Global outsourcing services have grown rapidly all over the world. India and China hold the top spots for the best offshore software development or IT Staffing services. However, according to Gartner, Inc. research, investments in these old outsourcing destinations have dropped and shifted to new alternative countries to diversify the sourcing strategies that meet the demands of multinational businesses. IT buyers are more concerned about local-language ability, cultural compatibility, reduced travel time, and same-working-day communications. With diverse choices for qualified offshore service providers, businesses could support their broader geographic footprints and establish their global delivery services wherever they are.
Among the various offshore outsourcing options, Vietnam has established itself as a dynamic and productive environment for offshore software development in the APAC area, with the goal of providing skilled and cost-effective talent pools. Vietnam’s ICT (Information and Communication Technology) revenue is reported to reach US$120 billion in 2020 with a 7.1% annual increase rate, even in damage of Covid pandemic, according to the Ministry of Information and Communications (MIC)’s report. Many firms in the United States, Europe, Australia, and Singapore now see Vietnam as a strategic alternative.
1. Offshore IT industry
The Vietnam market started to emerge as a new outsourcing site. With offshore developments including:
- Web application services
- Mobile applications
- Fintech solutions
- Artificial Intelligence
- Digital Transformation
2020 Global Software Outsourcing Rates
Because Vietnam is widely considered a high-quality software manufacturer in Asia. According to CIO magazine, software development outsourcing in Vietnam is around 90% less expensive than employing US workers. The savings would be 50% compared to China and 30% to India. In addition, Vietnam is in “ Top 10 Countries to Outsource Software Development in 2020″ by Product Coalition. Investing in the Vietnamese software sector is a smart financial decision when these two markets reach the mature stage and the cost tends to rise.
In Asia, the average cost of a new developer in Vietnam is about 7,200 to 12,400 USD per year, which is 10 – 50% less than neighboring countries like Indonesia and Singapore (17,581 – 24,658 and 38,000 – 84,500, respectively) and 5% less than the Philippines (8,300 – 12,426). Outsourcing to Vietnam helps businesses build in the most cost-effective way possible.
3. Potential Offshore Software Development Hub
According to Indexmundi, Vietnam is in the world’s “golden population” phase, with more than 65% of the population under the age of 30 in 2021. A Vietnam IT Market Report 2020 recently claimed that Vietnam is a potential outsourcing location. According to the study, Vietnam has around 400.000 IT engineers. This figure is still growing and it is estimated that over 50.000 IT students will graduate from 153 IT colleges per year, contributing to the IT skill pool. They are energetic, active, and eager to learn, which is a significant advantage of outsourcing software development to Vietnam. Young Vietnamese with better education have overcome the English language barrier. Intel, Samsung, Microsoft, Fujitsu, Foxconn, Panasonic, Bosch, Alcatel-Lucent, Amdocs, Avaya, Cisco, and Juniper Networks are among the technology giants that have selected Vietnam for both manufacturing and R&D activities.
Vietnam is recognized as a dynamic country with political stability and social harmony; its economy has developed consistently over the last three decades, despite Asian and global financial crises. To better attract foreign investment, Vietnam reformed the Investment Law and the Enterprise Law in 2020, with the objective of streamlining the foreign investment admission procedure and enhancing the business environment. It provides great incentives in the IT industry to take advantage of globalization.
4. Vietnam’s Rankings in Global Software Outsourcing Reports
According to the Global Service Location Index 2021, Vietnam ranks 6th among the top countries recognized as excellent outsourcing destinations for outsourcing services and the emergence of digital hubs. GSLI scores are based on 4 factors: financial attractiveness, people skills and availability, business environment, and digital resonance.
Source: Kearney Analysis
Vietnam is ranked #9th in TSGI Top 50 Digital Nations all over the world which increased 4 ranks compared to 2019, according to Tholons Services Globalization Index 2020
Source: Tholons Services Globalization Index 2020
According to the Vietnam Software and IT Services Association, Vietnam software outsourcing has gained more than US$9 billion in 2020, turning Vietnam into an emerging competitor of India and China.
Ha Noi and Ho Chi Minh City are consistently ranked among the top outsourcing hubs in The Tholons indexes. They are ideal and promising ICT hubs. The majority of offshore IT Staffing Services Companies are headquartered in these two locations in Vietnam, with the goal of reducing travel time when partnering with multinational corporations.
Companies have begun to take advantage of this immense potential for cost-effective and high-quality outsourcing in Vietnam. Vietnam is a trustworthy country for expanding your technological capabilities at the lowest possible cost while reducing the danger of advanced cyber attacks. Vietnam, as a prominent outsourcing location, will be ideal for firms looking to advance technologically without investing a lot of money.
5. Technological expertise
The success of the company’s project will be determined by the proper offshore software development. Vietnamese engineers’ technological skill sets range from backend to frontend, full-stack to the database, and so on, demonstrating their ability to manage many projects with different requirements. The major technical skillsets can be listed as follows:
- Backend developers: C, Java, .Net, PHP, Python, NodeJS, Ruby/Ruby on Rails, Pers, Scale, and Goland
- Database: Oracle, SQL, MySQL, PostgreSQL, MongoDB, Redis
- Mobile: Android, iOS, Xamarin, Flutter
- Full-stack developer
Each company’s skilled resources will be unique. Furthermore, these software companies also provide end-to-end projects with the latest technologies such as business analysis, project manager, UI/UX designer, Agile facilitator, etc.
Source: Vietnam IT Market Report 2020 – TopDev
Vietnamese developers, with their strong work ethic and technical skills, strive to improve themselves on a daily basis. This helps to explain why Vietnam is quickly becoming a prospective location for software development outsourcing.
6. Pandemic Resilience
According to the Forbes Author, “Even The Pandemic Cannot Rattle Vietnam’s Outsourcing Strengths”. According to the Forbes author, “Even the Pandemic Cannot Shake Vietnam’s Outsourcing Strengths.” As the rest of the world battles a pandemic, Vietnam is emerging as a bright example of societal resilience and tech fortitude. Despite the simultaneous health and economic crises that have devastated most of the world and damaged nearby offshore epicentres, Vietnamese IT outsourcing businesses have remained a constant force of productivity.
The government and citizens have a strong sense of loyalty, a commitment to plan ahead, and the ability to adapt. The general acceptance and effectiveness of the Covid-19 lockdown and mitigation approaches in Vietnam indicate a culture of society benefits, responsiveness and adaptability. Pandemic is a chance for international businesses to understand working cultures before deciding to outsource in Vietnam.
7. Resilient Business Environment
Only when the infection is securely controlled and meticulously tracked can the workers be guaranteed to work. High-skilled Vietnamese IT employees who provide offshore services have been able to maintain their work and meet demands. Businesses have pre-planned strategies for reshaping operations to fit quarantine and work-from-home requirements. Vietnam has been consistent technological support, services, and industrial partner to a globe in crisis. The virus may have stopped the rest of the world, but in Vietnam, loyalty, foresight, and flexibility were critical to controlling the virus, stabilizing the economy, and swiftly rekindling technology innovation.
Decisive action has resulted in a significant return to business productivity and technological advancement in Vietnam, making 2.9% economic growth in 2020 (according to the World Bank).
7. Reliable Offshore IT Staffing Companies in Vietnam
7.1. Kyanon Digital
Kyanon Digital is one of Vietnam’s most reliable and renowned offshore software development companies. The company specializes in providing cost-effective and quality offshore development services to customers worldwide. Since its establishment in 2012, the firm has demonstrated a track record of providing desired outcomes on challenging projects and large-scale business solutions.
Their team are highly skilled world-class professionals in a diversity of technologies including .NET CORE, NodeJS, React JS, Android and iOS/ React Native app development services, Java, Angular JS, and PHP.
With the ability to flexibly adapt to different scale projects, the company has successfully delivered digital solutions to many local and international brands. Native with types of service provision and most importantly, quality confirmed over the years.
7.2. Saigon Technology Solution
Saigon Technology Solutions is one of the significant software outsourcing firms, established in 2010 to clients worldwide with the power of the top talented Vietnam software developers in Vietnam. STS was the Award-winning Vietnam Software Development Company. They are also qualified with a competent team in technology that provides great application development services. Saigon Technology is focused on custom application development, web application development, and mobile application development to customers around the world. Saigon Technology focuses on .NET Core, Java, PHP, ReactJS, Angular, Azure, AWS, microservices, and machine learning.
7.3. Agile Tech
Agile Tech Vietnam is a quality software company founded in 2015 in Hanoi, Vietnam.. This outsourcing firm specializes in Website/Mobile apps, Blockchain services, and AI-Big Data services. Since 2015, they have accomplished more than 100 projects for clients in a variety of industries. With a team of dynamic and talented programmers, they offer technical assistance in various industries, especially with start-ups.
7.4. KMS Technology
KMS Technology is another top company in the offshore software development space. The company specializes in delivering outsourcing services for both local and international customers. KMS Technology is able to deliver the desired results specializing in software development, offshore testing services, and offshore. Besides, the company has also invested in modern technologies and IT solutions, including artificial intelligence and cloud computing.
7.5. FPT Software
Founded in 1999, FPT Software is a global software development company, outsourcing, and IT service group based in Vietnam. Clients are assisted by more than 10,000 knowledgeable employees. FPT Software delivers top-notch services in Analysis, IoT, Mobility, Cloud, Embedded systems, QA Testing, Legacy Migration, Package Implementation, Application Service, and BPO services from around the world from United States, Japan, Europe, Australia, Vietnam to Asia Pacific.