outsourcing segment has slowed down considerably over the past three years, rising at an average of 25% compared to 30%-40% in the previous years. The main reason was the global economic downturn, which put a serious impact on local outsourcing companies, with orders from traditional markets like Japan and the U.S. tumbling.

Meanwhile, software companies that ploughed carefully through the domestic soil recorded impressive growth in revenue. The top five including CSC, TMA and FPT obtained a 46% year-on-year rise in turnover from the domestic market last year, while their combined outsourcing revenue rose only 13%.

Ha Than, general director of Lac Viet Computing Corp. and member of the HCMC Computer Association, said at the seminar that these figures proved the growth of the domestic software service market.

“The local software service market remains potentially lucrative and has room for more domestic software services growth. Currently, hundreds of contracts are being deployed, especially the Enterprise Resource Planning solution,” he noted.

According to the association’s research, the local market for ERP will grow from VND750 billion last year to VND900 million this year. Accounting software, library software and e-portal solutions are promising for local companies as well.

Experts agreed that the domestic software service market would continue to grow strongly this year.
The CEO of Lac Viet, meanwhile, forecast that this year would see a strong decline in outsourcing for foreign markets.

Chu Tien Dung, chairman of the association, was concerned that local software service providers would face stiffer competition from foreign companies on their home ground.

According to Dung, previously, only foreign technology giants came to Vietnam. However, in recent times many have begun flocking to the country as the domestic market holds strong growth potential in terms of both software and hardware.

“That means domestic companies must compete stronger with them to survive,” he noted.
                                                    By Hien Nguyen - The Saigon Times Daily