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Outsourcing Software Development Vietnam: Why it is a Good Choice

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Vietnam is increasingly recognized as a practical choice for outsourcing software development, thanks to its growing IT market and a strong pool of tech talent. This Southeast Asian nation is not just riding the wave of digital transformation but leading it, especially in the realm of IT outsourcing. The country’s blend of skilled IT professionals and cost-effective solutions makes it an attractive option for businesses looking to outsource their software development needs.

Choosing the right outsourcing destination is crucial for businesses, and Vietnam offers a compelling mix of quality and affordability. We’ll explore the reasons behind Vietnam’s rise in the IT outsourcing sector and highlight top outsourcing companies. This will help you make an informed decision when considering outsourcing software development to Vietnam.

How is the Industry Growth of Outsourcing Software Development to Vietnam?

When it comes to the age of a software outsourcing company that comes from Vietnam, it’s often younger than India and China. This factor, nevertheless, does not affect the rapid growth of the industry in both the Asia Pacific region and worldwide.

vietnam software

The industry growth of outsourcing software development in Vietnam is a testament to its emerging strength in the global market. The IT Outsourcing market’s revenue in Vietnam is projected to hit US$698.90 million in 2024. This burgeoning sector is set to expand further, with an expected annual growth rate (CAGR) of 16.38% from 2024 to 2028, ripe for investment and collaboration. This growth trajectory suggests a future market volume of US$1,282.00 million by 2028, showcasing Vietnam as a rising hub for outsourcing software development.

Further underpinning this growth is the investment in human capital. In 2021, Vietnam had around 430,000 IT developers. This pool of talent is continuously replenished with over 55,000 IT students graduating annually from more than 153 specialized institutions. Such a steady influx of skilled professionals feeds into the industry, with around 400,000 IT engineers currently working across over 60,000 digital technology firms in the country. Up to 2020, the total revenue of Vietnam’s software industry reached a notable 5.44 billion U.S. These statistics not only highlight Vietnam’s capacity in outsourcing software development but also position it as a strategic choice for global businesses seeking quality and growth.

FURTHER READING:
1. Software Development Outsourcing: A Detailed Guide
2. How to Choose a Software Outsourcing Company? Best Guidelines
3. 4 Software Development Outsourcing Pitfalls to Avoid
4. Top 3 Best Countries for Software Outsourcing Asia Pacific Region
5. Top 7 Best Software Outsourcing Companies

1. To become Japan’s second-largest partner in software and outsourcing services since 2014

The news was announced at the Vietnam IT Day 2018 in Japan by FPT Software CEO Hoang Nam Tien. More from him, the value of software and hardware outsourcing work that came from Japan to Vietnam in 2017 was estimated at US$400 million.

Software Outsourcing Company
The value of software and hardware outsourcing work that came from Japan to Vietnam in 2017 was estimated at US$400 million. Image: Golden Emperor.

The subjective reason for this was the shortage of the IT workforce in Japan. According to statistics from Japan’s Ministry of Economy, there are approximately 100.000 white-collar workings as and engineers in this country for various fields such as information security, cloud computing, mobile technology, etc. However, since the technology industry is growing more rapidly than ever, the need for IT human resources is wildly increasing too. It is estimated that Japan will lack more than 600.000 engineers by 2030.

And this issue led to the fact that a software development company must spend more to hire software engineers, of course, this costs a huge amount of money. That’s why Japanese businesses came up with two ideas that are 1) to go beyond the border and look for talents from other countries like Vietnam, Thailand, Malaysia, etc.; and 2) to partner with an outsourcing development company.

There was a survey conducted by the Information Technology Promotion Agency Japan showed that one third or 31.5% of 1100 IT companies are likely to choose outsourcing services from Vietnam over those countries like India (20.6%), China (16.7%), Thailand (9.7%), Philippines (7.4%).

Another research states that Japanese companies are using 20,000 Vietnamese employees in ITO (Information Technology Outsourcing) and BPO (Business Process Outsourcing).

Recommended reading: Top 3 Best Countries for Software Outsourcing Asia Pacific Region

2. To be in the top 6 most attractive software outsourcing service providers in AT Kearney’s 2017 Global Services Location Index

The research was conducted based on 3 main factors that are: financial attractiveness, people’s skills and availability, and business environment.

 
Software Outsourcing Company
Vietnam was in the top 6 most attractive software outsourcing service providers in AT Kearney’s 2017 Global Services Location Index. Image: DATABD.CO.

Moving from 11th place in 2016, Vietnam finally became the 6th fastest-growing software outsourcing country in 2017 GSLI, passing Thailand and the Philippines on the list. It is worth noticing that this has been the first time Vietnam has made it into the top 10 since 2013. This index also stated that in 2015, Vietnam’s outsourcing industry reached $2 billion and has been developing at a rate of 20 – 25% annually for the past 10 years.

In the top ten, Vietnam’s software outsourcing industry had the highest rank for financial attractiveness, stood at 8th place for people’s skills and availability, and also 8th for business environments.

Three reasons listed for this jump are the inexpensive cost of labor, the increasing number of young Vietnamese fluent in English, and rising investments in this industry from foreign countries.

Why You Should Work With a Vietnamese Software Outsourcing Company?

1. Cost-effective

As stated above, Japan and many other countries have seen Vietnam as a cheap yet powerful IT hub. This happens due to the fact that the cost of operating businesses, especially in the IT field, is low compared to other countries in the same region.

For more detail, let’s take a look at how cost-effective Vietnamese human resource in the IT industry is compared to those in the same region:

Software Outsourcing Company
Photo Source: qubit-labs.com

The same applies to India A few years ago, engineers in India were considered skillful, and of course, their rate was way higher than Vietnam software workers. Recently, however, due to the fact that Indian people see the potential of this career, they rush to study software development.

Consequently, there are too many people in the IT talent pool in India now, so they started to decrease their prices to attract the clients. That’s why at the moment, the hourly rate of Indian software engineers is really low.

2. A skilled labor force comes with greater productivity

There are 3 main factors that make Vietnamese employees become one of the most skillful workforces.

First, after many years of living, studying, and working in developed countries like the U.S., Canada, Japan, etc., Vietnamese ex-pats have finally returned home to establish startups and help the technology industry in Vietnam grow. Most of them brought not only money, but also knowledge, experience, and enthusiasm back to Vietnam. Mr. Hung Vo – CEO of Designveloper is one of them. At the moment, Designveloper has worked with more than 50 clients after 6 years of operation.

Software Outsourcing Company
Designveloper team.

Second, due to the need for high-skilled labor, the government and a lot of companies spend more money than ever to invest in human resources. Training and educating newly recruited employees have become a necessary strategy to attract talent. A software outsourcing company like Designveloper willingly opens its arms to take on freshers and spread knowledge of technology to them. At the same time, the government has taken steps to increase vocational and technical training in order to meet the requirements of the labor market.

Last but not least, Vietnamese are widely known as hard-working and loyal workers. According to Vietnam Outsourcing, “A perfect phrase to describe the workforce of the Vietnam software industry and its outsourcing industry, in general, is “keen on learning”. Vietnam has an estimated 25,000 university and college graduates majoring in various technology fields who are more than capable of keeping up with the demand for professionals in the Vietnam software outsourcing industry. What’s more is that Vietnam has a low turnover rate of less than 5%, as compared to other Asian countries whose turnover rate ranges from 10% to 20%.

And these 3 factors help labor productivity in Vietnam increase by 22.5% in the last 10 years.

Top 10 Outsourcing Software Development Company in Vietnam

Venturing into the world of outsourcing software development in Vietnam offers distinct advantages, crucial for businesses seeking innovative, cost-effective solutions. Here is our list of top 10 companies in Vietnam’s outsourcing landscape, each a testament to the country’s rising prominence in the global IT market. These firms are not only recognized for delivering high-quality software solutions but also for their ability to adapt to diverse business needs, ensuring projects are tailored to specific client requirements.

From agile development methodologies to cutting-edge technological services, these companies excel across multiple domains, including robust IT infrastructure development, advanced technological approaches, and customer-focused strategies. Whether you need a player who is known for efficient project management and innovation or stand out for their creative software solutions and technical prowess, look no further than our list.

1. Designveloper

Designveloper
  • Headquarters: Ho Chi Minh City, Vietnam
  • Founded: 2013
  • Revenue: $6.2 Million
  • No. of employees: 50-249
  • Services: Mobile App Development, UX/UI Design, Web Development, Custom Software Development, Custom Service Outsourcing, IT Strategy Consulting, Web Design

At Designveloper, we’re proud to be a top choice for outsourcing software development in Vietnam. Since our founding in 2013, we’ve been about our clients, and nothing more. Our web and software development process begins with a thorough understanding of your requirements, from forming an initial list of features according to the client’s needs, to guiding them towards the most appropriate development solution. With strong experts and high English proficiency, we know our global clients, the kind of high-quality solution they want to build, and we know exactly how to build it! The numbers really speak for us as a client-focused organization. As a firm, we believe in transparency and trust, and that’s why we’re open about our success rates: a stunning 95%. Our client retention rate is just as impressive, standing at 98%.

What sets Designveloper apart is not only our specialized web and software development skills but also our creative UI/UX design team. We craft unique interfaces, focusing on dynamic and engaging user experiences. Our team also holds certifications in SCRUM project management, including Professional SCRUM Master and Professional SCRUM Product Owner, demonstrating our commitment to efficient project delivery.

Our vision is clear. We aim to be a global leader in software development, leveraging our skilled workforce to provide top-notch services. We’re committed to delivering high-quality products swiftly and integrating new technologies to cater to our clients’ diverse needs. So, when you think of outsourcing software development in Vietnam, think Designveloper.

2. Newwave Solutions Jsc

Newwave Solutions Jsc
  • Headquarter: Hanoi, Vietnam
  • Founded: 2011
  • Revenue: $7.9 Million
  • Number of Employees: 300
  • Services: Mobile App Development, Software Development, QA & Testing, Software Maintenance, Game Development, UI/UX Design, Blockchain Development.

Newwave Solutions Jsc distinguishes itself in the outsourcing software development sector in Vietnam with a strong emphasis on blockchain technology. The company has committed itself to the development and export of software solutions from its early days, making significant strides in advanced technology adoption. It boasts a robust team of experts and a track record of integrating modern technologies such as AI, Blockchain, and IoT, catering to a diverse clientele across various sectors including finance, real estate, and tourism.

The company’s expansion into demanding international markets, notably Japan, Europe, the USA, and Australia, underscores its global appeal and competence. This approach has yielded significant growth, with a 150% increase in the last three years. Most recently, they’ve received the 2022 Sao Khue Award for their dedication to cutting-edge technology, especially in the realm of blockchain. Their involvement in major digital transformation projects for leading Vietnamese corporations like Vingroup and Bao Viet Financial-Insurance Group, along with their blockchain expertise, positions Newwave Solutions as a prime choice for outsourcing software development in Vietnam.

3. Kyanon Digital

Kyanon Digital
  • Headquarter: Ho Chi Minh City, Vietnam.
  • Founded: 2012
  • Most Recent Revenue Report: $18.4 Million
  • No of Employees: 300+ engineers
  • Services: Digital Consulting, Digital Innovation, Digital Operations, and Digital Venture.

Kyanon Digital, a leading tech incubator in Vietnam, has established itself as a key player in the outsourcing software development sector. Since its inception in 2012, Kyanon Digital has been pivotal in nurturing startups, aiding in digital production services like web and app development for multinational corporations. The company’s commitment to fostering innovation and supporting entrepreneurs has been instrumental in driving both social and economic change, making innovation accessible globally.

The company’s expansion in 2016 marked its transformation into a tech partner for various agencies, brands, and tech startups within Vietnam, growing its team to over 100 skilled engineers. This expansion continued internationally with the opening of an office in Singapore in 2017, focusing on digital transformation projects and acquiring global clients from countries like Singapore, France, Australia, and the United States. Kyanon Digital’s growth and excellence in digital transformation and innovation were recognized with its listing among the TOP 10 ICT Companies in Vietnam from 2020 to 2023. Furthermore, its commitment to being a human-centric organization is evident with over 300 dedicated professionals, along with achieving notable certifications such as ISO 27001:2013 and ISO 9001:2015, solidifying its reputation in outsourcing software development in Vietnam.

4. AgileTech Vietnam

AgileTech Vietnam
  • Headquarter: Hanoi, Vietnam
  • Founded: 2015
  • Most Recent Revenue Report: $5.6 Million
  • No of Employees: 90+
  • Services: Website/Mobile Apps, Blockchain services, AI – big data Services,

AgileTech Vietnam has carved a niche in the outsourcing software development industry in Vietnam, specializing in cutting-edge technologies like image processing, chatbots, and recommendation systems. These tools are instrumental in helping businesses enhance their customer relationships and overall lifetime value. Renowned as a blockchain pioneer in the country, AgileTech offers profound expertise in various Blockchain platforms, including Ethereum, Hyperledger Fabric, and Tendermint. This technological prowess enables them to cater to complex and evolving digital needs in the dynamic business landscape.

The company’s commitment and persistent effort have not gone unnoticed, with significant recognition and partnerships over the years. AgileTech Vietnam has emerged as a trusted technology partner for many startups, including those with investments amounting to millions of US dollars. Their global impact is evident, having successfully completed more than 80 projects for clients across over 10 countries. These achievements, coupled with awards like the 1st prize in Startup Weekend Hanoi 2013, underscore AgileTech’s position as a leading choice for outsourcing software development in Vietnam, proving their ability to deliver innovative and efficient solutions to a diverse clientele.

5. FPT Software

FPT Software
  • Headquarter: Hanoi, Vietnam
  • Founded: 1999
  • Most Recent Revenue Report: $1 billion
  • No of Employees: 30,000+
  • Services: IT Services (Testing, Enterprise platforms, Application development & modernization), Managed Services, Product Engineering (Automotive Digital Solutions, Hardware Design, Mechanical Design/Analyzing), and Business Consulting Services.

FPT Software, a core subsidiary of FPT Corporation, has established itself as a global leader in the IT services sector, playing a pivotal role in the outsourcing software development landscape in Vietnam. In a notable accomplishment, FPT Software became the first Vietnamese company, and only the 18th globally, to achieve TMMi level 5 certification. This distinction highlights their commitment to maintaining the highest standards in software testing processes and quality management.

Additionally, their recognition in the Gartner “Market Share: IT Services, Worldwide, 2022” report as one of the top 40 IT Services & Solutions companies in Singapore in 2022 further cements their status in the industry. These accolades underscore FPT Software’s ability to deliver world-class services, making them a prominent figure in outsourcing software development in Vietnam.

6. KMS Technology

KMS Technology
  • Headquarter: Hanoi, Vietnam
  • Founded: 2009
  • Most Recent Revenue Report: $139.2 Million
  • No of Employees: approx. 1,515
  • Services: Website/Mobile Apps, Blockchain services, AI – big data Services,

KMS Technology, a key player in the outsourcing software development arena in Vietnam, offers a comprehensive range of services tailored to modern business needs. Their expertise extends across domains to adapt and respond to the evolving demands of the global tech landscape, making them a versatile and reliable partner for businesses of all sizes.

Named consistently among Inc. 5000’s Fastest-Growing Private Companies for six years, their client portfolio is impressive, with hundreds of clients benefitting from their expertise. A notable example is their collaboration with Ceterus, a national accounting and intelligence technology company. KMS Technology played a pivotal role in the development and rollout of Ceterus’s new iOS application, which not only received accolades as the New App of the Year in 2018 but also brought substantial cost savings and efficiency improvements. This project exemplifies KMS Technology’s ability to deliver innovative solutions that lead to tangible results, such as over $300k in cost savings, faster market entry, and reduced defects for Ceterus.

Their initiatives like UpStar Labs, an incubator for startups, and the successful launch of software companies like QASymphony, Kobiton, and Katalon Studio, demonstrate their commitment to fostering innovation and entrepreneurship.

7. CMC Global

CMC Global
  • Headquarter: Ho Chi Minh City, Vietnam.
  • Founded: 2017
  • Most Recent Revenue Report: $52,962
  • No of Employees: 2,000+
  • Services: Cloud migration, AI consulting and implementation, system integration services,…

CMC Global has made significant strides in the outsourcing software development sector in Vietnam, demonstrating remarkable growth in both revenue and management capabilities. Their success is underscored by their collaborations with over 250 business partners and customers worldwide, establishing themselves as a long-term and reliable IT solution provider.

The company’s excellence and consistency in service have been recognized through several prestigious awards, including consecutive Sao Khue Awards for “IT Outsourcing Service.” Moreover, CMC Global was honored with the TOP 10 Software and IT Services Outsourcing Companies award in 2021 by the Vietnam Software and IT Services Association (VINASA), further solidifying their position in the industry. Their client portfolio is impressive, featuring prominent names like Bosch, IBM, and Honda, reflecting their capability to meet the demands of top-tier global companies.

8. Saigon Technology

Saigon Technology
  • Headquarter: Ho Chi Minh, Vietnam
  • Founded: 2013
  • Most Recent Revenue Report: $35.7 Million
  • No of Employees: 400+
  • Services: Fffshore software development and software development outsourcing services.

Saigon Technology stands as a prominent figure renowned for their proficiency in the Agile Mindset and successful execution of international projects. Their portfolio spans from innovative startups to complex, multi-platform systems for large corporate clients, showcasing their versatility and technical prowess.

They was ranked among the top 15 best Agile software outsourcing companies in Vietnam by The Vietnam Software Association in both 2019 and 2020. Clutch also acknowledged them as 2022’s Leading Software Developer from Vietnam, further cementing their status in the industry. Their notable projects include the development of an end-to-end CV Parser System, which demonstrates their capability in creating sophisticated and automated solutions.

With a client list that spans continents, including Europe, Australia, Singapore, and North America, Saigon Technology has worked with esteemed clients like DMI Inc., Standard Chartered Bank, RSM Singapore, Stone Forest, Payroll Serve, Abbott, and Kaercher. These collaborations highlight Saigon Technology’s global reach and expertise, making them a prime choice for outsourcing software development in Vietnam.

9. Axon Active

Axon Active
  • Headquarter: Ho Chi MInh City, Vietnam
  • Founded: 2008
  • Most Recent Revenue Report: $1.19 Billion
  • No of Employees: 3,734
  • Services: ICT and DevOps Service for Cloud Computing, Project Management and Consulting service, Coaching and Training service,…

Axon Active specializes in complex multi-platform systems, particularly in fields like Fintech and ERP, the company has demonstrated its capacity to handle a wide range of technical challenges for various business sizes. Their global presence, with offices in locations such as San Francisco, USA, and Can Tho city, Vietnam, reflects their international reach and commitment to providing top-tier software development services.

Apart from their project work, Axon Active also plays a significant role in the tech community. They have organized notable events like DevDay Da Nang, which attracted over 800 participants, including students, IT professionals, and speakers from both local and international businesses. These events not only underscore Axon Active’s commitment to fostering a vibrant tech ecosystem but also their dedication to sharing knowledge and expertise.

10. InApps Technology

InApps Technology
  • Headquarter: Ho Chi Minh City,, Vietnam
  • Founded: 2016
  • Most Recent Revenue Report: $5.6M
  • No of Employees: 40+
  • Services: Mobile app development, web app development, custom software development, offshore development, and UX/UI Design.

InApps Technology has established itself as a leading force in the outsourcing software development industry in Vietnam, earning the distinction of being the top-ranked firm in the country and fifth in Southeast Asia for Application Development and Custom Software Development. Their reputation for excellence extends globally, with a diverse portfolio of clients from the USA, UK, Europe, Australia, and Singapore. This wide-reaching influence is a testament to their ability to adapt and excel in various technological domains, making them a reliable technology partner for companies across the globe.

Their expertise is particularly notable in aiding startups and SMEs to leverage the latest technologies for transformative business growth. InApps Technology has been instrumental in delivering innovative solutions across multiple sectors, helping businesses harness the potential of new technologies. Their work with clients like VLEPPO in Blockchain Development, BIDBID, QUALEE, and a Pharmacy Ecommerce Platform showcases their proficiency in handling complex projects and their commitment to driving technological advancement.

Conclusion

Choosing to outsource software development to Vietnam offers numerous advantages. By leveraging the country’s skilled workforce and cost-effective services, businesses can streamline their development processes. With a focus on quality and efficiency, outsourcing software development to Vietnam enables companies to access a pool of talented professionals at competitive rates. Additionally, the strategic location of Vietnam in the Asia-Pacific region provides convenient time zone compatibility for effective collaboration. As a result, companies can accelerate their product development cycles and stay ahead in today’s competitive market landscape. Overall, outsourcing software development to Vietnam proves to be a wise decision for businesses seeking to optimize their resources and achieve their goals efficiently.

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