BM opened a new technology center and announced two research pacts with universities in Vietnam on Friday, saying it sees promise in the developing nation.
IBM's first Innovation Center in the Vietnam aims to help local developers create new technologies for digital infrastructure projects in banking, telecommunications, energy and government, the company said in a statement. It will offer training workshops, consulting services and assistance to researchers working to bring new technologies to market.
There are incredible opportunities in information in Vietnam as the country embraces technology in its transformation from an agricultural to an industrial nation, IBM said.
Vietnam last week unveiled a US$8 billion government stimulus package, most of which is targeted at infrastructure and development projects.
The new innovation center is located in Ho Chi Minh City, formerly known as Saigon.
Technology multinationals often build such technology centers in developing countries to encourage local innovators to create software using their developer kits and attract business from governments and local companies.
IBM runs 43 Innovation centers worldwide.
IBM said it will also launch the first Vietnamese language version of IBM developerWorks, a part of its Web site that provides resources to software developers and other IT professionals.
The company signed two agreements to work with Vietnam National University in Ho Chi Minh City and Hanoi on separate technology projects. In Ho Chi Minh City, IBM will work with academics to establish a new university cloud computing center and cloud curriculum, while in Hanoi, IBM will help with the establishment of a new department aimed at improving various segments of the services industry called service science management and engineering.
The initiatives are partly a "response to accelerated IT growth in Vietnam," IBM said. Internet use is already widespread and continues to increase in Vietnam, IBM said, while the country's IT sector has grown at 20 percent annually in recent years.
There were nearly 21.2 million Internet users in Vietnam at the end of April, 2009, according to the Vietnam Internet Network Information Center.
Chu Tien Dung, chairman of the HCMC Computer Association, told the Daily that the job-hopping ratio in the software outsourcing sector has surged by nearly 20% as industry players are grabbing their rivals’ employees given a labor undersupply.
These companies prefer experienced people, Dung said. Certain firms have even committed an act of unhealthy competition. The bottom line is many companies put quick profits first but lack long-term investment in human resource development.
The demand for information technology (IT) specialists has far exceeded the supply. As a result, enterprises are facing constant job-hopping and sharp rises in wages.
The increasingly high specialization of software outsourcing and continuous personnel changes have sent the market shrinking as enterprises do not employ people who are trained from scratch but experienced ones.
Vuong Bao Long, human resource manager of LogiGear Vietnam, specializing in software testing, said LogiGear had been hurt in the fierce battle for staff. He stressed other software companies had sent emails to engineers of his company and offered attractive salaries.
“Many companies will, at all costs, hunt for experienced people when they have projects. But they will terminate their labor contracts when the projects are done. There are certain companies having proposed transferring their employees to other firms. This leaves an adverse impact on the labor market,” Long said.
Other software outsourcing companies like CSC, Global CyberSoft and TMA are also struggling with this pressing issue. They said the unhealthy competition was initiated by some foreign-invested and local newly-established companies, but they declined to reveal the names of those firms.
Under the pressure caused by the fight for human resources, multiple companies have offered their employees higher salaries, a better working environment and opportunities for promotion. In addition, software outsourcers have joined hands with the HCMC-based colleges to boost the number and the quality of IT students to create a more stable labor supply.
However, Long said these measures could only help remove the tip of the iceberg. He proposed the authorities should intervene to remedy this situation.
The facility, the first of its kind in Southeast Asia, reaffirms Nokia’s long-term commitment to Vietnam as well as its strategy in the region. The factory, with an initial investment of 200 million EUR (almost 300 million USD) is built on a 17 hectare site in the Vietnam-Singapore Industrial Park (VSIP) in Bac Ninh province.
It is expected to go into operation in early 2013, have with an annual output of 180,000 units and generate jobs for almost 10,000 workers. Nokia first entered Vietnam in 1996 and like many other multinational enterprises still sees the country as a growing market with great opportunities and potential. Nokia currently has two representative offices in Vietnam, one in Ho Chi Minh City and the other in Hanoi.
Source: Vietnam news agency
The Vietnamese market remains small, but it has attracted a lot of big service providers, from foreign experienced ones such as: SugarCRM, ZohoCRM, Microsoft Dynamics CRM, Saleforce, SAP CRM, Oracle; to domestic big guys such as: Vtiger, Hitek, Biaki, Vpar, PerfectCRM, 1VS, MisaCRM, NEO CRM. The small market and the presence of numerous service providers both explain why the competition in the market is so stiff.
The biggest obstacle for CRM software suppliers is the lack of attention of Vietnamese businesses to the products. It is estimated that only 10 percent of Vietnamese businesses have used CRM, while the figure is much higher in other countries. It is estimated that the world would spend about 13 billion dollars in 2012 on the works relating to CRM.
Therefore, it’s always very difficult to offer CRM products to Vietnamese enterprises. Vietnamese still do not think that they need to have a tool for customer relation management when they want to develop and expand their business scale. A lot of them, when meeting CRM suppliers, raise a question like “What does CRM software mean? Why do I have to have a CRM product?”
As the market share is too small for all CRM suppliers, a lot of them have to offer cheap products to scramble for customers. The suppliers try to minimize their production costs by using foreign open source codes.
Analysts say that the open source codes would help IT firms cut down expenses when developing a system or a fundamental for analyzing and developing products for a specific market like Vietnam. However, later, during the process of developing products, they would meet some serious errors.
After a period of development, the software products would not be able to satisfy the requirements set up by the users. This would not only make the solution providers lose their customers, but also make other companies fall into disrepute.
Mai Duy Quang, director of Biaki, one of the leading CRM suppliers in Vietnam, has also admitted that the challenges remain too big for CRM firms. While tens of billions of dollars are being spent in the world on the products and services relating to CRM, Vietnamese IT firms still have to meet customers to explain to them the necessity of CRM.
How is the future for Vietnamese CRM market?
However, Quang still believes that CRM suppliers would have a bright future.
“If you understand the inspirations of customers and can provide good products, the indifference of the market and the lack of knowledge about CRM products would not be a big challenge any more,” he said.
Quang believes that it would be better for Vietnamese businesses to develop technology foundation of their own instead of using foreign open source code. He said Biaki, for example, had to spend 12 years on developing products in the European market. However, it still faced big challenges in Vietnam in order to create the products fitting the specific features of the market, like BiakiCRM.
BiakiCRM has been recognized as having a flexible mechanism and high openness which can satisfy the current demand and the demand in the future of some businesses. BiakiCRM would attend Echelon 2012 Startup Marketplace, a well-known event for Asian technology community, to be held in Singapore.
However, BiakiCRM is just one of the very few success stories in Vietnam. IT firms would still have to follow a thorny path to reach their successes. However, experts say, the rewards for them would be not small: it is expected that the percentage of Vietnamese businesses using CRM products would rise to 30-35 percent in one or two years.
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.
Hewlett Packard is establishing a software development center in Silicon Valley that the company describes as "a single community" for its management, automation and security software teams.
Under a leasing agreement unveiled Wednesday, HP will set up shop early next year at Moffett Towers, a 1.8 million-square-foot office complex in Sunnyvale, Calif. HP will consolidate software development assets from its multiple Bay Area offices at this location, including the security expertise acquired in its acquisitions of ArcSight and Fortify.
HP CEO Leo Apotheker has made building out HP's software business one of his top priorities and the company intends to use the new facility to develop "important information management capabilities" for specific vertical industries.
"Software is the cornerstone of HP’s vision to provide seamless, secure, context-aware experiences for the connected world," said Bill Veghte, executive vice president of HP's enterprise software business, in a statement.
Moffett Towers "soars above its surroundings to provide unobstructed views of San Francisco Bay and Silicon Valley. Each of its seven towers is an architectural masterwork of gleaming steel, stone and glass," according to a description the facility's Web site.
Moffett Towers, developed by San Francisco-based Jay Paul Company, features buildings that are LEED certified and built in an environmentally friendly, energy efficient fashion. "Wired for today and ready for future expansion, all buildings can be easily connected via conduit infrastructure," according to the Web site.
The green aspects of the new software development facility fits nicely into HP's green IT strategy. Last week, HP opened a research facility in Fort Collins, Colo. that's dedicated to sustainable data center technologies, including HP's Converged Infrastructure portfolio. HP's goal is to cut power consumption for data center cooling and boost data center capacity while using less equipment.