Boston, MA -- (SBWIRE) -- 11/27/2013 -- Vietnam's IT market is forecast grow strongly for the duration of our forecast period to 2017. We forecast IT spending will increase by 17.6% in 2013 to reach a total value of VND62,082bn (US $2.97bn), and grow at a CAGR of 14.1% to 2017. Significant opportunities remain in the market due to relatively low penetration of devices and services, which vendors will be able to tap as incomes rise. The government is also a significant factor underpinning our bright outlook as it pursues a range of ICT initiatives and allocates funding to develop Vietnam's domestic IT industry. A key policy is the promotion of Vietnam as an outsourcing destination, with the services segment expected to expand rapidly over the medium term as enterprises, particularly in Japan, switch business away from China in search of cost savings. ERP and security solutions will experience fast growth in the enterprise market, as well as medium-term opportunities in cloud computing services as telecoms infrastructure improves.

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Headline Expenditure Projections

- Computer Hardware Sales: VND44,389bn in 2013 to VND68,935bn in 2017, CAGR of +12.5% in local currency terms. PC sales growth picked up again from mid-2013 after a dip earlier in the year as retailers cut prices and partnered with banks to provide credit.
- Software Sales: VND5,610bn in 2013 to VND10,378nn in 2017, CAGR of +17.5% in local currency terms. Piracy continues to be a drag on the market, but with large opportunities in business software and security solutions we expect growth will remain robust in the medium term.
- IT Services Sales: VND12,083bn in 2013 to VND22,812bn in 2017, CAGR of +18.2% in local currency terms. Services expected to be the outperforming segment of the IT market as demand grows in several verticals, including banking, telecoms, energy and government. Additionally, there is a potential boom in outsourcing from Japanese enterprises to drive outperformance of services segment.

Risk/Reward Ratings

Vietnam scores 41.1 out of 100 in our Asia Risk/Reward Ratings table. This places the country 11th, ahead of Sri Lanka and behind Philippines and Thailand.

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