As one of the leading offshore software outsourcing destinations in the recent decades, Vietnam is a top choice for many foreign enterprises that currently seeking tech talents in South-East Asia. Business organizations choosing to outsource their software development projects to Vietnam can enjoy many benefits such as having access to a large pool of skilled IT talents as well as competitive pricing along with a well-established IT infrastructure.
According to a report by globaldata.com, the Vietnam ICT market was evaluated at US$ 13.73 billion in 2022 and expected to keep growing at a compounded annual growth rate (CAGR) of 17.50% to reach a value of US$ 30.74 billion by 2027. This shows a strong potential of growing demand for Vietnamese tech talents and their expertise. In this article, let’s examine why Vietnam is such a popular choice for software outsourcing services in Asia.
What is software outsourcing?
When a business contracts with a third-party supplier to create software on its behalf, this process is known as software outsourcing. Depending on the service provider’s location, onshore or offshore development, they may use the software. The business can outsource the software development and the entire design, development, testing, and maintenance phases.
3 Typical models of outsourcing software development services
There are 3 standard models of outsourcing software development services you can choose:
On-shore
On-shoring is a form of hiring a third-party company within the country. Software outsourcing companies can be from different states but in the same region. There are no restrictions in language, making communication is easier and more effective, but the clients may have to pay for higher costs than nearshoring and offshoring outsourcing.
Offshore Software Outsourcing
Offshoring services differ from onshoring; clients can hire reliable software outsourcing services from distant countries. For example, a US company will hire a software outsourcing service from another county, such as Vietnam, or India. This is a better cost-effective option than onshoring remote project administration.
Nearshore Software Outsourcing
Near-shoring services refer to a nearby foreign country with a similar time zone or a nearshore location. For example, a US company can collaborate with nearshore services from Mexico or Puerto Rico.
Benefits of software development outsourcing
There are several advantages you should follow of software outsourcing:
Cost – Minimizing
Outsourcing software development can be significantly cheaper than developing in-house, especially regarding labor costs. Developing software in-house requires hiring skilled developers, investing in infrastructure and technology, and paying salaries and benefits. Outsourcing can help businesses avoid these costs and pay only for their needed services.
Access to Expertise
Outsourcing software development allows companies to access specialized expertise that may not be available in-house. Service providers have teams of skilled developers, designers, testers, and project managers who can work on projects of any size and complexity.
Focus on Core Competencies
The businesses can focus on their core competencies and strategic goals without taking on too many non-core functions, such as software development. Much care Software outsourcing services can also free up resources and time to invest in business areas.
Speed Up Time-to-market
The service providers will understand how to run and deliver projects on time. They know how to make it faster and can help businesses accelerate their time-to-market. Outsourcing software development can help companies to launch products faster by leveraging the service provider’s expertise and resources.
Challenges of Software Outsourcing
While there are several benefits to outsourcing software, there are also some challenges that businesses may face.
Communication Barriers
Outsourcing software development can be challenging due to communication barriers, especially when working with offshore providers. Language barriers, time zone differences, and cultural differences can make communication difficult and lead to misunderstandings.
Quality Control
Maintaining quality standards can be challenging when outsourcing software development. Businesses must ensure that the service provider meets their quality standards and that the delivered software meets the requirements and specifications.
Intellectual Property Protection
Sometimes, the outsourcing software agency might need help protecting intellectual property. Businesses must ensure service providers follow security and confidentiality guidelines and not steal or divulge private data.
Contract Management
It can be challenging for businesses to manage outsourcing contracts with offshore services. The clients must ensure the contract covers all project-related details, including the work scope, deadlines, deliverables, and payment terms. They must also keep an eye on the project’s development and ensure the service provider complies with the conditions of the contract.
Vietnam’s IT Market Highlights
The Vietnam’s ICT market is growing and expanding by a variety of factors. Enterprises in many industries haven been embarking on their digital transformation initiatives, leveraging advanced technologies like cloud computing and artificial intelligence to optimize business processes gaining a competitive, ultimately driving the sector growth. Vietnam government’s policy including tax incentives for the software development services, with preferential tax rates and tax exemptions, is also an advantage that contributes to the growing of the software development outsourcing market. Furthermore, Vietnam’s young and dynamic skilled workforce creates a substantial market for the software development services, positioning the country as a major tech hub in Asia. Based on the data by A.T Kearney, in 2023, the nation ranked 7th in the Global Services Location Index (GSLI) as a leading outsourcing destination, strengthening the country’s attractiveness for offshoring services.
Vietnam’s Software Outsourcing
Vietnam software development market overview
Vietnam’s readily available and skilled software talent pool is one of the reasons that make foreign companies choose to build or expand their development center in the country. Take a quick look at Clutch.co, you’ll find that there are over 300 software development companies in Vietnam, ranging from large to mid-size contributing significantly to Vietnam offshore software development industry. Additionally, LinkedIn data shows Vietnam boasts more than 82,000 software developers mostly working in foreign invested companies. Each year, many students graduate from university majoring in computer software, contributing to this talent pool’s growing inflow. This further highlights the strong potential of Vietnam’s developer talent pool.
Tech Talent in Vietnam
Based on findings from the Coursera Global Skills Report 2024, for the regional skills ranking, Vietnam’s software developers rank 3rd in the South-East Asia region for technology behind Singapore and Indonesia. Their technical strengths include advanced technologies, computer programming, and data science. Also, according to the Vietnam 2023 IT market report by topdev.vn technologies such as NodeJS, Java, MySQL, Spring Boot, Laravel, .NET Core, Django are among the most popular tech stacks by Vietnam software developers. Vietnam’s highly skilled software engineering workforce is valuable for companies seeking top talent in Data Science and technology.
Cost Advantage
In comparison to many developed nations, the cost of living in Vietnam is significantly lower. Specifically, the cost of living in Vietnam including rent is 65.5% lower than in the United States. (Data by Numbeo.com) In returns, the average income earned by a typical software developer in Vietnam is also lower compared to the western countries. Overall, this translates to much cheaper software development costs, office rents, utilities and other expenses.
Quality
While Vietnam has established itself as a worthwhile destination for offshore software development outsourcing thanks to its competitive labor costs, many companies may question whether these lower costs compromise the quality of services provided. Lower software development costs do not equate to the lower quality of the work delivered.
The lower pay is simply due to cheaper living costs. In general, software engineers’ salary in Vietnam is 50% cheaper than in the US, UK, and other EU nations.
However, the final cost of hiring a software developer in Vietnam may vary depend on many other factors including years of experience, engineer’s tech stack expertise, and other terms such as location, and duration of contract.
Vietnam Software Development For Specific Industry Needs
These companies include large software outsourcing enterprises that have been in outsourcing businesses for decades as well as newly established startups.
Whether it’s custom software development or building a dedicated team for your company’s development project, Vietnam offers many software companies that can take on projects ranging from small-medium size to enterprise ones.
Those software development firms serve many industries including BFSI, logistics and transportation, retail, telecommunication, education, etc.
Hiring a Software Development Team in Vietnam: How To Get Started
In 2025, many enterprises have had their IT operations done by offshore outsourcing third-party vendors, especially in 2024. According to Statista, the trend is expected to continue throughout the period of 2024 to 2029, with an annual growth rate (CAGR 2024-2029) of 8.48%. Vietnam is becoming one of the top destinations for companies looking to extend their software development teams or establish an offshore development center. In today’s blog, let’s delve into the factors why Vietnam is a popular choice for offshore software development and how you can hire software developers from Vietnam the right way.
Hiring software developers from Vietnam in 2-4 weeks
When selecting the most efficient and cost-effective ways of hiring offshore developers, businesses should consider key aspects of the process, including:
- Project budget;
- Desired projects start date and timeline;
- Availability of recruiters, HR specialists, and legal experts to ensure quality and compliance during recruitment, hiring, and contracting;
- The required tech stack at each stage of the project;
- The hiring approach will be defined by the above and other business-specific factors. Let’s review the most common strategies.
Do-It-Yourself Developer Hiring
If you’re in the IT industry, especially if you’re tech a savvy decision maker (e.g. a tech start-up founder), it makes sense to conduct hiring software developers in Vietnam by yourself. Tech company’s CTOs or founders usually know very well about the technologies that their organizations need when hiring a candidate.
There are quite some benefits of directly hiring software developers yourself:
The Pros and Cons of Hiring Developers Directly.
What are the Pros?
Firstly, hiring developers directly allows you to personally interact and learn about the candidates. You would usually have full control over the hiring process from candidates sourcing, interviewing, and on-boarding. This gives you the advantage of matching the hiring criteria with candidates throughout the process. However, spending a lot of time hiring the candidates yourself has drawbacks too.
Disadvantages of hiring developers yourself
The process can be quite resource-intensive and time-consuming compared to letting others do that for you, from sourcing to interviews arrangement and selection. It can even take longer if you need to find software developers with specialized skills or ones who are well-versed in advanced technologies like AI/ML and IoT, etc. Also, to ensure that you can hire the most suitable candidates, you may need to conduct technical or coding skills testing which costs extra time and money.
Moreover, legal Paperworks are also factors that you need to consider when hiring offshore developers. If you do not have an in-house HR team that is experienced with offshore hiring, you may potentially hire the wrong candidates leading to wasteful of resources in training and re-hiring. While hiring directly lets you have full authority over the process, it may not be a suitable option considering all the drawbacks. Many companies opt for other more efficient options like partnering with a software development outsourcing company or employing the services provided by a recruitment agency.
Partner with software development outsourcing companies
One of the most commonly available and efficient methods of hiring software developers in Vietnam is to partner with software development outsourcing company. You can flexibly opt for the engagement models (e.g. IT staff augmentation, dedicated team, etc.) that best fit your development needs. With a quick access to a large pool of IT talents, software development company in Vietnam can help you complete the hiring in just 2-4 weeks. Let’s explore in detail:
The Pros and Cons of Hiring Software Developers from External Development Agencies
At Trustify Technology, we continuously expand our development team and candidates pool, along with a collaboration and interview process so that clients can have access to the top IT talents in the market. Once we can clearly identify your development goals and technical resources needs, we’re ready to offer you candidates with relevant experience and skills to work on your project.
Pre-qualified talent pool.
We already pre-select by interviewing and choosing the best software developers in Vietnam, to help save you time and resources. Trustify Technology standardized our recruitment processes and carefully select every candidate. So, when you request a dedicated development team, you will select from a pre-vetted pool of the most qualified engineers in the market. Depend on your specific needs, you can hire software developers according to their specialized tech skills and seniority such as junior, middle, or senior as well as their English levels.
A Streamlined Paperwork Process
Another advantage of partnering with a software development company is that all matter related to employees’ paperworks such as tax, benefits, insurance, etc. are taken care of for you. This is to reduce complications and ensure a smooth hiring process.
Advanced Technologies
When it comes to hiring software engineers who are well-versed in cutting-edge technologies, the total hiring time can take longer than usual. Software development companies can quickly provide you with these candidates as they usually have access to an extensive database of those candidates.
Flexibility
Our software developers can join you and your team at any stage of your project. Our team of experienced developers can cover all your technology needs. This can help you speed up the project and enable quick and cost-effective team extension. Hiring offshore developers by partnering with a software development company usually costs more than conducting the hiring yourself. However, by collaborating with a software development partner, you can have quick access to a large pool of IT professionals, hiring hassle-free, and accelerate your development project for faster release, ultimately gaining a competitive advantage.
What You Should Know When Hiring an Offshore Software Outsourcing Team in Vietnam
Business organizations usually choose to outsource their development projects to reduce costs and speed up the product time-to-market, as well as extend their presence in the global market. When choosing to hire offshore software developers in Vietnam, there are quite a few factors that you need to consider for a smooth hiring process and choosing the right candidates
Project Complexity and Team Composition
Vietnam has a talent pool of hundred thousand of IT professionals, which makes it among the top choices for companies to hire and extend their software teams, with relevant tech expertise and skill levels for their projects. To ensure project success, it’s essential to clearly define your project’s needs and complexity for making up the right team composition. Thus, before starting the hiring process, it’s always better to discuss with your software development partner the specific technical skills your project requires and for how long to effectively manage and stay within the budget.
How Much Does It Cost to Hire Software Developers from Vietnam?
Outsourcing by hiring software talents in Vietnam through a software development agency provide many benefits including a simplified hiring process, and high availability of software engineers with specific skill sets at different price points to choose from. The average costs of hiring offshore software developers in Vietnam may vary based on several factors such as the required technologies for your projects and the developers’ experience as well as average hiring/project time.
According to clutch.co, most software firms in Vietnam charge $20-50$ per hour on average. The Vietnam software outsourcing market is an attractive option due to its lower living costs and lower median software engineer salary compared to many other nations. Vietnam’s infrastructure is well-equipped to support frequent business trips and team fly-outs, offering a highly developed tech landscape that ensures a comfortable and efficient experience for your business travels and visits.
How to effectively manage an outsourced software development project successfully?
Managing an outsourced project requires careful planning and execution more than in-house. Here are some suggestions to help you succeed:
Clearly define the Scope of Work
Start by clearly defining the scope of work, requirements, and specifications. Make sure your service provider fully understands the project goals, objectives, and expectations. This alignment from the beginning sets the foundation for success.
Establish Communication Channels
Set up clear and effective communication channels with your outsourced team in Vietnam. Whether it’s through video conferencing, chat apps, emails, or phone calls, maintain regular communication to ensure everyone stays aligned throughout the project.
Set Realistic Deadlines
It’s important to establish reasonable project milestones and deadlines. Make sure your service provider agrees to and understands these timelines so they can plan accordingly and deliver on schedule.
Monitor Progress
Keep a close eye on the project’s progress. Use project management tools like Trello, Asana, or Jira to stay informed and involved. Regular updates help you spot potential issues early and keep things on track.
Establish Quality Control Measures
Put quality control processes in place to make sure the delivered software meets your standards. Run regular tests and work closely with your provider to ensure that quality expectations are consistently met.
Maintain Intellectual Property Rights
Make sure your intellectual property is protected. Set clear terms around data security and confidentiality, and use legal agreements like NDAs to prevent unauthorized use or sharing of sensitive information.
Conclusion
Vietnam has become a strong candidate for companies looking to outsource their software development projects, boasting a skilled and young tech workforce. Trustify Technology, a Vietnam leading software development partner with a global presence, can help you tap into the potential of Vietnam offshore software development outsourcing.
We have a presence in over 4 countries across the Americas, the UK, and Asia, giving you access to a vast talent pool of over 110+ experts.
Trustify Technology has a proven track record in software development expertise in a variety of business industries. We provide end-to-end services including cutting-edge technology consulting, development, and full-scale software development outsourcing and IT staff augmentation.
Our software engineers at Trustify Technology can join your existing team and work on your projects at any stage, we can help quickly ramp up the development capacity or scale down throughout the entire software development lifecycle. Contact us, and let’s discuss how we can help with your software outsourcing goals today.