Vietnam Information Technology Report Q2 2012

Vietnamese IT spending is expected to reach US$2.5bn in 2012, up 14%, with BMI upwardly revising its forecast after the PC market reported double-digit growth in H111. Factors such as rising PC penetration, economic growth, a range of government ICT initiatives and a drive to develop Vietnams domestic IT industry will help to sustain continued expansion going forward. Vietnams improving ICT infrastructure will also drive the development of the nations IT market in a country with below 20% PC penetration.

Headline Expenditure Projections

Computer hardware sales: US$1.6bn in 2011 to US$1.8bn in 2012, +12% in US dollar terms.

Forecast in US dollar terms upwardly revised due to stronger than expected retail sales growth in 2011.

Software sales: US$187mn in 2011 to US$220mn in 2012, +18% in US dollar terms.

Forecast in US dollar terms upwardly revised due to analyst modification but will depend on the success in bringing down illegal software use.

IT Services sales: US$396mn in 2011 to US$369mn in 2012, +19% in US dollar terms.

Forecast in US dollar terms upwardly revised due to analyst modification with growing demand for digital infrastructure projects in segments such as banking, telecoms, energy and government.

Risk/Reward Ratings

Vietnams score was 33.2 out of 100.0. Vietnam ranks 11th in our latest Asia RRR table, ahead of Sri Lanka. The country ranked ninth for its IT market score of 36.

Key Trends & Developments

- The Vietnam IT market is expected to grow around 12% in 2012. Government and business IT spending remain subject to fiscal restraints and external economic headwinds, and the devaluation of the dong will also inhibit demand. However the Vietnamese economy is expected to remain generally strong and drive growth in IT investments.

- In 2011, a number of government ministries and organisations, including the Ministry of Education and Training, started to promote the roll-out of cloud services. Plans to modernise IT in government agencies and the customs department, as well as the Tax Administration Modernization Plan for 2008-2013 represent opportunities for vendors of IT products and services.

- An ambitious government IT plan for 2010-2020 should shape many segments of the Vietnamese IT market.The governments increasing focus on encouraging ICT development and foreign investment in the tech sector will also create opportunities. Many of the governments ICT development plans and programmes are still in a nascent stage and their ultimate effectiveness is yet to be determined.

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