Vietnam Information Technology Report Q2 2011
Business Monitor International, April 2011, Pages: 59
Vietnam Information Technology Report provides industry professionals and strategists, corporate analysts, information technology associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Vietnam's information technology industry.
Market Overview
The Vietnamese IT market is estimated to grow at a CAGR of 16% over the 2011-2015 forecast period. IT spending bounced back in 2010, following a sluggish start to the year. Factors such as growing PC penetration, economic growth, a range of government ICT initiatives and a drive to develop Vietnam’s IT industry will help to underpin one of the fastest IT market growth rates in the region. An ambitious government IT plan for 2010-2020 should shape many segments of the Vietnamese IT market, while Vietnam’s improving information and communication technology (ICT) infrastructure will also drive growth. Vietnam’s gradual integration into global trade networks such as the Association of Southeast Asian Nations (ASEAN) and the WTO has helped to bring down prices and increase
opportunities for importers.
The Vietnamese IT market is estimated to grow at a CAGR of 16% over the 2011-2015 period. The addressable domestic market for IT products and services is projected by BMI to reach US$4.1bn by 2015. An increasing number of Vietnamese companies have shown an interest in cloud services.
Industry Developments
In November 2010, the government pledged to invest US$8.5bn in the ICT sector over the next ten years. Meanwhile, the government’s campaign to attract more foreign IT companies to invest in Vietnam received a boost with the announcement that Hewlett-Packard (HP) would set up a wholly-owned firm in Vietnam in early 2011. The government hopes to attract US$5bn of foreign investment into the IT industry by 2015.
The Vietnamese government has unveiled ambitious plans for developing the country’s IT industry. The plans, which state a revenues target for the sector of between US$17bn and US$19bn in the next five years, include major investments to develop production centres in software, services, hardware and electronics. Revenues are projected at US$2bn from software sales, US$12.5bn from hardware, US$2bn from digital content, and US$1.5bn from IT services.
In 2010 the Ministry of Education and Training continued to implement a national programme to supply 1mn affordable computers to Vietnamese schools by 2011. In January 2010, the Vietnam Post and Telecoms Group (VNPT) in Ho Chi Minh City launched a local version of the Computers for Education programme, which will provide teachers and students in the city with low-priced laptops and DSL broadband connections.
Competitive Landscape
In 2010, several Vietnamese enterprises announced plans to produce tablet PCs, and the first local product, from Hanel, was launched in Vietnam in October 2010. However, local manufacturers are likely to find it hard to compete with the iPad and rival products from other vendors, such as Samsung with its Galaxy Tab.
Vietnam has around 10,000 firms currently licensed to provide IT services, but only one-third are actually operating. The MOCI is currently developing a draft decree to map out policies to help the IT industry grow. The decree will stipulate procedures and operational requirements for firms providing IT services. In 2010, the Vietnamese FPT (Corporation of Financing and Promoting Technologies) and Microsoft reached an agreement on cooperation to research opportunities for cloud computing in Vietnam. The partners will also launch commercial pilots. Meanwhile, IBM is promoting cloud computing as a costeffective way for Vietnamese SMEs to realise efficiencies through IT utilisation.
Computer Sales
BMI projects that sales in Vietnam’s computer hardware market will be worth around US$1.7bn in 2011, up from an estimated US$1.5bn in 2010. BMI projects growth of around 13% in the Vietnam PC market in 2011, after the market showed signs of a rebound in 2010.
PC penetration in Vietnam was estimated by BMI at around 15% in 2010. Notebooks are owned by an estimated 7% of the Vietnamese population. This points to significant growth potential for the local PC market, with the most potential being in rural areas. Currently Hanoi and Ho Chi Minh City are thought to account for in the region of 85% of notebook sales.
Software
In 2011, Vietnam software sales are projected by BMI to grow to US$192mn, and software CAGR for 2011-2015 should be in the region of 15%. Software spending comprises around 10% of total Vietnamese IT spending.
The market is expected to reach a value of around US$391mn by 2015, with steady growth in demand for licensed software from government, enterprise and household segments. Vietnam’s software market is developing, despite the problem of software piracy, which still accounts for around 85% of software, compared with 76% in neighbour Thailand.
Services
Vietnamese IT services spending is forecast to reach around US$406mn in 2011, up from US$351mn in 2010. Sectoral CAGR is projected at 12% over the forecast period, as the market approaches US$752mn by 2015.
IT services now accounts for around 18% of total Vietnam IT spending. Over the past few years, the size of IT services deals has increased in key IT spending verticals. Growing demand for digital infrastructure projects in segments such as banking, telecoms, energy and government has attracted global IT services providers to invest more in Vietnam.
E-Readiness
Vietnam’s fixed-line infrastructure is unreliable and offers poor coverage. However, Vietnam has an exceptionally high penetration rate in the mobile market, reaching 126% at the end of 2009, and registering around 110.8mn subscribers. This has been aided by mobile network operators reducing tariffs to encourage growth of their respective subscriber bases, as well as increased investment in the expansion of infrastructure to areas outside major towns and cities. Demand for mobile broadband has also been accelerated by the changing lifestyles of consumers, who use the service for accessing the internet for work and leisure.
Executive Summary
SWOT Analysis
Vietnam IT Sector SWOT
Vietnam Telecoms SWOT
Vietnam Political SWOT
Vietnam Economic SWOT
Vietnam Business Environment SWOT
IT Business Environment Ratings
Asia
Table: Asia Pacific IT Business Environment Ratings
Asia IT Markets Overview
Vietnam Market Overview
Government Authority
Background
Hardware
Software
Services
Industry Developments
Industry Forecast Scenario
2011 Outlook
Drivers
Segments
Summary
Table: Vietnam IT Sector (US$mn unless otherwise stated), 2006-2015
Internet
Table: Telecoms Sector – Internet – Historical Data And Forecasts, 2008-2015
Macroeconomic Forecast
Table: Vietnam – Economic Activity, 2008-2015
Competitive Landscape
Hardware
Software
IT Services
Company Profiles
FPT Software
Country Snapshot: Vietnam Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1999-2004
Table: Consumer Expenditure, 2000-2012 (US$)
BMI Methodology
How We Generate Our Industry Forecasts
IT Industry
IT Ratings – Methodology
Table: IT Business Environment Indicators
Weighting
Table: Weighting Of Components
Sources
- FPT Software
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