Outsourcing software development is a major economic driver for many developing nations. Traditionally, India and China have been recognized as industry leaders due to their experience and resources. However, Vietnam is rapidly emerging as a significant player in this space. With a solid track record of stability and a strong focus on information technology, Vietnam is becoming an excellent choice for modern outsourcing needs.

Is Outsourcing Software to Vietnam a Wise Move for Businesses?

For those new to outsourcing, there may be concerns about the ability of overseas firms to deliver quality work, communicate effectively with onsite teams, and meet milestones and goals with the same efficiency as onsite workers. Additionally, potential onshore obstacles like communication difficulties and language barriers might seem daunting.

Despite these concerns, many outsourcing companies in Vietnam prioritize not only cost-effective solutions but also high-quality deliverables. These companies adhere to specifications, meet deadlines, and maintain a high level of dedication. Vietnam is gaining traction in Asia as a cost-effective and high-quality software development outsourcing destination. According to the CIO, outsourcing to Vietnam can save up to 90% of expenditures compared to the United States, and software development in Vietnam is significantly cheaper than in India.

Outsourcing to Vietnam – The Next Global Trend in the IT Industry

Research indicates that outsourcing software development costs 50% less in Vietnam compared to India. Anderson Vietnam estimates that the cost per person in Vietnam is only $20,000 annually, compared to $40,000 in India. Forbes reports that Vietnam has overtaken China as a top IT hotspot in Asia-Pacific. Vietnamese developers offer more affordable hourly rates, ranging from $14 to $40, compared to Chinese developers, who charge about $20 to $50 per hour. These cost advantages make Vietnam an attractive destination for offshore development projects.

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Cost-Effective Solutions

The cost of outsourcing to Vietnam is notably reasonable, even cheaper than many other outsourcing hotspots. Companies can access a skilled and competent workforce while saving money. The average rate for hiring a skilled senior developer in Vietnam is about $35 per hour, compared to $140 per hour outside the outsourcing industry. Labor costs in Vietnam are 90% less than in the U.S., 50% less than in China, and 30% lower than in India, providing more funds for development. MarketsInsider ranked Vietnam fifth on the list of “Best Nations to Outsource to in the World in 2019.”

High-Quality Labor Force

The Vietnamese government emphasizes education and training, resulting in a 96% literacy rate and 80% of college graduates holding degrees in the sciences. This makes Vietnam an excellent country for outsourcing technological projects due to its highly educated population. The average age of the Vietnamese IT workforce is young, with 40-45% under 35. Many Vietnamese IT talents are trusted and hired by prominent Silicon Valley corporations like Google, Apple, and Facebook. Glints reported in 2022 that “Vietnamese tech talent is the most sought-after internationally.”

Cutting-Edge Technology

"Cutting-edge" or "bleeding-edge" technology refers to innovations that are still in the early stages of development and may not yet be fully reliable. It's important to distinguish between experimental software and cutting-edge developments. Software that has progressed beyond the beta stage and is available to the public and corporate customers represents cutting-edge technology, even if it hasn't been thoroughly tested. These technologies are often described as "game-changing." Innovations like cloud computing, containers, AI, and machine learning were once cutting-edge but are now widely used.

Today, quantum computing, deep learning, co-biotics (human-robot collaboration), and neuromorphic processors are at the forefront of technological advancements and may become standard shortly. Vietnam, with its rapidly growing economy, is emerging on the global stage with these advanced technologies.

Vietnam's status as a leader in various technological fields is evidenced by the presence of numerous major IT corporations in the country. Advanced technologies such as cloud computing, the Internet of Things (IoT), blockchain, artificial intelligence, machine learning, and more are being implemented and adopted throughout Vietnam.

Socio-Economic Stability

Vietnam is an exceptionally secure nation, fostering a favorable climate for business and outsourcing. Ranked as the 12th safest country in the Asia Pacific area by the Global Peace Index 2020, Vietnam boasts low crime rates and internal stability. The government has implemented policies to enhance public safety, improve infrastructure, and promote foreign investment. This stability has attracted numerous multinational companies, making Vietnam an attractive destination for international business operations.

Economically, Vietnam has seen significant growth, transitioning from a centrally planned economy to a market-oriented one. The World Bank predicted a GDP growth rate of 5.5% in 2022, highlighting the country's resilience and ability to recover from global challenges like the COVID-19 pandemic. The Vietnamese government has signed numerous free trade agreements, boosting trade and investment flows. Combined with a young, skilled workforce and a strong emphasis on education, these factors position Vietnam as a hub for technology and innovation, making it an ideal outsourcing destination.

Political Stability

Since reunification in 1975, Vietnam has enjoyed nearly 30 years of uninterrupted political stability, creating a favorable environment for economic development and foreign investment. This period of stability has been marked by consistent leadership and governance, which has helped maintain a predictable and reliable political landscape. The country’s stability is further highlighted by high-profile visits from international leaders, including U.S. presidents Bill Clinton and George W. Bush, who visited Vietnam during their terms. These visits underscore the global recognition of Vietnam's steady political environment and its growing importance on the world stage.

The Global Peace Index 2020 placed Vietnam 12th in the Asia Pacific region for socio-political stability, reflecting the country's low levels of internal conflict and effective governance. This ranking indicates a minimal risk of political turmoil, making Vietnam an attractive destination for foreign businesses seeking a stable environment for their operations. The Vietnamese government has consistently focused on economic reforms, infrastructural development, and international cooperation, further cementing its reputation as a stable and progressive nation. This stability, combined with strategic economic policies, continues to attract significant foreign direct investment, contributing to Vietnam’s robust economic growth and development.

Presence of Global Companies

Many large corporations have established a presence in Vietnam, showcasing the country's capabilities and its appeal as an outsourcing destination. IT giants such as Intel, LG, Samsung, and IBM have all outsourced operations to Vietnam, leveraging the country's skilled workforce and cost-effective solutions. This influx of global corporations not only underscores Vietnam’s viability as an outsourcing hub but also highlights the trust and confidence these companies have in Vietnam's ability to deliver high-quality services.

The presence of these multinational corporations demonstrates Vietnam's competitive edge in the global market. Companies like Intel have invested in significant manufacturing and R&D facilities, while Samsung and LG have made Vietnam a key part of their global production networks. These investments have created numerous job opportunities and have spurred technological advancements within the country. Vietnam’s ability to attract and retain such high-profile companies speaks to its robust infrastructure, favorable business environment, and the continuous efforts by the government to promote foreign investment and economic growth.

EDUTO Software Outsourcing As Your Potential Outsourcing Vietnam Partner

EDUTO Software is a premier software outsourcing firm in Vietnam with over three years of experience in the information technology industry. With a dedicated team of over 100 IT specialists, EDUTO excels in developing custom applications tailored to meet the unique requirements of your business. Unlike a one-size-fits-all approach, EDUTO ensures that every project is designed specifically to match your specifications and your company’s needs.

Standing out among other outsourcing companies in Vietnam, EDUTO Software has the capability and experience to manage outsourcing projects of any size from start to finish, ensuring they are completed within budget, on schedule, and with results that exceed expectations. Our extensive experience in the market includes working with over 100 global partners. What makes EDUTO the right choice?

Expert Team: Our talented developers, designers, and project managers bring a wealth of experience and creativity to every project.

Quality Assurance: We are committed to delivering top-notch quality, ensuring your software is robust, scalable, and secure.

Cost-Effective Solutions: We offer competitive pricing without compromising on quality.

Customer-Centric Approach: Your satisfaction is our priority. We work closely with you to understand your vision and deliver solutions that exceed your expectations.

As offshore development becomes increasingly popular, if you have a concept for outsourcing to Vietnam but need help getting started, share your ideas with us, and we can collaborate to bring them to fruition. EDUTO Software is a one-stop shop that can meet all your software development needs, whether you are looking for mobile software apps, enterprise applications, or e-commerce solutions. Partner with EDUTO Software to leverage our expertise and achieve your business goals efficiently.

Read more: EDUTO website