Outsourcing Software Development In Vietnam: Pros And Cons Of Large vs. Small Companies
- Kien Nguyen
- Apr 10
- 6 min read
Outsourcing software development is a key decision for businesses, but choosing between a large or small company can be challenging. Large firms offer scalability and resources, while smaller teams provide flexibility and personalized service. The right choice depends on your needs, budget, and project scope. Understanding the pros and cons of each ensures you find the best outsourcing partner for success.
1. Why Choose Vietnam for Outsourcing Software Development?
Vietnam's ICT industry is rapidly growing, especially in software exports. Over 15 years, it has become a key outsourcing hub, ranking as Japan's second-largest software partner since 2014. In the 2021 Global Services Location Index, Vietnam ranked sixth in financial attractiveness, talent availability, business environment, and digital resonance, solidifying its position as a top outsourcing destination. The following number demonstrates why Vietnam is one of the best countries to outsource software:
The entire ICT export is estimated to be $91.5 billion, resulting in a software export turnover of $3.5 billion. This number is expected to increase by at least 5 percent in 2021.
Software and IT services accounted for $11.0B in revenue (according to a report by the Vietnam Software and IT Services Association).
1.1 The Rise of Vietnam's Outsourcing Software Development Industry
Vietnam's ICT industry is rapidly growing, especially in software exports. Over 15 years, it has become a global outsourcing hub and Japan's second-largest software partner since 2014. In the 2021 Global Services Location Index, Vietnam ranked sixth in financial attractiveness, talent availability, business environment, and digital resonance, reinforcing its status as a top software outsourcing destination.
1.2 Impressive Growth and Government Support
In 2019, Vietnam's ICT industry earned $112.35B, with exports making up 81.5%. The 2020 "Make in Vietnam" policy spurred a 28% growth in digital enterprises, reaching 60,000. These firms focus on 12 key sectors, including e-commerce, fintech, AI, and blockchain, aligning with global IT outsourcing demands.
1.3 Skilled Workforce and Language Proficiency
Despite a talent shortage, Vietnam's IT workforce shows strong growth potential. Offshore development centers offer stability for long-term projects. IT graduates must meet CEFR B1 for college entry and B2 for advanced programs, ensuring strong English skills. Notably, 90% of IT workers speak English, with 67% at intermediate or advanced levels, making Vietnam a prime outsourcing software development destination.
1.4 Cost-Effective Solutions
Vietnam offers a 40% cost reduction in IT outsourcing compared to Eastern Europe and North Africa. It also ranks first in Southeast Asia for affordable internet, with broadband costing just $12.4 monthly—far lower than in neighboring countries. Office lease rates are 20% lower than in other Asia-Pacific nations, making Vietnam a cost-effective choice for offshore development.
1.5 Intellectual Property Protection and Cybersecurity
Vietnam's Decision No. 2205/QD-TTg (2020) promotes intellectual property to boost innovation and competitiveness. The Cybersecurity Law mandates data localization and government oversight, ensuring legal protection for international clients. These regulations reinforce Vietnam’s position as a strong outsourcing software development hub.
2. Top-rated Software Outsourcing Companies in Vietnam
Vietnam has emerged as a top destination for software outsourcing, with numerous companies offering high-quality, cost-effective IT solutions. Here are the leading software outsourcing companies in Vietnam:
ElevenX
Headquarters: Ho Chi Minh City, Vietnam
ElevenX is a Vietnam-based IT outsourcing software development company specializing in building high-performing dedicated offshore development teams. The company provides skilled IT engineers, UI/UX designers, and project managers to help businesses scale their software development capabilities efficiently. With expertise spanning fintech, e-commerce, healthcare, and enterprise solutions, ElevenX delivers tailored services that meet diverse industry needs.
Focused on seamless collaboration, ElevenX integrates its offshore teams into clients’ workflows while maintaining high standards in development, security, and communication. By emphasizing flexibility and cost-effectiveness, the company has established itself as a trusted partner for global businesses looking to optimize their IT operations.
MOR Software
Headquarters: Ho Chi Minh City, Vietnam
Established in 2016, MOR Software specializes in web and mobile application development, Salesforce consulting and development, automotive and embedded systems, as well as AI and blockchain development. Their team is proficient in various programming languages and modern technologies,...
With its expertise, proven track record, and commitment to excellence, MOR Software continues to lead Vietnam’s software outsourcing industry, delivering scalable and innovative solutions worldwide.
CMC Global
Headquarters: Hanoi, Vietnam
CMC Global, a key subsidiary of CMC Corporation, is a top outsourcing service provider in Vietnam. Founded in 2017, the company offers IT outsourcing, digital transformation, and technology solutions. With over 2,200 employees and six global branches, CMC Global delivers reliable services backed by industry-leading certifications
Known for its expertise in cloud computing and ERP implementation, CMC Global consistently earns praise for managing large-scale projects. One client highlighted the company's ability to streamline IT operations while maintaining consistent performance.
KMS Technology
Headquarters: Ho Chi Minh City, Vietnam
KMS Technology stands out as one of the largest and most influential software outsourcing firms in Vietnam, with a focus on custom software development, testing, and IT consulting. The company excels in areas like cloud-based solutions, DevOps, and digital transformation,...
KMS Technology’s commitment to using modern tools like AWS and Azure is frequently highlighted in client reviews. Many clients commend the company for its agile methodologies, fast delivery, and its ability to scale teams to meet project demands. KMS’s technical expertise and its customer-first approach make it a reliable partner for businesses seeking high-quality, cost-effective solutions.
Axon Active
Headquarters: Ho Chi Minh City, Vietnam
Founded in 2008, Axon Active is a Swiss-owned software project outsourcing agent in Vietnam. The offshore team of 600+ engineers has the ideal blend of talent management, Agile and Scrum methodologies, technological expertise, and domain understanding. They form lasting relationships with their customers by forming specialized development groups that provide cutting-edge services at affordable rates.
3. Large vs. Small Outsourcing Software Development Companies: Which One is Right for You?
When outsourcing, choosing between large and small outsourcing companies is a key decision. Each option offers distinct advantages and drawbacks, impacting factors such as cost, expertise, flexibility, and communication. Understanding the pros and cons of both will help you select the best fit for your project.
3.1 Technical Expertise and Specialization
Large outsourcing firms have extensive experience handling complex, large-scale projects across various industries. Their developers are skilled in multiple programming languages, frameworks, and cutting-edge technologies, making them a reliable choice for businesses requiring a diverse tech stack. Additionally, large firms follow strict security protocols and compliance standards, which is essential for enterprise-level projects.
On the other hand, small outsourcing companies often focus on niche technologies and specialized solutions. Their teams are highly skilled in specific areas, allowing them to provide innovative and customized software solutions. If your project requires deep technical expertise in a particular domain, a small company might offer greater adaptability and creative problem-solving.
3.2 Project Management and Flexibility
Larger companies follow well-defined project management methodologies such as Agile, Scrum, or SAFe, ensuring structured workflows, predictable deadlines, and scalable development processes. However, their size can sometimes lead to bureaucratic delays and less flexibility in adapting to sudden changes.
Smaller firms, in contrast, offer greater agility in development. Their streamlined processes allow for faster decision-making, quick iterations, and a more personalized approach. If your project requires frequent adjustments or a dynamic development process, a smaller outsourcing company may be more responsive to your needs.
3.3 Communication and Collaboration
Effective communication is critical in outsourcing software. Large companies usually provide dedicated project managers, standardized communication tools, and 24/7 support, ensuring smooth collaboration, especially for global clients. However, working with a larger company may limit direct access to developers, making real-time problem-solving more challenging.
Smaller outsourcing firms typically offer a more direct and personal communication approach. Clients often interact directly with developers and decision-makers, leading to faster issue resolution and a closer working relationship. If you value close collaboration and hands-on involvement, a small company may be a better fit.
3.4 Cost and Return on Investment
Cost is a major factor in outsourcing. Large firms generally charge higher rates due to their extensive infrastructure, certifications, and operational costs. However, they provide stability, scalability, and long-term reliability, making them a good choice for enterprise-level businesses that require high security and compliance.
Smaller outsourcing firms offer more cost-effective solutions, making them attractive for startups and mid-sized companies. With lower overhead costs, they can provide affordable yet high-quality development services. However, businesses must assess the trade-off between affordability and long-term scalability. If your priority is cost-efficiency with quality, a smaller firm might provide better value.
Conclusion
The choice between large vs. small outsourcing companies depends on your business priorities. Large firms are ideal for enterprise-level projects requiring reliability, compliance, and extensive expertise. Meanwhile, small firms offer flexibility, direct communication, and cost-effective solutions, making them well-suited for startups and businesses with specialized needs. Carefully evaluating these factors will help you choose the best partner for your outsourcing software development project.
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