Clear incentives and better legal regulations would help Vietnam attract more foreign information technology firms.
Joseph Rhoden, director of US-based Redhat's Global OEM Alliances, said his firm, one the leading providers of high-performance cloud software, virtualisation, storage and middleware technologies, had no business plans in Vietnam and instead Redhat was selling its products via IBM Vietnam.
"We need clear legal regulations on information technology (IT) development in markets like Vietnam before we can directly sell and produce our products there. We don't want to take risks. Currently, we have offices in Singapore, India, China, Japan, South Korea, Australia and New Zealand," Rhoden told VIR at Pulse 2014 – one of the world's biggest premier cloud computing events hosted by IBM in late February in Las Vegas.
The event featured the participation of hundreds of leading IT companies, including IBM, Envision Enterprise Solutions, GenesisSolutions and Cohesive Information Solutions. Company reps told VIR that Vietnam could attract more foreign IT developers if it offered clear investment incentives and transparent legal regulations on IT development.
The Vietnamese government last November enacted Decree 154/2013/ND-CP on incentives for enterprises operating in concentrated IT parks. However, no guidance on how to implement the decree has yet been issued, making it difficult for local authorities to provide tax breaks.
Rajiv Daljeet, senior account executive of US' GenesisSolutions, which offers enterprise asset management assessment solutions, said his company might ‘work in Vietnam' depending on how the country's legal framework developed.
"We need to understand what Vietnam needs to develop a sturdy IT industry. But what we need the most from a market like Vietnam is a free market without any subsidy from the state. A free market will enable equal competition," he said.
Echoing this view, Matt Logsdon, executive vice president - sales and marketing of software producer US' Cohesive Information Solutions, said the company had an office in Singapore which collected market information in other Southeast Asian markets.
"We're exploring opportunities to invest in Vietnam as our products are yet to be sold there. However, we'd want the same preferences we enjoy in Singapore," Logsdon said.
Ramana R, general manager sales of India's Envision Enterprise Solutions Pvt Ltd offering asset accounting solutions, also said although Vietnam had great potential, "First and foremost we must conduct market surveys. There are big differences in culture, consumption and legal regulations on IT development between our country and Vietnam. Foreign investors would most importantly need transparency and good intellectual property right protection when they do business in any market."
It seemed that IBM remained the most committed to investing in Vietnam.
"For 2014 and beyond, we have set a target of introducing additional new technologies to help local clients. Vietnam is one of the first countries that IBM has chosen for government, telco and banking solutions. We're helping increase competitiveness and compliance with international industry standards," said IBM Vietnam's general director Tan Jee Toon.
IBM Vietnam has been working with Vietnam's government and partners to support organisations, and banking, transportation and food industries as part of the IT giant's ‘smarter planet' projects to help businesses reduce investment and operational costs while protecting the environment.
By Nguyen Thanh(VIR)
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