HCM City slipped one position from 2011 to 17th while Hanoi kept its 21st place, Tholons says.
Tholons forecasts that Vietnam will emerge as one of the major providers of IT services outsourcing in Southeast Asia, and could replace China and India.
The global adviser says despite experiencing a stagnant growth rate, HCM City has a chance to boost its attractiveness of software outsourcing.
According to the Vietnam Software Association, HCM City and Hanoi accounted for 90 percent of the country's software outsourcing revenue in the last several years.
Low labour costs, improved business environment and a skilled workforce were the main factors attracting leading technology firms such as Intel, IBM and Siemens to set up distribution centres in Vietnam, the association says.
The salary for Business Processing Outsourcing personnel in Vietnam was about 75 percent lower than Chinese major cities such as Beijing, Shanghai and Dalien.
Meanwhile, thanks to a long period of French rule, Vietnam has an advantage in the French language, which can attract French firms such as ESI, Mega International, Sysun and Worketer. Some have already visited HCM City and Hanoi to find business opportunities.
Tholons says India is the top outsourcing nation with six cities among the top 10. They are Bangalore, Mumbai, Delhi, Chennai, Hyderabad and Pune.
The central city's information technology businesses earned VND3,200 billion (US$152 million) and an export turnover of $13.5 million last year, the director of the city's information and communication department, Pham Kim Son said yesterday.
At a seminar on the model of concentrated information technology for local provinces yesterday, he said the city planned to build a software park in the Da Phuoc urban area – the second software park in Da Nang – during the next five years.
"The city has developed Quang Trung software and Da Nang software parks as concentrated centres. We have invested around VND600 billion ($29 million) in the first stage of the enlargement project of the Da Nang software park over an area of 131ha so far," Son confirmed.
"We schedule to enlarge the Da Nang park to 340ha, which aims to attract more foreign investment in the future with developed information technology and infrastructure," he said.
Deputy Minister of Information and Communication Nguyen Minh Hong said the seminar was an opportunity for local provinces to review current information technology in order to boost economic development.
"Local provinces should eye developing concentrated information centres, which will help draw more foreign investors in coming years. A good basis of advanced information technology will create competitive power for local businesses," Hong said.
He added that information technology would play an important role to help Viet Nam develop as an industrial country by 2020.
The Quang Trung and Da Nang software parks have attracted 140 information technology companies, of which over 50 per cent are domestic, with total 27,000 staff members.
The city will provide priority to software companies, including value-added tax exemption, and apply a 10 per cent income tax in 15 years.
Da Nang is one of the biggest cities, after Ha Noi and HCM City, developing concentrated information centres.
DA NANG, Vietnam, May 22, 2012 /PRNewswire/ -- IBM today announced the opening of a branch office in the city of Da Nang in Central Vietnam as part of the company's continued geographic expansion initiative to increase its presence in key growth markets. The Da Nang office is IBM's third in Vietnam to date after Hanoi and Ho Chi Minh City.
The extended presence will strengthen IBM's ability to provide solutions and services to clients and partners in the region especially in high growth areas such as smarter systems, cloud computing and IT security.
Da Nang is one of Vietnam's key economic, cultural, scientific and technological centers and part of Central Vietnam's Economic Zone. In recent years, the Da Nang government has turned to technology to help enhance the quality of public services and improve the quality of life for citizens. For example, IBM is helping to integrate and transform the IT systems at the Da Nang Government's Department of Information and Communication. IBM is also partnering with local academic institutions such as Da Nang University where it has established an IBM Center of Excellence to support the development of IT skills. IBM has also recently announced Da Nang as one of the cities around the world to be selected in the Smarter Cities Challenge program through which IBM will deploy a team of its experts to help Da Nang to become a smarter city.
"IBM has been present in Vietnam for over 15 years but we are now expanding into new regions in recognition of the huge potential of the Vietnamese market and the role of smarter systems in transforming business, government and society," said Vo Tan Long, Country General Manager, IBM Vietnam. "By giving Da Nang access to world class technology and expertise, we also hope to help the city become smarter and increase its ability to play a key part in Vietnam's economic growth."
Businesses in Da Nang have also embarked on a major program of modernization and are implementing advanced technologies to increase operational efficiency and become more competitive on the global stage. IBM is already active in the region through its network of business partners and experiencing strong demand for its solutions and services from the manufacturing, aquaculture, hospitality and machinery sectors. For example, Da Nang Hyatt Residence Hotel and Resort has deployed IBM hardware and software solutions to build a high-availability IT infrastructure to increase efficiency and improve collaboration across different departments and partner organizations.
Phung Tan Viet, Da Nang's People Committee Vice Chairman welcomed IBM's latest investment: "as Da Nang strives to strengthen its competitiveness across a number of strategic economic sectors, we highly value IBM's increased presence in the city. IBM's deep expertise and industry leading technologies will have a positive impact on the local business environment and IT community."
Geographic expansion is one of IBM's core growth strategies through which it is expanding into untapped markets around the world where there is a significant opportunity for growth. By investing in people and physical offices on the ground and by building relationships with businesses, government leaders, and universities, IBM is committed to the local economic development of the cities in which it is present.
The new office in Da Nang was inaugurated at a ceremony today attended by government officials, clients and business partners.