Dive Brief:
- Vietnam’s appeal as an IT offshoring destination is growing, CIO.com reports.
- IBM, Microsoft and Intel already have some operations in the country.
- Gartner recently ranked Vietnam a top five location for outsourcing.
Dive Insight:
Businesses that outsource projects are typically looking to gain efficiencies and cost savings. But as the middle class in emerging economies like India grows, those low labor rates may disappear, providing less incentive to outsource. But Vietnam’s technical talent, retention rates and modern tech infrastructure as well as its reasonable rates mean it’s catching the attention of tech companies big and small.
“The Vietnamese have a very strong desire to work with other parts of the world because they value the positive flow of money and funding coming into their country,” Anna Frazzetto, chief digital officer and senior vice president at recruiting firm Harvey Nash, told CIO. “All the big players are setting up their own facilities. If the companies that are the gold standard in technical competency are setting up house in Vietnam, that says a lot about the technical talent Vietnam is offering.”
In May, IDC reported that the average size of IT outsourcing deals has become smaller. The average deal size of the top 100 global outsourcing contracts was $680 million in 2005. In 2015, the average deal size fell to $392 million.
