vietnam software 4jun2

Vietnam's IT industry attracting attention

HO CHI MINH CITY - Vietnam's emerging information-technology (IT) industry showed its potential last week with news that a local software developer had beaten off competition from two Indian rivals to land a high-end outsourcing contract from a US technology company.

Critical Path, a San Francisco-based technology company, shunned India, the world's leading software outsourcing destination, in favor of Vietnam, now home to a little-known software outsourcing industry.

The US company will outsource application development to TMA Solutions, a locally run software company with 100 programmers based in Ho Chi Minh City. The developer will be working on Critical Path's communication platform software, which is sold to Internet service providers, telecom companies, wireless carriers and postal authorities in the United States and Europe.

TMA will add new services to Critical Path's existing calendar server and extend the server so that services can be accessed from a mobile device using WAP. In addition, the server will be ported from Solaris to Windows 2000 server.

TMA is one of a small number of Vietnam software developers to have built up a recognizable niche in software outsourcing. The Ho Chi Minh City-based company is engaged in telecoms application development and already works for Nortel Networks and Japanese telecom giant NTT.

Commenting on the deal, Dan Stern, a technology analyst with Ho Chi Minh City-based Research Vietnam, said: "This kind of outsourcing project is further proof that Vietnam is home to pockets of software development excellence. A growing number of local companies are successfully winning high-end work in an outsourcing market that is largely unheard of in Europe and the US."

Independent analysis released by Research Vietnam in March showed that Vietnam is on average 50 percent cheaper than established outsourcing centers such as India. Vietnamese programmers are being charged out at an average of between US$10 and $15 per hour. Research Vietnam claims that the differential will increase as global IT spending recovers next year, forcing US and European companies to find more cost-effective outsourcing channels.

In a second deal, Nasdaq-listed Infogrames has selected a Vietnam-based multimedia partner to design a computer racing game for Microsoft's Xbox and Sony's Playstation 2.

Infogrames, one of the world’s top five third-party publishers of entertainment software, selected Ho Chi Minh City-based multimedia specialist Glass Egg over an Australian rival. The $100,000 plus deal will see Glass Egg design the track and cars for the new game, due for US release next year. Designing the interactive components will take 10 full-time production staff six months to complete.

Previously, Glass Egg shared the workload with an Australian partner until Infogrames took the decision to move the entire development process to Vietnam. Phil Tran, general director of Glass Egg, said: "We have been working with Infogrames for over two years and the new deal is proof of the quality of work that we and others are producing in Vietnam."

(Research Vietnam)