TECH SUPPLIER Dec 2018 - Market Presentation - Doc # AP44473518
1H18 Country Report on IT Services – Vietnam
By: Khuong Ha
This IDC Presentation provides a detailed analysis of the market and competitive landscape in IT services in Vietnam from January to June 2018 (1H18). It covers the market size movements and growth trends in each of the macromarkets (i.e., project-oriented services, managed services, and support services) as well as the key industries such as finance, manufacturing and resources, public sector, distribution and services, and infrastructure. The report also provides a market and vendor analysis of 3rd Platform technologies as the key market drivers. The competitive analysis section includes key strategies and activities of global and local IT services providers in the market.
The data and insights within this presentation are part of the "Asia/Pacific Semiannual Services Tracker" research, which covers 14 foundation markets across 14 Asia/Pacific countries.
In 1H18, Vietnam's economy continued to enjoy a healthy GDP growth of 7.1% in, driven by the positive inflow of foreign direct investment, particularly in the manufacturing sector. Low interest rates and a stable local currency make Vietnam an attractive destination for foreign investment.
Digital transformation and Industrial Revolution 4.0 are the top agenda being promoted by the government, which focus on the implementation of egovernment, smart city, and smart healthcare. In August 2018, the Prime Minister approved the sustainable Smart City development project for the 2018–2025 period. Hanoi, Ho Chi Minh, and Danang are the first three cities lined up for the deployment of smart cities. At the same time, the Cybersecurity Law was approved by the Vietnam National Parliament, which is expected to increase demand for security services and drive spending from global cloud services providers that have stored their critical data in the country.
IT services spending was fueled by strong spending on systems integration, network consulting and integration, and hardware deployment and support services. Investments in the integration of ERP systems, core network upgrades, enterprise application portfolio, and security and disaster recovery were the key drivers this cycle.
In 1H18, the telecommunications sector had strong IT spending after the government approved the restructuring action plan and strategy development for the Vietnam Posts and Telecommunications Group (VNPT). A number of IT projects were implemented, such as the upgrade of the core network, datacenter infrastructure, and enterprise security. The banking sector was another major driver of IT services spending. The IT development plan for the period of 2017–2020, which was approved by the State Bank of Vietnam, requires banks to increase investment into upgrading their IT infrastructure, developing banking applications, and improving their risk management processes. The demand for ERP system and smart manufacturing applications from the discrete and process manufacturing industries also contributed to robust growth in IT services spending.
For local players, FPT continued to perform well, thanks to large-scale ERP system and hardware deployment deals from the banking and manufacturing sectors. HiPT, DTS, and CT-IN also performed well this cycle, driven by large-scale deals for hardware deploy and support, systems integration, and network consulting and integration from clients in the telecommunications, government, and insurance sectors. Meanwhile, global players such as Infosys thrived in Vietnam due to large contract wins from the banking sector.
Application development services, Application management, Hosted application management, Hosting infrastructure services, IT consulting services, IT education and training, IT maintenance and support, Network and desktop outsourcing services, Systems integration services