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Hanoi 21st most attractive city in software outsourcing

According to the latest Tholons’ report on the 100 cities in the world most attractive in software outsourcing, HCM City ranks the 17th, while Hanoi at 21st.



According to the latest Tholons’ report on the 100 cities in the world most attractive in software outsourcing, HCM City ranks the 17th, while Hanoi at 21st.

If compared with the last year’s report, Hanoi remains at the same position, while HCM City has fallen by one grade. However, if compared with 2009, Hanoi has fallen sharply from the 10th to 21st and HCM City from the 5th to 17th.

However, Tholons still believes that in South East Asia, Vietnam remains one of the biggest ITO (information technology service outsourcing) providers which can replace India and China in the field.

The low labor cost, the improved business environment and qualified labor force all are the reasons that have made big companies such as Intel, IBM, Teleperformance and Siemens decide to set up their distribution centers in Vietnam.

Hanoi and HCM City are the two most potential cities in the region in terms of ITO

They alone make up 90 percent of the Vietnamese total software outsourcing turnover: Hanoi earned 5.59 billion dollars from software outsourcing in the first 9 months of 2010, increasing by 19.5 percent in comparison with the same period of 2009.

Especially, HCM City still can see its name in the list of the top 10 newly emerging destinations (the nations from the 11th to the 20th in the top 100 are considered the most redoubtable rivals to the nations in the top 10). Tholons reserved a whole page in its report to analyze the capability of HCM City.

Even though HCM City has fallen by one grade from last year, HCM City is still considered a destination with great potentials, which can be the alternative choice for foreign companies, once the software outsourcing costs in China have been increasing.

The pay to Vietnamese BPO (business processing outsourcing) workers is 75 percent lower than that in Beijing, Shanghai and Shenzhen on average, while the pay to ITO workers is 45 percent lower.

Especially, French language skill proves to be a big advantage of HCM City, which was a former French colony for a long time, from 1850 to 1950. Therefore, HCM City may catch the eyes of many French information technology groups such as ESI, Mega International, SYSUM or Worketer. The enterprises have recently carried out a market survey in Hanoi and HCM City to learn about the markets.

Hanoi’s 5.59 billion dollars worth of export turnover doubtful

Nguyen Thi Thu Giang from VINASA, a software and information technology service firm, said she was really surprised about the export turnover of 5.59 billion dollars released by Tholons.

Giang said that the total turnover from software exports of Hanoi alone in the whole year 2011 was 2.3 billion dollars only. Meanwhile, it is unreasonable to say that Hanoi could export 5.59 billion dollars worth of software products just in the first nine months of 2010 as reported by THolons.

VINASA has affirmed that software outsourcing has just been modest income. In 2003, Vietnam earned 100 million dollars and in 2007, it earned 498 million dollars.

Experts have also said that there seems to be no miracle that can help Vietnam raise its software outsource exports to 5 billion dollars just within 50 percent.

Fsoft, the firm which is considered the biggest software exporter, could earn 1349 billion dong in 2011, while Tinh Van got 5.5 billion dong.

Source: Buu Dien

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