IT experts have admitted that the global economic crisis is hitting the local software industry hard.
The sector usually predicted a minimum growth rate of at least 30 per cent, said Viet Nam Software Association (Vinasa) Chairman Truong Gia Binh.
"This year the figure might be at zero or just 10 per cent."
Last year saw the sector earning turnover of about US$600 million, 40 per cent of which came from exports.
Though well aware that software programmes and IT can help increase productivity, not many companies seem willing to pay for them.
According to the country director of Viet Nam IDC market research, Nguyen Lam, the economic crisis is forcing most local companies to cut spending on IT. This has meant fewer software contracts.
According to the latest figures released by the IDC, spending on IT this year is estimated to reach over US$2.2 billion, a reduction of $102 million compared with the company’s initial forecast.
"Local software processing firms are being hit by the global economic crisis," Lam said.
General Director of Misa Software Company Lu Thanh Long said many companies were cutting down production and spending to combat the effects of the crunch.
Consumers were watching their pockets and were more hesitant when buying the company’s products. Long said it was also difficult for the local software market to sell IT products to non-profit making companies. The Government’s appeal to cut 10 per cent of State budget spending had forced these companies to tighten their purse-strings, especially when it came to IT.
The crisis was either an opportunity or a challenge to the software industry, said Vinasa chairman Truong Gia Binh.
The chairman of leading Vietnamese outsourcing company TMA Solutions, Nguyen Huu Le, was also optimistic.
TMA Solutions have been supplying software research and development services to foreign telecommunication companies for 11 years.
"Many IT companies employ local workers to do research and development, especially as many are now cutting production."
The slump was a good chance for local software firms to provide new technology. Le cited the success of four mobile phone service providers, Viettel, VinaPhone, MobiFone and joint venture EVN Mobile-HT Mobile incorporation, who provide the third generation network (3G).
General Director of Misa Software Company Lu Thanh Long said he hoped the crisis would encourage business leaders to re-evaluate their management strategy.
"This would create an opportunity for software companies to sell new software programmes in management and business," he said.
