Preconditions for expansion
Given the time available for our work in Vietnamese industry, we do not
have enough specific knowledge of the necessary skills and resources in
Vietnam in order to recommend a coherent strategy for the coming software
To develop a strategy for a Vietnamese software industry it will be
necessary to consider the various characteristics of the different software
markets listed above. Probably, there will be separate industry policy
approaches to each of these six or more markets.
The strengths and weaknesses of the software services offered in today's
Vietnam should be analyzed in detail while a government policy is being
formulated. To us, it is still unclear if the software services currently avail-
able on the Vietnamese market could be used as a basis for advanced software
Any further policy deliberations will have to consider how a Vietnamese
software industry will be able to overcome the following obstacles.
We support the movement to 'open systems' that facilitates inter-connections
and networking between computers and communication equipment of
different brands. We believe that it is excellent that the government in its
1993 national IT program strongly underlines the 'open systems' concept to
information interchange both generally and for specific projects: A
"computer system must follow certain standards (both the hardware and
software) so that it can be integrated into the National Network and be
compatible with international networks."
- A weak institutional support-structure: he software industry n Vietnam' cannot
expand because of inadequate legislation to protect intellectual property. It will not be
enough to formally establish a property-rights regime in Vietnam; it will have to be
enforced as well.
- Small domestic market: The current levels of demand for all kinds of computer
applications are not high enough to stimulate the creation of a large domestic
software industry. However, the Vietnamese market is now growing faster than
- Low levels of experience and a limited amount of expertise: The development of a
software industry in Vietnam is hampered by the considerable lack of experience and
low numbers of programmers, systems analysts, and project managers available in
the country. Cf. Chapter 10 above.
- Lack of development tools and weaknesses in methodology: There is a general lack
of standardized design and verification tools in Vietnam, which makes it difficult to
accumulate (and diffuse) experiences from different projects. Similarly, the ability to
re-use software components from existing applications is still underdeveloped. Due
to limited experience with large scale software development projects, computer
specialists in Vietnam tend to follow non-standardized approaches to design and
implementation of new programs; and often, for the same reason, there are
difficulties in specifying performance requirements before detailed design and coding
- No marketing tools and after-sales services: The Vietnamese software industry has to
build relatively advanced marketing competence and after-sales facilities, particularly
since it is entering the global market as a newcomer. Initially, this lack could be
compensated for if local firms act as subcontractors for internationally operating
firms. The software markets are dominated by companies with effective
organizations for world-wide marketing, distribution, and back-up service.
- Language difficulties: Competence in the English language will have to be improved
to match the requirements in the IT industries (e.g. for reading manuals, and
communicating with foreign vendors and customers). More and more, English is the
dominant language in this industry.
Such measures might actually provide important stimuli to a Vietnamese
software industry -- indirectly by increasing the general qualities of software
development and directly by linking local software development with systems
software and application programs developed internationally.
There are at least three trends in the global IT industry that could make
it difficult for a Vietnamese software company to enter the international
market without becoming a sub-contractor or partner to a foreign software
First, more and more advanced standard-package software is being
developed and delivered along with computer and communications hardware.
Products from local software developers will have to compete with packaged
software that is becoming available for more and more specialized
applications. The market dominance of a few operating systems (most notably
Microsoft Windows) and the decline of closed, proprietary systems (such as
Digital Equipment's VAX system) has made it possible to for software
companies to sell packaged software that is compatible with a large number
of installed systems.
Secondly, during the past few years, automation of coding and testing of
software is being introduced world-wide. It will probably be easier, with a
steadily decreasing number of personnel, to develop relatively large
computer applications programs using standardized programming method-
ology (including CASE tools). This trend might raise the entry barriers for
newcomers in the international software industry and cause less resourceful
companies to leave the international market.
Thirdly, it is not obvious that software development, production, and
service for the international marketplace will generate much new employ-
ment in Vietnam. With a decline in mainframe computing and an expansion
of small, inexpensive but powerful personal computers running standardized
programs, small, specialized software companies will find it difficult to
generate new job opportunities. Improved programming skills among the
end-users may also offset an expansion of software services.
Cf. a similar analysis in UNISYS, A strategic review of national information
Vol 2, Hanoi, 1993, p. 27 etc.
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