IT Outsourcing - Vietnam

Vietnam

The IT Outsourcing market in Vietnam is expected to witness significant growth in the coming years.
According to projections, the revenue in this market is set to reach US$694.80m in 2024.
Furthermore, it is anticipated that the market will experience a compound annual growth rate (CAGR) of 12.23% from 2024 to 2029, resulting in a market volume of US$1,237.00m by 2029.
One key indicator of the market's potential is the average Spend per Employee, which is projected to reach US$12.14 in 2024.
This suggests that companies are investing in IT Outsourcing market services to enhance their operations and remain competitive in the global market.
In terms of global comparison, United States is expected to generate the highest revenue in the IT Outsourcing market, with a projected revenue of US$197.30bn in 2024.
This highlights the dominance of the United States in the industry and its significant contribution to the global market.
Overall, with its favorable business environment and skilled workforce, in Vietnam is well-positioned to capitalize on the growing demand for IT Outsourcing market services.
The projected revenue and growth rate indicate a promising future for the country's IT Outsourcing market.
Vietnam is emerging as a competitive player in the IT outsourcing market, offering cost-effective solutions and a skilled workforce.

Key regions: Brazil, Italy, United States, China, Germany

Definition:
The IT Outsourcing market refers to the external contracting of IT functions, services, or projects instead of relying on company-owned resources. By outsourcing IT tasks (e.g., to IT suppliers or software developers), enterprises are able to focus on their core functions and save internal resources and costs (e.g., office space, maintenance, and utilities). Thus, outsourcing teams becomes a viable cost resilience strategy in an environment where companies are looking to save money more than ever.

In an IT context, these activities include IT administration, IT application, and web hosting services. Non-IT-related outsourcing services are excluded.

Structure:

IT Outsourcing contains four distinct markets that are based on different services:

Administration Outsourcing refers to the market for services associated with the external sourcing of typical IT administration tasks such as hardware supply, setup, configuration, maintenance, security, and support.
Application Outsourcing refers to the market for all IT application services in a software production context, spanning from requirement assessments to concept and design of software applications.
Web Hosting includes all types of internet hosting services that allow companies or individuals to provide access to their web page via the World Wide Web.
Other IT Outsourcing refers to aggregated revenues of the types of IT outsourcing that are not specifically mentioned in the other IT Outsourcing markets, such as infrastructure outsourcing, network outsourcing, and managed services.

Additional Information:

The IT Outsourcing market comprises revenues, revenue change, average spend per employee, and revenues of the outsourcing types. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Accenture, Capgemini, NTT, and Hewlett Packard Enterprise.

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Market

Region

Region comparison

Currency

Analyst Opinion

Vietnam has been a rising star in the IT outsourcing market in the past decade. The country has emerged as a key player in the global IT outsourcing industry, with a strong focus on software development, digital content, and business process outsourcing.

Customer preferences: Vietnam's IT outsourcing market has been driven by several factors, including its young and highly skilled workforce, lower labor costs compared to other countries, and favorable government policies. Additionally, Vietnam's location in Southeast Asia makes it an attractive outsourcing destination for companies in the region and beyond.

Trends in the market: One of the key trends in Vietnam's IT outsourcing market is the shift towards higher value-added services, such as software development and digital content creation. This is driven by the increasing demand for innovative and customized solutions from clients, as well as the growing capabilities of Vietnam's IT workforce. Additionally, there is a trend towards more collaboration between outsourcing providers and clients, with a focus on building long-term partnerships and co-creating solutions. Another trend in Vietnam's IT outsourcing market is the increasing adoption of emerging technologies such as artificial intelligence, blockchain, and the Internet of Things. This is driven by the growing demand for digital transformation across industries, as well as the availability of a skilled workforce and supportive government policies.

Local special circumstances: Vietnam's IT outsourcing market is also shaped by several local factors, including the country's strong educational system and its cultural affinity with Western countries. Vietnam has a large pool of highly educated and tech-savvy young professionals, many of whom have studied or worked abroad and are familiar with Western business practices and culture. This makes it easier for outsourcing providers to work with clients from Western countries and other regions.

Underlying macroeconomic factors: Vietnam's IT outsourcing market is also influenced by broader macroeconomic factors, such as the country's economic growth and political stability. Vietnam has been one of the fastest-growing economies in the world in recent years, with a stable political environment and a government that is supportive of the IT industry. Additionally, Vietnam's membership in the ASEAN Economic Community and other regional trade agreements has helped to open up new markets for its IT outsourcing industry.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.