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 industry development.

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 development.

Any further policy deliberations will have to consider how a Vietnamese software industry will be able to overcome the following obstacles. (1)

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."

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 developer.

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.

Foot Notes:
  1. Cf. a similar analysis in UNISYS, A strategic review of national information technology development, Vol 2, Hanoi, 1993, p. 27 etc.

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