Vietnam Vertical Software Market Outlook to 2028

Vietnam Vertical Software Market Overview

• The global vertical software market was valued at USD 130 Bn in 2023 driven by rising cloud technology adoption, enhanced integration capabilities and global push for digital transformation.
• In recent years, the Vietnam vertical software market has shown robust growth, driven by industries such as healthcare, education, and manufacturing investing heavily in digital transformation. This sector-specific investment aims to enhance operational efficiency and ensure compliance with regulatory standards.
• Leading companies such as FPT Software, TMA Solutions, KMS Technology, Harvey Nash Vietnam, and NashTech dominate Vietnam's vertical software market with specialized solutions tailored to various industries, leveraging strong local presence and industry expertise.
• Viettel Group is expanding its software services to the ASEAN market, Viettel Group aims to increase revenue and market share, promoting the adoption of Vietnamese software solutions regionally.

Vietnam Vertical Software Current Market Analysis

• ERP software plays a pivotal role in integrating and managing core business processes across various industries, supporting seamless operations and resource management. FPT Software's dominance is rooted in extensive industry expertise, local market strength, and their ability to deliver comprehensive solutions tailored to diverse verticals.
• Cloud-based solutions are highly favored for their scalability, flexibility, and cost-effectiveness, meeting the growing demand for easily deployable and maintainable IT infrastructure.
• The integration of AI, machine learning, and cloud computing in vertical software solutions has grown, with over 60% of software incorporating these technologies in 2024, enhancing operational efficiencies and decision-making.

Vietnam Vertical Software Market Segmentation

The Vietnam Vertical Software Market can be segmented based on several factors:

By Deployment Type: the Vietnam vertical software market segmentation is divided into cloud based and on premise. In 2023, market is predominantly driven by cloud-based deployment, capturing a significant share. Cloud solutions are favored for their cost-effectiveness, scalability, and accessibility, making them ideal for small to medium-sized enterprises seeking advanced software solutions without high initial investments.

By Vertical: In 2023, the Vietnam vertical software market shows strong segmentation by industry verticals is divided into healthcare, education, manufacturing, retails and others. Healthcare leads with solutions enhancing patient care and operational efficiency. Education adopts e-learning and administrative platforms for remote learning.

By Application: Vietnam vertical software market segmentation by application is divided into ERP, CRM, SCM, HRM and others. ERP solutions lead by integrating business processes for enhanced efficiency, followed by CRM applications for managing customer relationships and improving sales.

Vietnam Vertical Software Market Competitive Landscape

• Investment in AI Research (2022): KMS Technology's USD 10 million investment in AI R&D aims to enhance software offerings for various verticals, fostering the development of advanced AI-driven solutions.
• FPT Software and SAP Partnership (2023): This partnership delivers customized ERP solutions for the manufacturing sector, improving operational efficiencies and streamlining processes for leading manufacturing firms.

• Launch of AI-Driven Financial Platform (2023): FPT Software's AI-driven platform enhances automation and operational efficiency in the financial sector, with several major banks in Vietnam adopting it by the end of 2024 for its predictive analytics and risk management features.

Vietnam Vertical Software Industry Analysis

Vietnam Vertical Software Market Growth Drivers:

• Digital Transformation Initiatives: Vietnam's "National Digital Transformation Program 2025" has significantly boosted the adoption of digital technologies across various sectors, with over 70% of businesses integrating digital solutions as of June 2024, driving demand for industry-specific software.

• Increasing IT Investments: IT spending in Vietnam reached USD 15 Bn in 2024, a substantial increase from USD 12 Bn in 2023, with investments focusing on cloud computing and AI, thus rising the need for advanced software applications.
• Supportive Regulatory Environment: Policies like the "Law on Technology Transfer" and the "Cybersecurity Law" have created a favorable environment for the software industry, leading to increase in foreign direct investment in the technology sector in 2024.

Vietnam Vertical Software Market Challenges:

• Data Privacy and Security Concerns: With the increasing use of digital platforms, data privacy and security have become significant challenges. The National Cyber Security Center reported a 30% increase in cyberattacks in as of June 2024, targeting both public and private sector organizations. This rise in cyber threats has raised concerns about the security of sensitive information, necessitating substantial investments in cybersecurity measures.

• High Implementation Costs: The initial cost of implementing advanced vertical software solutions can be prohibitive, especially for small and medium-sized enterprises (SMEs). According to the Vietnam Association of Small and Medium Enterprises, SMEs cited high implementation costs as a barrier to adopting new software technologies in 2024. These costs include not only the purchase of software but also expenses related to customization, integration, training, and ongoing maintenance.

Vietnam Vertical Software Market Government Initiatives:

• National Digital Transformation Program (2020): The program aims to accelerate digital transformation by 2025, this program has led to significant digital adoption, with over 50% of businesses participating by end of 2024, boosting demand for vertical software.
• Vietnam Law of Technology Transfer: Facilitating innovation and technology adoption, this law resulted in increase in technology transfer agreements in 2017, enhancing the development of advanced vertical software solutions.
• Cybersecurity Law (2018): Mandating stringent cybersecurity measures, compliance with this law increased in 2022, building trust in digital technologies and supporting the adoption of industry-specific software solutions.

Vietnam Vertical Software Future Market Outlook

The Vietnam Vertical Software Market is expected to show a significant growth driven by increased adoption of cloud computing, artificial intelligence (AI), and Internet of Things (IoT) technologies within vertical-specific applications, driving demand for advanced software solutions.

Future Market Trends

• Adoption of Cloud-Based Solutions: Cloud-based software is expected to account for major market share of the vertical software market in Vietnam by 2025, driven by benefits such as lower upfront costs, scalability, and ease of access.
• IoT Integration: The number of IoT devices in Vietnam is projected to reach 10 Mn by 2025, driving the adoption of IoT-enabled software in industries like manufacturing for real-time monitoring and predictive maintenance.
• Focus on Customization and Personalization: By 2025, it is anticipated that 70% of software vendors will report increased demand for customized solutions, particularly in sectors like retail and finance, to better align with business processes and enhance customer experiences.