Software firms look to home

The Hanoi Times - Software companies are setting their targets o­n the domestic market in response to negative impacts at the international level.

Since early this year, these enterprises have suffered from obvious strains due to the global economic recession. Software exports are down as a result of tightened spending among their partners, particularly in the US and Japan.

Phan Quang Minh, business development director for Tinh Van Technology Stock Company, said that despite a company growth rate of 60 per cent last year, and being selected by IBM as its partner for outsourcing software products, clients in the US had not paid debts worth US$60,000.

"We think that they have refused to pay their debt. However, we also hope that when the global economy is better, our company may have a chance to retrieve the debt. We have asked the company to keep a record of the debt for the future," he said.

Other companies are facing the same situation, according to Pham Tan Cong, general secretary of the Viet Nam Software Association (Vinasa).

"Last year was a tough year for us. Software companies should have growth of more than 50 per cent but their actual growth was o­nly 20 per cent, in comparison with that of 2007," he said.

Many software companies have developed products to fulfil contracts o­nly to find that clients have cancelled the orders. Some have reported that their foreign clients haven’t paid for delivered orders. To top it all off, domestic enterprises have also reduced spending, meaning that software development investment is limited.

Software sector revenue for last year is expected to come in at a $600 million gain, an increase of 20 per cent compared to 2007. This figure is much lower than the 35 per cent increase forecasted early last year, and lower than the 35-40 per cent growth target issued by the Prime Minister in April 2007 for software development until 2010.

In the early months of this year, Vinasa boosted development activities in the domestic market in addition to its advertisements and marketing activities in international markets. Most of the international focus is o­n Europe, Japan and the USA, with Viet Nam Outsourcing forums also being held in Japan and Germany to help enterprises gain access to their clients, said Cong.

As part of the domestic marketing activities, Vinasa for the first time will organise a mobile show, called the Software Road Show, to be held in co-ordination with cities and provinces to introduce products and services to clients nationwide.

Vinasa will also implement a survey to write a report about, and for, the Vietnamese software industry.

Experts have said that 2009 will be a challenging year for the industry as a result of the 2008 crisis. However, it will be also an opportunity for Vietnamese software enterprises to develop.

Nguyen Manh Hai, technological director of the EDT software company, said that software companies that move in the right direction and make effective investments in this time of crisis would, in the end, have more advantages than other companies for long-term survival.

The lower work load that comes as a result of the crisis would provide enterprises with the opportunity to restructure and strengthen, particularly related to human resources development, said Hai.