Vietnam Software Outsourcing: Benefits, Cons, Top Companies

The use of software outsourcing services is on the rise, and it's not just for cost-savings or time efficiency. There are plenty more reasons why companies choose this route! Software outsourcing has been around for years and many companies have been taking advantage of it. In the past China and India were probably the best outsourcing locations, but things have changed.

Companies have been outsourcing software development to China and India, but also South America, Eastern Europe, and Southeast Asia. But right now, Southeast Asia is the best place to get it done. Think of countries like Vietnam, Thailand, Myanmar, Cambodia, Malaysia, and Indonesia. Many of these countries offer great software outsourcing services, but Vietnam leads the pack by a long shot and we will discuss why that is in a bit. In this article we will cover all you need to know about outsourcing software development to Vietnam. The benefits, challenges, how to do it right, and the best companies to work with.

Key Benefits of Software Outsourcing to Vietnam

Let’s discuss the five benefits of outsourcing software development to Vietnam:

Lower Costs

The primary reason why companies outsource software development to Vietnam is because it's so much cheaper than doing the work in-house.

The average annual salary of a software engineer in the United States according to Salary Explorer is 91,900 USD per year, while in Vietnam, it’s around 208,800,000 VND per year (8,419 USD).

In Australia, software developers earn around 91,700 AUD per year (61,546 USD). In The UK, 66,400 GBP per year (78,821 USD). And In Singapore, 93,120 SGD per year (67,776 USD).

From the above it's easier to see that in Vietnam, software developers earn much less than in more developed countries. This means that software companies in Vietnam need to pay their developers much less than companies in the US for example. Because of this, they can charge their clients less for software projects.

But this isn't all. With the low cost of living in Vietnam, operational costs like office space rent and electricity charges are also much lower than they would be elsewhere. This leads to further cost savings.

This is the best way for businesses with limited resources to save money. Outsourcing your software development tasks will allow you more time and space in order accomplish what matters most. This also means that instead of hiring in-house developers to maintain your project and dealing with all the management of that, you can focus on your core business goals and managing the team that handles that without ever having to worry about technical issue.

Vast Talent Pool

Software developers are in high demand throughout Vietnam. The country is home to many talented individuals who specialize in providing cutting edge technology solutions, including mobile app design and development as well machine learning models, AI and other emerging technologies.

What makes Vietnam different that other countries is that most people are already introduced to coding at school during the 8th grade. By starting to code from a young age, developers are able to get experience and by the time they graduate from university they are ready to hop on to a big project without any additional training. Most programmers in Vietnam right now are also millennials aged between 20 and 35 years old, making them more energetic, adaptable and exited to do big things in their field.

Besides that, the Vietnamese government knows the importance of technology in the countries future and growth and is actively working with companies to improve computer science education from the foundational ages. This alongside English language education is helping the country create a vast talent pool of software engineers and technology enthusiasts.

High-Quality Services

Vietnamese software companies are known for their high-quality services, which they provide with the latest technologies and a top notch tech infrastructure. You can be assured of high-quality work when you hire a software development outsourcing company in Vietnam. Vietnamese software companies have solid teams and are committed to meeting deadlines, which will save your business time from having to deal with any issues that arise during the process.

Round The Clock Services

Something that businesses need to take into account when working with an offshore development company is the timezone. Some projects require round the clock development, some projects require real time communication, and others are flexible on communication.

Companies in the United States, United Kingdom, and Europe like the idea of round the clock development, and by outsourcing to Vietnam, they get just that. Round the clock development essentially means once the work day in the US ends, it continues in Vietnam, so once the US team wakes up the next day, they can view the work the Vietnam company did while they were sleeping. By doing this, they are essentially working while they sleep, making this a very attractive benefit of outsourcing software development to vietnam.

For projects that require real time communication you want to work with a company in a similar time zone. For example countries like Singapore, Malaysia, Australia, New Zealand, Hong Kong would benefit by being located on a similar time zone to Vietnam so it's easy to set meetings as both companies would have similar office hours.

Some projects just need to be built and don't require real time communication and it this case it's also easy for companies all around the world to outsource to Vietnam as communication can be scheduled when convenient for both sides even though one teams office hours will be different to the others.

Main Challenges of Software Outsourcing to Vietnam

Let's take a look at some of the main challenged companies face when outsourcing to Vietnam:

Language Barrier

English is the global business language so if you're working with a company in a country besides your own, it's very likely that both companies will use English to communicate. For a partnership to be successful between 2 companies there needs to be good communication, and this means that both companies should be fluent in the English language.

The official language in Vietnam is Vietnamese and not everyone can speak English. This is changing very quickly though as the government is pushing English language education in order for people to be more competitive at work. In Vietnam, speaking English is essential for higher paying jobs so you will find that it's more commonly spoken in big cities such as Ho Chi Minh City, Hanoi, and Da Nang. As of now just over 50% of the population speaks fluent English, and this is going to increase over time.

Software developers generally have a good understanding of the language as most programming resources are in English and they are forced to learn the language mush faster.

But this isn't an issue anymore if you want to work with an outsourcing company in Vietnam. A good company will have English speakers to communicate to their clients and it's possible that the company might even be owned by an English speaking foreigner. So just make sure the team you work with speaks your language and all will be good!

Different Time Zone

As we discussed in the benefits of outsourcing to Vietnam, if your company is located in the United States or United Kingdom, the timezone difference could be considered an issue. But this is actually more of an advantage. As your day comes to an end, there day is just about to start, and having a team active 24 hours a day is a strong competitive advantage.

Cultural Differences

When you work with a company in a different country, one of the inevitable things you need to deal with is cultural differences. This is both work and non work related. Teams in different countries might have a different approach to working and also communicating. This isn't much of an issue but a good pointer her is to focus on good communication to ensure that there are no misunderstandings and thigs will flow smoothly.

The best software outsourcing companies in Vietnam have international teams with people from all different countries and also have experience working with companies in multiple countries so it will be much easier to work with a company like this.

Top Software Services to Outsource to Vietnam

App Development

App development could be either mobile, web, or desktop application development. Mobile app development means building an app for Android and iOS devices and this is typically done with Kotlin and Swift or a cross-platform framework such as React Native or Flutter. Web app development means building an application for web. Web applications are built to be responsive to all screen sizes from mobile to desktop. The most popular web development languages and frameworks in Vietnam right now are Javascript, React, Node, Vue, Python, and Django.

AI And Machine Learning

As the field of artificial intelligence continues to grow, companies are looking for ways to integrate machine learning into there software products.

Intelligent Automation

By creating smart bots companies can automate certain tasks. These bots operate 24 hours per day with a 100% accuracy making it a very attractive option for companies. By integrating AI into these bots they can operate smartly and make decisions based on past data, taking automation to the next level.

Onshore vs Offshore Software Outsourcing

With outsourcing software development, there are 3 main services companies provide. Nearshoring, offshoring, and onshoring. Let's take a look at that the differences are:

Onshoring

Onshoring means that you would outsource your software development needs to a company in the same country as you are located. This means that they will handle all your development so you don't need to manage a technology team. This could be beneficial because you will work on the same or similar time zone, speak the same language, and understand each others culture, which makes it easy to communicate. This can be very beneficial if your team has no experience working, hiring, training, and managing developers. You will essentially be able to access all those expertise by working with an onshore software development company.

Offshoring

Outsourcing means that you would work with a company in a different country than yours to handle your software development. For example companies in the United States, Australia, United Kingdom, Japan, or Singapore might work with an offshore development center in Vietnam. Similarly to onshoring this moves the need to worry about anything technical to another entity. But this provides additional benefits, mostly relayed to cost savings and access to talent. A country like Singapore is one of the largest startup hubs in Asia, but it's a relatively small country so companies often need to look offshore to find more developers. The challenges with this is possible time difference, language barrier, and cultural differences, but most companies understand those and make sure to make the partnership as easy as possible.

Nearshoring

Nearshoring is pretty much the interchangeable with outsourcing. This just suggests that the country you chose to outsource to is nearby or neighboring yours. If your company is in Singapore and you outsource your development to Vietnam, this could be considered nearshoring. There are some additional benefits to this, like having easier access by flights for in-person meetings, similar time zone, and possible a better understanding of the country and work culture.

Best Cities for Outsourcing Software Development In Vietnam

Vietnam is a great place to develop your business for the best outcomes. The three famous cities that provide top software development services are Ho Chi Minh City, Da Nang, and Hanoi. Let's take a look at which cities are the best for outsourcing in Vietnam:

Ho Chi Minh City

Located in southern Vietnam, is the business capital of Vietnam, Ho Chi Minh City, or Saigon as it is sometimes called. This is the goto place if you want to find a software development company in Vietnam. The city is where you will find most startups, software developers, investors, and software projects. Ho Chi Minh City University of Science, Ho Chi Minh City University of Technology, and University of Information Technology, are some of the popular universities in Ho Chi Minh City, that produce excellent software engineers. Infact, Ho Chi Minh City University of Science was ranked 3rd in the world for producing the best coders. So it's easy to see why there are so many software companies located here with the vast talent pool.

Da Nang

Located in central Vietnam is the coastal city, Da Nang. This city is known as a holiday and lifestyle destination with amazing beaches and resorts, but it is also an upcoming startup and digital nomad hub in Vietnam. The lower cost of living, high quality of life, strong community, and strategic location make the city attractive to tech startups. The city is also home to the well-known Da Nang University of Technology, which is one of the best universities to learn software engineering in Vietnam. The university produces thousands of skilled software developers every year. Because of this there is a large number of developers working in Da Nang.

Hanoi

Located in the north of Vietnam is Hanoi, the capital of Vietnam and the place best known for politics and manufacturing. Here you can find the popular Hanoi University of Science and Technology which produces thousands of skilled software engineers every year. The city is the second largest in Vietnam and there are many software developers living here.

Top Software Outsourcing Companies in Vietnam

The software development outsourcing industry in Vietnam is booming and there are many companies to choose from. However, it's important not only determine what you need but also how much time or money will be spent on your project before making an investment. So here is a list of some of the best software outsourcing companies in Vietnam:

Potado

Potado is a top software outsourcing company in Vietnam that works with companies all around the world to build software products.

Potado is actually based in Singapore, but due to a shortage of talent in the small country, they needed to look elsewhere to expand their development. After extensive research, they decided on Vietnam and the reason why Potado is so good at working with international companies, is because they had to learn about outsourcing the same way that you need to. Now they have offices in both Singapore and Vietnam and works with clients from all around the world.

Website: https://potado.co

Saigon Technology

Saigon Technology is a leading software outsourcing company in Vietnam with a team of over 350 developers. They are experts in agile development and have over 10 years experience in the IT industry. They specialize in the healthcare, retail, and banking industries, but work on projects across all industries. They do everything from mobile app development and web development, to devops and cloud migration. They work with clients from Australia, New Zealand, Japan, Singapore, Hong Kong, the USA, Canada, and Europe. Some of their notable clients include Panasonic, Abbott, DMI, and Standard Chartered. They are also a gold certified Microsoft partner, and a certified great place to work. They have offices in Ho Chi Minh City, as well as Da Nang and Singapore.

Website: https://saigontechnology.com/

Orient Software

Orient Software is a company that specializes in providing quality software development services. They do so by adhering to the fundamental principle of ethics, collaboration and tenacity while responsibility prevails throughout all their work processes from project planning and development to testing & deployment. With a team of over 350 developers, they have worked with more than 100 clients around the world. They do everything from software development and maintenance, to internet of things and artificial intelligence solutions. Orient has 8 office locations around the world, with their head office being in Ho Chi Minh City. They have been certified as a Microsoft partner, and a Microsoft Azure developer, as well as an AWS cloud practitioner.

Website: https://www.orientsoftware.com/

Adamo Software

Adamo is a software development company with expertise in mobile and web-based enterprise solutions, as well other areas such as web application & portal development. They have extensive business domain experience which they put towards providing timely services to their clients while delivering high value projects that are ahead of the curve technology wise! They are based in Hanoi and work with clients located in Vietnam and abroad. Some of their notable clients include Dishdash, Magpie, and DoIt Consulting.

Website: https://adamosoft.com/

TP&P Technology

TP&P Technology is a leading software development and software outsourcing provider in Vietnam. They have their head office in Hanoi and their development center in Ho Chi Minh City.

Website: https://www.tpptechnology.com/

S3 Corporation

S3 Corporation was founded in 2007. This IT outsourcing vendor provides a full range of software development services from start to finish, including product verification and automation testing for overseas clients looking for quality results at an affordable price point that they can rely on! With over 200+ talented employees working together as one team S3 has delivered countless high impact projects across multiple industries.

Website: https://www.s3corp.com.vn/

CMC Global

CMC Global is a software outsourcing company in Vietnam that provides highly-customized and quality services. The firm has an excellent track record for large scale projects, having worked on more than 200 successful ones with different clients across industries including finance, banking, and manufacturing.

Website: https://cmcglobal.com.vn/

Rikkeisoft

From a small group of six classmates in 2012, Rikkeisoft has grown to become one the most successful IT companies in Vietnam with more than 1,500 employees.

Website: https://rikkeisoft.com/

EZtek

The mission of Eztek is to make custom software engineering accessible for any company, no matter how big or small they may be. They have a team that can take your vision and turn it into reality with their skilled engineers who are passionate about what they do!

Website: https://www.eztek.vn/

AgileTech

In 2015, AgileTech was founded as a quality outsourcing company specializing in Website and Mobile Apps. Since then they have become the technology partner for many startups with millions of US dollars invested into them alone!

Website: https://agiletech.vn/

Final Thoughts

Software outsourcing in Vietnam is beneficial due to low costs, a large skill set and robust infrastructure. There are also drawbacks like language barriers that need be overcome but overall it's been quite successful for many organizations across industries with different needs when done right!

Hopefully this article will help you fully understand how to successfully outsource your software project. Vietnam is one of the best places you can do it right now and most companies are taking advantage of that.

There are many companies that offer outsourcing services in Vietnam and many of them produce excellent results, but at the end of the day the company you choose to work with will come down to your preference. So make sure to take all the above in consideration and choose a company that will help your company succeed.