Leading Software Outsourcing Companies in Vietnam: Top 11 Partners in 2024

For SMEs with 50-200 employees or large enterprises with over 200, developing high-quality in-house software can be resource-intensive and time-consuming. As a result, many companies are outsourcing to meet their software development needs efficiently and cost-effectively.

However, choosing the right outsourcing partner is a significant challenge. With numerous global options, businesses often need help finding a reliable and skilled partner who understands their vision, offers transparent communication, and delivers high-quality products on time. Vietnam has emerged as a leading destination for software outsourcing due to its skilled workforce, competitive pricing, and growing reputation in the global tech market. Yet, with so many companies to choose from, how do businesses ensure they make the best choice for their specific needs?

How can businesses select the right software outsourcing partner in Vietnam that aligns with their goals and guarantees a successful collaboration?

This expert guide will provide a step-by-step approach to help you make an informed decision when outsourcing software development in Vietnam. We will highlight the key benefits of outsourcing to this thriving tech hub and recommend the Top 11 Software Development Outsourcing Companies in Vietnam, including why Groove Technology stands out as a trusted partner. Discover how outsourcing to Vietnam can boost your business efficiency and help you achieve scalable growth.

Why Choose Vietnam for Software Development Outsourcing?

Vietnam's rise as a software outsourcing destination is no coincidence. The country offers a unique blend of cost-effectiveness, technical prowess, and a favorable business environment, making it an attractive option for companies from Australia, Europe, and the UK.

MarketInsider claims Vietnam is a top outsourcing destination, attracting tech giants like Microsoft, Intel, and IBM to invest in software development. The popularity of Vietnamese software outsourcing among major corporations suggests that Vietnam is a highly capable and reliable choice for such projects. This recognition stems from several key factors:

1. Competitive Costs: Vietnam offers significant cost savings compared to many Western countries, with software development rates often 50-70% lower.
2. Skilled Workforce: The country boasts over 400,000 IT professionals, with approximately 50,000 IT graduates entering the workforce annually.
3. Strong Technical Skills: Vietnamese developers are particularly proficient in popular technologies such as Java, Python, and mobile development
4. Government Support: The Vietnamese government has implemented policies to support the IT industry, including tax incentives and infrastructure development.
5. Cultural Compatibility: Vietnamese culture emphasizes hard work, dedication, and a strong work ethic, which aligns well with Western business practices.

For businesses in Australia, Europe, and the UK, Vietnam's offshore model offers several advantages:

• Time Zone Compatibility: Vietnam's time zone (GMT+7) allows for significant overlap with Australian business hours and partial overlap with European time zones, facilitating real-time communication.
• English Proficiency: English is widely taught in Vietnam, and many IT professionals possess strong language skills. The EF English Proficiency Index ranks Vietnam 60th out of 111 countries.
• Long-term Partnership Potential: Many Vietnamese outsourcing companies focus on building lasting relationships, which can lead to more stable and productive collaborations over time.

Average Cost of Outsourcing to Vietnam Explained

When considering software outsourcing to Vietnam, understanding the cost structure is crucial. While exact figures can vary based on project complexity and specific requirements, we can provide a general overview. The average hourly rates for software development in Vietnam typically range from:

• Junior Developer: $15 – $25 per hour
• Mid-level Developer: $25 – $40 per hour
• Senior Developer: $40 – $60 per hour

These rates are significantly lower compared to those in Western countries. For instance:

• In the US, average rates range from $60 – $150 per hour
• In Western Europe, rates typically fall between $40 – $120 per hour
• In Australia, rates can range from $70 – $150 per hour

It's important to note that these are average figures, and actual costs can vary based on project complexity, technology stack, and the specific outsourcing company.

For example, a mid-sized e-commerce project that costs $150,000 – $200,000 in the US could be completed for $75,000 – $100,000 in Vietnam, representing savings of up to 50%.

However, it's crucial to remember that cost should not be the sole determining factor. The quality of work, communication efficiency, and long-term reliability are equally important considerations when choosing an outsourcing partner.

How to Choose the Right Outsourcing Partner in Vietnam

Selecting the ideal software outsourcing partner in Vietnam requires comprehensively evaluating various factors. Let's explore the key aspects to consider when making this crucial decision.

Evaluation criteria for outsourcing companies

Several critical factors must be considered when assessing potential software outsourcing partners in Vietnam. These include the company's experience in your industry, overall size and stability, technological expertise, development methodologies, quality assurance processes, and communication capabilities. Evaluating these criteria helps ensure that the outsourcing partner meets your project requirements and aligns with your business goals.

Experience demonstrates a company's ability to handle diverse projects, while size often correlates with resource availability and stability. Technological prowess is crucial for delivering high-quality solutions, and established development methodologies ensure efficient project execution. Robust quality assurance processes are vital for maintaining product standards, and effective communication is key to successful collaboration.

A strong outsourcing partner in Vietnam should excel in at least 70-80% of these criteria. They should have a proven track record of successful projects, a stable team of skilled developers, expertise in relevant technologies, and clear communication channels. Additionally, they should demonstrate a commitment to quality through certifications like ISO 9001 or CMMI.

Significance of industry experience

Industry-specific experience plays a crucial role in the success of outsourcing projects. When an outsourcing partner has deep knowledge of your industry, they can better understand your unique challenges, regulatory requirements, and market dynamics. This expertise allows them to provide more targeted solutions and valuable insights throughout development.

For instance, familiarity with HIPAA compliance and electronic health record (EHR) systems is essential in healthcare software development. Understanding financial regulations, security protocols, and payment gateway integrations in fintech is crucial. E-commerce projects require expertise in inventory management systems, payment processing, and user experience design optimized for online shopping.

In Vietnam, the most common industries for software outsourcing include e-commerce, fintech, healthcare, education technology (ed-tech), and logistics. Many Vietnamese outsourcing companies have developed strong portfolios in these sectors, making them well-equipped to handle projects across various domains.

Key questions for potential partners

When evaluating potential outsourcing partners in Vietnam, asking the right questions can provide valuable insights into their capabilities and working style. Here are some crucial questions to consider:

1. What is your experience in our specific industry, and can you provide case studies of similar projects?
2. How do you ensure effective communication and manage potential language or cultural barriers?
3. What is your typical project management approach, and how do you handle changes in project scope?
4. How do you protect intellectual property and ensure data security?
5. What is your quality assurance process, and how do you handle bug fixes and maintenance?
6. How do you manage resource allocation and team scalability for projects?
7. What technologies and tools does your team specialize in, and how do you stay updated with industry trends?

Asking these questions helps you gauge the outsourcing partner's expertise, working methods, and alignment with your project needs. It also demonstrates their communication skills and problem-solving approach, crucial for a successful outsourcing partnership in Vietnam.

Assessing developer technical skills

Evaluating the technical skills of developers in Vietnamese software outsourcing agencies is crucial for ensuring project success. There are several effective methods to assess these skills:

1. Technical interviews: Conduct in-depth interviews focusing on problem-solving abilities, algorithmic thinking, and specific technology expertise.
2. Coding tests: Utilize platforms like HackerRank or Codility to assess coding proficiency in relevant programming languages.
3. Portfolio review: Examine past projects and contributions to open-source repositories to gauge real-world experience.
4. Pair programming sessions: Engage in collaborative coding exercises to evaluate problem-solving approaches and coding practices.
5. Technical certifications: Look for relevant certifications in specific technologies or methodologies.

For example, a company might use a combination of these methods, such as a HackerRank test focusing on algorithmic skills, followed by a system design interview for senior roles. Additionally, they might request a code review of a small project to assess code quality and documentation practices.

Impact of company culture on partnership

Company culture plays a significant role in the success of outsourcing partnerships, especially when working with Vietnamese companies. A strong cultural fit can lead to better communication, increased productivity, and a more harmonious working relationship.

When outsourcing to Vietnam, consider these cultural aspects:

1. Communication style: Vietnamese culture often emphasizes indirect communication. Understanding this can help interpret feedback and manage expectations.
2. Hierarchy and respect: There's often a strong respect for authority and seniority. This can impact decision-making processes and team dynamics.
3. Work ethic: Vietnamese professionals are known for their strong work ethic and dedication, which can be a significant asset to projects.
4. Flexibility: Many Vietnamese companies demonstrate adaptability in working hours to accommodate international clients.
5. Relationship-building: Building personal relationships is often valued in Vietnamese business culture, which can lead to stronger, long-term partnerships.

Understanding and aligning these cultural aspects with your own company's values can significantly enhance the effectiveness and longevity of your outsourcing partnership in Vietnam.

Top 11 Software Development Outsourcing Companies in Vietnam

Now, let's explore some of Vietnam's leading software outsourcing companies. Each of these companies has demonstrated excellence in their field. However, evaluating them based on your specific project needs is important.

Groove Technology

Founded in 2016, Groove Technology has quickly established itself as a prominent player in the Vietnamese software outsourcing landscape. With offices in Ho Chi Minh City, Vietnam, and Melbourne, Australia, Groove Technology offers a unique blend of Eastern efficiency and Western business practices.

Key Services: Custom software development, web and mobile app development, IoT solutions, DevOps, and QA services.

Strengths:

• Easy onboarding process that seamlessly integrates with clients' existing development frameworks (Agile, Scrum, Kanban, etc.)
• Proactive communication style, with engineers who clarify questions and align expectations
• Transparent cost management with detailed breakdowns and performance incentives
• Upfront cost finalization with flexibility for scaling needs
• Rigorous recruitment and certification process for developers, ensuring technical proficiency and positive attitudes
• Team of over 230 skilled technology professionals
• Strong presence in Australia, UK and Europe
• Track record of over 120 successfully completed projects
• Flexible resource solutions through Staff Augmentation and Dedicated Team models
• ISO 27001 certified, demonstrating robust information security practices
• Focus on simplified software outsourcing experience

NashTech

NashTech, part of the Nash Squared group, has operated in Vietnam since 2000. With over 2,000 employees, it's one of the larger players in the market.

Key Services: Software development, cloud services, data analytics, and digital transformation.

Strengths:

• Long-standing presence in Vietnam
• Global delivery model
• Strong partnerships with technology leaders like Microsoft and AWS

TMA Solutions

Established in 1997, TMA Solutions is one of the pioneers in Vietnam's software outsourcing industry. With over 3,000 engineers, it's one of the largest software outsourcing companies in the country.

Key Services: Custom software development, testing services, AI and data analytics, IoT solutions.

Strengths:

• Extensive experience across various industries
• Strong R&D capabilities
• CMMI Level 5 certified

FPT Software

FPT Software, a subsidiary of FPT Corporation, is the largest software company in Vietnam. Founded in 1999, it has a global presence with offices in 26 countries.

Key Services: Digital transformation, AI, IoT, cloud services, and enterprise solutions.

Strengths:

• Vast resources and global delivery capabilities
• Strong government connections
• Expertise in emerging technologies like blockchain and AI

KMS Technology

Founded in 2009, KMS Technology has offices in Ho Chi Minh City and Atlanta, USA. It specializes in software development, testing services, and technology consulting.

Key Services: Custom software development, QA and testing, DevOps, and tech consulting.

Strengths:

• Strong presence in both Vietnam and the US
• Expertise in healthcare IT
• Focus on long-term partnerships.

Savvycom

Established in 2009, Savvycom is known for its expertise in mobile app development and emerging technologies.

Key Services: Mobile app development, web development, cloud computing, and IoT solutions.

Strengths:

• Award-winning mobile app development
• Strong focus on fintech and healthcare sectors
• ISO 9001:2015 certified

Designveloper

Founded in 2013, Designveloper is a younger player in the market but has quickly gained recognition for its design-centric approach to software development.

Key Services: Web and mobile app development, UI/UX design, and DevOps.

Strengths:

• Strong emphasis on user experience and design
• Expertise in the startup ecosystem
• Agile-focused development process

Saigon Technology

Since 2012, Saigon Technology has built a strong reputation for its expertise in Microsoft technologies and mobile app development.

Key Services: .NET development, mobile app development, web development, and cloud services.

Strengths:

• Microsoft Gold Certified Partner
• Strong focus on code quality and best practices
• Expertise in the finance and banking sector

Rikkeisoft

Founded in 2012, Rikkeisoft has grown rapidly to become one of the largest IT companies with over 1,000 employees.

Key Services: AI and machine learning, blockchain, IoT, and custom software development.

Strengths:

• Strong focus on emerging technologies
• Presence in Japan and the US markets
• Expertise in automotive and manufacturing sectors

CMC Global

CMC Global, a member of CMC Corporation, is one of the largest ICT groups in Vietnam. It has been operating in the software outsourcing market since 1993.

Key Services: Application development, IT infrastructure services, and digital transformation.

Strengths:

• Long-standing experience in the Vietnamese IT industry
• Strong government and enterprise clientele
• A comprehensive range of IT services

Orient Software

Established in 2005, Orient Software is known for its expertise in Java development and Agile methodologies.

Key Services: Custom software development, mobile app development, and QA services.

Strengths:

• Strong expertise in Java technologies
• ISO 9001:2015 certified
• Focus on long-term client relationships.

Best Practices for Successful Outsourcing to Vietnam

Implementing these best practices can ensure a smooth and productive outsourcing experience for Australian businesses looking to leverage Vietnam's software development talent.

Communication strategies with Vietnamese teams

Effective communication is crucial for project success when working with Vietnamese teams. Cultural differences and time zones can present challenges but can be overcome with the right approach. Establish clear communication channels and schedules that work for both parties, considering the 3-4 hour time difference between Australia and Vietnam.

For task tracking and progress updates, utilize project management tools popular in Vietnam, such as Jira, Trello, or Asana. Video conferencing tools like Zoom or Google Meet are essential for face-to-face interactions. Remember that Vietnamese communication can be more indirect, so encourage open dialogue and create an environment where team members feel comfortable asking questions and sharing concerns.

Project management for Vietnamese developers

Vietnamese software development companies typically follow Agile methodologies, with Scrum being particularly popular. This approach aligns well with software development's fast-paced, iterative nature and allows for project management flexibility.

To ensure timely project delivery, Vietnamese teams often implement regular sprint planning and review meetings, usually held every two weeks. Daily stand-ups are common for progress updates and addressing any blockers.

Many Vietnamese companies use burndown charts and velocity tracking to monitor project progress and team performance. Continuous integration and delivery practices are also widely adopted, helping to maintain code quality and facilitate frequent releases.

Quality control in outsourced projects

Quality control is a top priority for reputable Vietnamese outsourcing partners. Many implement comprehensive testing strategies, including unit testing, integration testing, and system testing, to ensure robust and reliable software. Automated testing tools like Selenium and JUnit are widely used to improve efficiency and consistency in the quality assurance process.

Code reviews are typically conducted regularly, often using platforms like GitHub or Bitbucket, to maintain code quality and share knowledge within the team. Vietnamese outsourcing companies often track key performance indicators (KPIs) such as defect density, code coverage, and customer satisfaction scores to measure and improve quality over time. Some companies also adhere to international quality standards like ISO 9001 or CMMI.

Building long-term partnerships

Establishing a long-term partnership with your Vietnamese outsourcing team can increase efficiency, help you better understand your business needs, and ultimately provide higher-quality output. Invest time in understanding each other's business cultures to foster such relationships.

Consider organizing cultural exchange sessions or visits to each other's offices. Involve the outsourcing team in strategic discussions about your projects and company goals to make them feel like an extension of your in-house team.

Provide opportunities for skill development and growth, which can increase team loyalty and motivation. Recognizing and rewarding good performance, perhaps through bonuses or public acknowledgment, can strengthen the partnership.

Intellectual property protection

Intellectual property (IP) protection is a critical consideration when engaging in offshore software outsourcing to Vietnam. Proper IP safeguards are essential to protect your company's innovations, provide a clear framework for ownership and usage rights, and reduce potential disputes. Here are some key strategies to effectively protect your intellectual property:

1. Comprehensive Non-Disclosure Agreements (NDAs):

• Sign detailed NDAs with your outsourcing partner before sharing any sensitive information.
• Ensure NDAs cover all employees and subcontractors who may access your IP.
• Include specific clauses on confidentiality, non-compete, and non-solicitation.

2. Clear Contractual Agreements:

• Define IP ownership explicitly in all contracts, specifying that all work produced belongs to your company.
• Include clauses on the transfer of rights, limitations on use, and obligations after contract termination.
• Consider having contracts reviewed by legal experts familiar with both international and Vietnamese IP laws.

3. Robust Access Controls:

• Implement strict access controls to source code and sensitive data.
• Use secure development environments and version control systems with detailed user permissions.
• Employ multi-factor authentication for critical systems.

4. Code Protection Techniques:

• Utilize code obfuscation techniques for critical components to make reverse-engineering more difficult.
• Consider splitting development tasks to limit full project visibility to any single developer or team.

5. Regular IP Audits:

• Conduct periodic audits to ensure compliance with IP protection measures.
• Document all IP-related activities and maintain clear records of innovations and developments.

6. Employee Education:

• Ensure all team members, both in-house and outsourced, are educated on IP policies and their importance.
• Provide regular training on best practices for IP protection.

7. Leverage Local Expertise:

• Partner with Vietnamese legal experts who understand local IP laws and enforcement mechanisms.
• Stay informed about Vietnam's evolving IP protection landscape and international agreements.

8. Technical Measures:

• Use digital watermarking or fingerprinting techniques for sensitive documents and software.
• Implement secure file transfer protocols and encrypted communication channels.

9. Phased Disclosure:

• Share IP on a need-to-know basis, revealing sensitive information incrementally as the project progresses.

10. Exit Strategy:

• Develop a clear plan for IP handling upon project completion or contract termination.
• Include provisions for the return or destruction of all IP-related materials.

It's important to note that Vietnamese outsourcing companies are increasingly familiar with international IP laws and are often willing to comply with stringent protection measures. Many have established robust internal policies to protect client IP, recognizing that strong IP protection is crucial for building trust and long-term partnerships with international clients.

By implementing these comprehensive measures, companies can significantly mitigate IP risks when outsourcing to Vietnam, ensuring that their valuable intellectual assets remain protected throughout the development process.

Protecting intellectual property (IP) is crucial when engaging in offshore outsourcing to Vietnam. Proper IP protection safeguards your company's innovations and provides a clear framework for ownership and usage rights, reducing potential disputes.

FAQs

Is Vietnam a good alternative to India for software outsourcing?

Yes, Vietnam is increasingly seen as a strong alternative to India. While India has a larger IT workforce, Vietnam offers competitive advantages such as strong government support for the IT sector and a growing pool of young, skilled developers. According to the Tholons Services Globalization Index, Ho Chi Minh City is 54th, and Hanoi is 71st.

How does the quality of Vietnamese developers compare to those in Eastern Europe?

Vietnamese developers are generally considered to be on par with their Eastern European counterparts regarding technical skills. However, Vietnam often offers more competitive pricing. The SkillValue Report 2019 ranked Vietnam 29th globally regarding developer skills, close to several Eastern European countries.

What are the typical working hours for software development teams in Vietnam?

Most software companies in Vietnam operate on a standard 40-hour workweek, typically from 9 AM to 6 PM, Monday to Friday. However, many teams are flexible and can adjust their schedules to overlap with their clients' time zones when necessary.

Can Vietnamese outsourcing companies handle projects for highly regulated industries?

Many Vietnamese outsourcing companies have experience working with highly regulated industries such as finance and healthcare. They know international standards and regulations like GDPR, HIPAA, and PCI-DSS. However, verifying a company's specific experience and certifications in your industry is crucial.

How does Vietnam compare to other Southeast Asian countries regarding software outsourcing?

Vietnam is often considered a leading software outsourcing destination in Southeast Asia. Compared to countries like the Philippines or Malaysia, Vietnam often offers a larger pool of IT talent and more competitive rates. The AT Kearney Global Services Location Index 2019 ranked Vietnam 5th in Asia for outsourcing attractiveness.

Conclusion

Vietnam's software outsourcing industry offers a compelling blend of technical expertise, cost-effectiveness, and a supportive business environment. By understanding the landscape, carefully evaluating potential partners, and implementing best practices, businesses can leverage Vietnam's IT talent to drive their digital initiatives forward.

Remember, successful outsourcing is finding the lowest cost and building a partnership that adds value to your business. Whether you're a startup looking for agile development support or an enterprise seeking digital transformation expertise, Vietnam's top software outsourcing companies are well-equipped to meet your needs.

As you embark on your outsourcing journey, consider contacting some of the companies mentioned in this guide. With its commitment to simplifying the outsourcing process and high client retention rate, Groove Technology could be an excellent starting point for your exploration of Vietnam's software outsourcing capabilities.