BUSINESSWEEK ONLINE : NOVEMBER 27, 2000 ISSUE
INTERNATIONAL -- ASIAN COVER STORY Rewriting the Rules (int'l edition) To cash in on the IT boom, Hanoi is revising its restrictive Internet policies Two years ago, David Appleton was looking for an Asian base for his software outsourcing company. He visited Thailand, the Philippines, and, of course, India. Then, on a whim, he flew to Ho Chi Minh City. Appleton, who is British, liked what he saw. Vietnam boasted an abundance of well-trained engineers. And they were thrilled to work for $300 a month--half the wages demanded by Indian engineers. Rents were cheap, and the government was proffering a four-year tax holiday. Appleton went for it. Today his company, SilkRoad Systems (Vietnam) Ltd., employs 30 programmers and attracts such blue-ribbon clients as Merrill Lynch & Co. (MER) and Jardine Fleming Securities (JFC). Last year, it broke even on sales of $1.5 million. Says Appleton: ''These programmers are the best I've ever worked with.'' Info tech among the Vietnamese rice paddies? How could a New Economy company do business in a country with one of the most restrictive Internet environments in the world? In the age of globalization, it seems, anything is possible--even in Vietnam. Like other Asian governments, Hanoi is pinning its hopes on IT. To make this happen, it appears willing to rewrite the rules that govern its society. Success, however, will require a triumph of capitalist pragmatism over communist ideology. Hanoi has no time to lose. The government aims to reach $300 million in software exports by 2005, a tenfold increase from today. It plans to build four software parks offering high-speed access, so local firms can transmit the software tools programmers require. Officials say the parks will be free of the Internet restrictions enforced in the rest of the country. State universities are expected to churn out 1,500 new IT grads a year, a respectable number but not enough to reach Hanoi's export target. Among the people most likely to drive this fledgling industry are overseas Vietnamese who fled the country in rickety boats when the Vietnam War ended in 1975. Armed with technological and business savvy--and cash--they are returning home from the U.S., Canada, and Australia. Take Vietnamese-Canadian Nguyen Huu Le. His five-year-old Atlanta-based company, Paragon Solutions, writes Internet software for U.S. utilities, employs 200 workers in Ho Chi Minh City and Hanoi, and plans to double its staff by the end of next year. Vietnam also is benefiting from a shortage of programmers in India. Software giant Tata Consultancy Services has signed a software outsourcing agreement with Ho Chi Minh City-based Tuong Minh Agency, a private software development company. It has flown 20 Vietnamese programmers to Bangalore for training. U.S. companies also are eyeing Vietnam. Oracle Corp.'s (ORCL) Exchange is expected to sign a memorandum with the Vietnamese government to set up a B2B platform aimed at helping exporters sell their goods in the U.S. once the trade agreement is ratified next year. BRANCHING OUT. Vietnamese info-tech companies also are pushing into the U.S. One is the state-run Internet service provider Corporation for Financing & Promoting Technology (FPT). Its software arm set up a sales office in San Jose (Calif.) earlier this year and plans to open branches in Washington and Boston. It has landed a $1 million contract to write management software for a U.S. restaurant chain, and it does outsourcing work for British financial software company Winsoft. Overseas sales are expected to reach $6 million this year. Of course, Vietnam won't become another Bangalore overnight. Bui Hoang Tung, FPT's business development manager, says that poor perceptions of Vietnam make locally written software a hard sell abroad. ''Most foreigners aren't ready to work with us yet,'' he says. Indeed, many local programmers are so young they lack work experience, and Hanoi can be a fickle host. Still, Bangalore wasn't built in a day. By Frederik Balfour in Ho Chi Minh City _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Asia's Future (int'l edition) COVER IMAGE: Asia's Tech Future TABLE: The Tech Future Beyond the Lab (int'l edition) CHART: Startup Explosion The Chips Are Up (int'l edition) TABLE: Betting Big Chasing the Dream to Shanghai (int'l edition) Minds over Matter (int'l edition) CHART: Going, Going... A Biotech Hub (int'l edition) CHART: Genetic Express Rewriting the Rules (int'l edition) TABLE: Vietnam's IT Plan INTERACT E-Mail to Business Week Online

Copyright 2000-2009, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice