Microsoft Corp (Nasdaq: MSFT) chair, Bill Gates, looks to Vietnam as new resource for outsourcing for the software giant. Gates is in Hanoi to meet with business and political leaders to discuss expanding relationships there for services similar to those conducted in India.
Gates met with Vietnam prime minister Phan Van Khai and President Tran Duc Luong before addressing students at the Hanoi University of Technology.
The Microsoft founder’s visit to Vietnam falls just months after Intel Corp (Nasdaq: INTC) said it would build a chip plant in Vietnam.
Lured by economic growth exceeding 8% a year and an estimated literacy rate of at least 90%, US hightech companies are beginning to see Vietnam as a viable market, despite the high rate of intellectual property theft which the US has objected to strongly.
Vietnam’s bulging population of 84 million people makes its growing economy one of temptation to foreign businesses looking to export goods there -especially hightech.
“In no sense should Vietnam specialise in manufacturing,” Gates said in reference to Intel’s recent announcement. “Vietnam should also focus on software development and outsourcing. There’s an opportunity to do call centres.”
Citing the example of India, Gates said “hopefully Vietnam can also be a country that grows the capacity to supply skills to other countries, including the US.”
The estimated value of Vietnam’s industry for software-related and information technology-related services was US$170 million in 2005, with the industry growing at an annual rate of about 40%, the Vietnam News reported today.
Vietnam now has about 600 software-development companies employing 15,000 workers, up from 170 companies employing 5,000 in 1999, according to the report.
Still, about 92% of software in Vietnam was pirated as of 2004, the highest rate in the world, according to the Business Software Alliance, a trade group funded by Microsoft.
Today, Microsoft signed an agreement Gates called a “milestone” accord with Vietnam’s ministry of finance, in which the ministry would become the first state body to use fully licensed software throughout its entire information technology system, according to a finance ministry press release.