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Home IT BUSINESS The outsourcing segment of software with high potential to increase due to high demand

The outsourcing segment of software with high potential to increase due to high demand

Oct 15, 2019 IT BUSINESS

The information technology industry has great potential for growth thanks to the software outsourcing segment. 

KB Securities Vietnam Joint Stock Company (KBSV) has just released the Market Strategy Report for the fourth quarter of 2019 with a positive assessment for the information technology industry group, especially the outsourcing segment of software with high potential to increase. Growth due to high demand around the world remains high.

Vietnam’s software engineer salary compared to India and China

According to KBSV, the field of software outsourcing does not require a high level of gray matter but a large number of employees, while other countries are in shortage of personnel.

Meanwhile, Vietnam’s software engineer labor costs are low compared to other countries (24% lower than India, 54% lower than China), so it will be a major competitive advantage.

However, KBSV also noted that the personnel cost has been increasing recently due to the competitive pressure of personnel, which is a factor to be monitored, which may affect the long-term growth ability of enterprises in the next time.

Software outsourcing is still the main growth engine

In the first 8 months of the year, software outsourcing is still the main growth engine of the whole information technology industry. Regarding the activities in the domestic market, KBSV expects gross profit margin to continue to improve as businesses oriented to develop software segments have a higher gross profit margin than the hardware segment.

However, gross profit margin may face the possibility of decline due to lower rates in the provincial market due to low-income levels and the lack of infrastructure businesses will have to outsource thereby increasing operating costs.

Why choose Vietnam for software outsourcing?

  • Economical Workforce

The most important advantage IT companies look to when outsourcing their work is the availability of low cost, and Vietnam offers that. The country’s costing when it comes to rendering outsourcing services is way lower than the neighbouring outsourcing attractions including India, China, and other nations.

  • High Education Level

Being low on the cost doesn’t mean that the knowledge and skill level is low. This is where Vietnam has grown and evolved considerably in the last few years, having created a system of IT specialized schools that develop young talent who holds expertise in software, programming, and other IT domains. The education level, as a whole, is of high class with a literacy rate of 97% and a higher percentage of that is engaged in learning information and communication technology. The focus towards English is also high and you will find any Vietnamese working professional in the IT industry very fluent in English communication.

  • Young Personnel

If we evaluate the population dynamics of Vietnam, then the statistics show that around 70% of the people are under 35 years of age and around half between 15 to 35 years of age. This means that a higher percentage of the population is the young workforce who are knowledgeable and skilled in the latest market trends and technologies.

  • Political Stability

With a constant growth rate of around 7%, and the country devoid of any political conflict, religious extremism, and economic stability, it provides the ideal platform for western countries to work with people from a liberal and steady culture. This allows foreign companies to get ideal support without any external indulgence or diversion and can freely move to the country for training and other purposes. The above reasons make this destination an ideal location for software outsourcing for any small to large enterprise, considering any size of work. The Vietnamese are highly polite, friendly people who adhere to timeliness and proficiency in their work.

InApps Technology
Offshore Development Center
A leading software development outsourcing company in Vietnam and a trusted technology partner of every customer.

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