The global software and IT services market is worth more than 1,800 billion USD, of which more than 1,000 billion USD is for businesses providing software services and IT services. This is a wide-open opportunity for Vietnamese businesses.
But, along with opportunities come many challenges for IT businesses that want to conquer world markets.
There are about more than 1,500 Vietnamese digital technology enterprises going abroad with an estimated revenue from the foreign market currently of about 7.5 billion USD, contributing about 80% of the total revenue of Vietnamese digital technology enterprises.
According to Minister of Information and Communications Nguyen Manh Hung, in the context of the international market still having much potential and Vietnamese enterprises growing stronger, bringing digital technology enterprises abroad helps enterprises expand the market, increase revenue and affirm the prestige of the brand of digital technology products made in Vietnam, affirming Vietnam's position on the world digital technology map and contributing value to the industry.
In the four component indexes that make up the main index, including: Financial attractiveness; Human skills and availability; Business environment and Digital resonance (digital transformation activities), Vietnam continues to be highly appreciated in the Financial attractiveness and Digital resonance indexes.
In 2023, the leading enterprise in the information technology industry, FPT, for the first time reached the milestone of 1 billion USD in information technology services from foreign markets, officially joining the billion-dollar enterprise club globally. Other enterprises also grew very high from 20-40%, even VMO, Rikkeisoft's revenue from foreign markets increased by 50-60% compared to 2022.
Software production revenue in 2023 will reach about 4.3 billion USD, of which export revenue will be about 4 billion USD, contributing up to 98% of the added value for Vietnam. Meanwhile, the growth potential of information technology in the world market is still very large and increases steadily every year.
Deputy General Director of FPT Software and Director of FPT Japan Do Van Khac said that the Japanese market is still too large and has potential for all Vietnamese IT service enterprises. Other Vietnamese IT enterprises in Japan can absolutely develop and be much more successful if they have a long-term view, train and build resources, especially Japanese-speaking engineers.
Assessing the potential of the Japanese market, Ms. Nguyen Thi Thu Giang, Vice President of the Vietnam Software and Information Technology Services Association (VINASA), said that Vietnam has become a major partner in the field of software and information technology services with Japan. Among the nearly 500 enterprises providing information technology services in this market, there are about 10 large Vietnamese enterprises with a scale of about 1,000 employees such as FPT, Rikkeisoft, Luvina, Fujinet, VMO, VTI....
"Previously, it took us 2-3 years to get a contract with a Japanese customer, but now that has been shortened, and some companies have signed contracts right away at trade promotion programs," said Ms. Nguyen Thi Thu Giang.
The US market has a lot of potential but is also a challenge for Vietnamese businesses, requiring Vietnamese businesses to find a "niche market" to reach customers.
Regarding the European market, according to Ms. Giang's analysis, costs in Europe are expensive, so national trade promotion programs here are organized intermittently. Vietnam's presence in European countries is not large, so promoting IT business brands is still limited.
The strength of Vietnamese enterprises in the Southeast Asian market is currently selling solutions to customers. FPT is currently selling very good solutions in the region and when this enterprise is successful, VINASA will sit down with member enterprises to discuss and "hit" this market together.
The emerging potential market of Korea also has more than 20 Vietnamese enterprises investing directly. A typical success of Vietnam is that CMC Group has cooperated with Samsung, serving the Samsung ecosystem in Vietnam and Korea and is continuing to expand its operations in Japan, opening to the US market.
Or FPT, which is currently providing world-class solutions and services to many leading Korean enterprises such as LG Group, Shinhan Bank, Shinsegae I&C. This group also aims to continue to maintain a growth rate of over 50% in 2024 in the Korean market and plans to open more offices in many key technology areas such as Gangnam and Pangyo.
Vietnam and the Asian region are experiencing a dramatic increase in the demand for digital transformation and green transformation. Businesses and organizations are looking to leverage technology to improve performance and create new value. In that context, the Vietnamese Government has outlined the direction for digital transformation by 2024: Developing a digital economy with four pillars of information technology and communications industry, digitizing economic sectors, digital governance, digital data , creating momentum for rapid and sustainable economic development. The automotive industry is changing rapidly and Vietnam has an extremely important advantage: human resources.
FPT Chairman Truong Gia Binh said that in order to exploit the potential of digital transformation - green transformation, creating dual development in both digital economy and green economy, Vietnam needs to pioneer the development of the following fields: Artificial Intelligence, semiconductor chips, smart electric vehicles in digital transformation, green transformation. It is necessary to focus human resources and finance on these key technology fields.
"AI, semiconductors and automotive technology are the three directions that FPT's technology sector will focus on. In all three directions, FPT has a foundation accumulated over many years. FPT has a large team of AI experts, built the Quy Nhon Artificial Intelligence Center and participated in the world AI alliance initiated by IBM and Meta. FPT currently has about 9,000 AI certificates issued by NIVIDIA and will strive to reach tens of thousands of certificates in the future.
In the semiconductor chip field, FPT Semiconductor is the first Vietnamese company to design commercial chips, with orders for 70 million chips for Japan, Korea, Taiwan (China)... and cooperates with many organizations and companies in Japan and the US.
In addition, the group has a team of 4,000 experts in the field of automotive software technology and many partners and customers are big global brands, establishing FPT Automotive company. To achieve the big goal, FPT thinks the most important thing is people, happiness and we use AI to help people, life is happier", Mr. Truong Gia Binh affirmed.
Commenting on the future of Vietnamese IT enterprises, VINASA General Secretary Nguyen Thi Thu Giang said that artificial intelligence is a trend applied to solutions for customers today, a potential land for enterprises to exploit.
Vietnam has a "door" in the semiconductor sector, but the opportunity is quite narrow and Vietnam only has a short period of time to establish itself in the position of the world semiconductor industry. "If Vietnamese enterprises choose a new niche that other countries are starting with, such as AI chips, combined with our abundant human resources, it will be a great opportunity and fortune for the industry," Ms. Giang commented.
VINASA has established the Vietnam Semiconductor Industry Committee to gather domestic and international experts to discuss finance, policy, human resource preparation, strategy, and cooperation models in the semiconductor industry. On August 1-5, VINASA will join a number of units to organize a semiconductor "dien hong" conference in Da Nang, gathering 100 experts and leaders of domestic and international organizations to discuss cooperation models between the parties.
The automobile sector is also a fertile ground for businesses to develop together. The trend of Electronic EV-cars, powered vehicles, and self-driving vehicles opens up great opportunities for Vietnamese businesses. Ms. Giang said that currently, Japanese partners are discussing with Vietnam to cooperate in developing automated cars and self-driving vehicles.
Regarding the provision of digital solutions related to green transformation, many businesses have not seen the opportunity and have not invested in developing solutions. If Vietnamese businesses seize the opportunity in time, this is a great opportunity not only for Vietnam but also for the world.
“VINASA is guiding businesses to see opportunities. In terms of policy, the Government needs to encourage businesses to take advantage of opportunities to do research, develop, and provide application solutions for green transformation areas. This is a green industry, with high intellectual content, fast growth, and bringing in large foreign currencies for Vietnam, so it needs investment to promote trade to the world,” said Ms. Giang.
According to the Vietnam Association of Software and Information Technology Services (VINASA), if in the first stage of development in 2003, the Vietnamese software industry only had a revenue of 500 million USD with about 5,000 employees, then by 2022, this industry will reach a revenue of 148 billion USD with a total workforce of over 1.2 million people, more than 300 times in revenue and 240 times in workforce size.
In the Japanese market, information technology enterprises have also grown strongly in both quality and quantity. The technological level of Vietnamese workers has also improved significantly, from only doing simple steps such as coding, testing..., to now Vietnamese enterprises can participate in stages from research, design to implementation of digital transformation projects, applying new technologies such as Cloud, Big Data, AI, Blockchain, VR/XR.
According to Ms. Nguyen Thi Thu Giang, Vice President and General Secretary of VINASA, in the past, Vietnamese software enterprises mainly did outsourcing for export. However, in the past 4-5 years, outsourcing enterprises have accumulated resources and experience working for the international market to develop their own solutions to serve the market and sell the solutions. Currently, nearly 100% of companies working with the export market have an R&D (Research and Development) department, specializing in research, creating innovation and developing products to suit customer requirements.
Currently, the strength of Vietnamese IT enterprises is selling solutions in the Southeast Asian region. Thus, in addition to companies providing outsourcing products, there are many IT enterprises working together to sell solutions to these customers. That cooperation is the key to finding customers in countries in the region. “Currently, some Vietnamese startups are providing solutions for the regional market, mainly establishing headquarters in Singapore, then expanding to Malaysia, Indonesia…”, Ms. Giang said.
However, not all businesses can easily hold millions of dollars in their hands when exporting digital technology due to limited potential and limited understanding of the market. In that journey, they have also experienced many bitter experiences.
Mr. Pham Thai Son - CEO of NTQ Solution said that going global is a long-term process, requiring any business to have a clear understanding of the market characteristics, clearly identify the needs and constantly improve the quality of its services and products. Therefore, for young businesses planning to go international, choosing the right markets is very important. Businesses can start from markets that are scarce in resources, or choose to provide service solution models that are in high demand.
Along with business development, enterprises operating in foreign markets should clearly understand and strictly comply with the laws of the host country. To increase understanding of the local market, the principles and culture of the host country, building and investing in a team of local staff will help the company increase understanding and integrate faster into the new market. At the same time, to be able to develop sustainably in demanding developed markets, the quality of products and services must be put first, aiming for "world-class" standards is a firm requirement.
This is also the strategy that has helped NTQ Solution achieve impressive achievements on its journey to reach the global market. From here, NTQ not only has the opportunity to increase the scale of projects with customers, but also forms opportunities for cooperation and joint ventures with large corporations and organizations around the world to bring NTQ's services to the local market.
Mr. Lam Quang Nam, Executive Committee Member of Vietnam Software and IT Services Association (VINASA), said that in terms of technical and technological capabilities, Vietnamese IT enterprises are fully capable of participating in solving the world's problems. However, apart from pioneering enterprises that have been successful for many years in the international market, we are still weak in understanding the world's problems.
“To understand these problems, we need to understand the working culture of the target market, the ability to connect with customers and partners in the target market, the financial capacity as well as the confidence to survive in the target market before reaching the necessary level of understanding,” Mr. Nam expressed.
Acknowledging the many difficulties facing Vietnamese businesses going abroad, Mr. Nguyen Thien Nghia, Deputy Director in charge of the Department of Information and Communications Technology Industry (Ministry of Information and Communications) said that Vietnam does not have a network of potential customers. To overcome this difficulty, domestic businesses can link up with local consulting companies, and if they have strong potential, they can buy shares to cooperate and turn them into a bridge.
Besides, culture and language are some of the barriers that need to be overcome. We need to understand the way of thinking and problem-solving of the natives to come up with suitable orientations and products.
In addition, businesses have not yet defined their products and services to suit the target market. “Some businesses have asked the State to support the provision of market information, but my point of view is that only businesses themselves can best survey the market that suits them. The State can connect businesses with some associations and partners to have a focal point for coordination and implementation,” Mr. Nghia shared.
Mr. Lu Thanh Long, Chairman of the Board of Directors of MISA, said that if Vietnamese enterprises step into the international market alone, they will face many difficulties. “We really hope to have support from state agencies, especially the Ministry of Information and Communications, in communication and connection. If only state officials were willing to bring Vietnamese enterprises along on business trips and trips abroad to connect Vietnamese enterprises with enterprises in the visiting country, thereby attracting the media of the host country and promoting Vietnamese enterprises, then we would have a much smoother start,” Mr. Long suggested.
In addition, the embassy's support in connecting and finding local information will also help Vietnamese businesses more easily promote trade and expand international market share.
The role of business associations is also very important. For example, in the Vietnam Software and Information Technology Services Association (VINASA), association members regularly share knowledge and experience to help each other avoid failures and quickly achieve success when going abroad.
The world market still has a lot of potential for Vietnamese enterprises to find a way to bring Vietnamese products to the world. The "big brothers" are still on the way to conquer many other markets, gradually sharing experiences, leading young but ambitious units, determined to accompany on the path to conquer the world IT market. The spirit of being ready to go out to sea, "hunting whales" with their own tricks, not only demonstrates the creative and innovative spirit of the Vietnamese people but also inspires the work together to build and develop the Vietnamese business community sustainably abroad.
Source: https://special.nhandan.vn/vuot-thach-thuc-khi-ra-bien-lon/index.html
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