March 5, 2021

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Vietnam’s cloud computing potential

According to Viettel IDC, the Vietnamese cloud computing market is worth around US$133 million and is expected to grow to $500 million by 2025.

A recent survey shows that 56% of Vietnamese enterprises are already using cloud management platforms. Responses indicate that Vietnamese enterprises plan to increase expenditure on hybrid cloud services from the current 41% to 43% by 2023.

Such figures strongly suggest that the country’s nascent cloud computing market is growing rapidly. In fact, figures from the Ministry of Information and Communications show that the market has been growing at 30 % on average in recent years, while the growth rate reached 40% in 2020 – due to the COVID-19 pandemic.

A number of developments have contributed to this growth led by a surge in segments such as infrastructure as a service (IaaS) and software as a service (SaaS) and the growing number of small and medium-sized enterprises. Drivers like enterprise mobility and huge demand for data storage are also expected to drive the market.

According to Lê Hồng Minh, the general director of VNG, each Vietnamese now creates 1.7 gigabytes of data every single day. With this kind of volume, data can be a precious resource and exploitation of it would be key to the country’s socio-economic development. The challenges for the country and businesses revolve around how to derive actionable insights while retaining people’s confidence that personal data is being respected and protected.

2020 was nominated by the government as the year for starting the national digital transformation programme and has been pursued vigorously. This has had a significant positive impact on digital government, digital economy and digital society. The transformation is fairly comprehensive, rapidly accelerated by the pandemic. As in other countries, CVOID-19 measures necessitated deploying digital platforms for learning, health, remote working and video conferencing in addition to commerce and entertainment. Consequently, the need for cloud storage and cloud-based application soared.

The demand was so massive it was thoughts that domestic cloud service providers would find it difficult to compete with foreign companies ahead of the curve in terms of technology, infrastructure, experience and resources. Pre-2020 local companies contributed about 20% of the cloud service market share. With the establishment of the Vietnam Cloud Computing and Data Centre Club end 2019 and similar developments, there has been a burgeoning of homegrown cloud service providers. The country has 27 date centres with 270,000 servers operated by 11 domestic companies who provide services at fairly affordable prices.

The foundation of digital transformation is data and data connectivity, and so data management and sharing mechanisms and regulations are of great importance. To encourage the sector, the government has already invested in infrastructure and national policies. They have adopted strategies that boost businesses’ digital transformation and increase cloud capacity. None the less, it necessary to continue to improve the legal framework that would foster investment in digital infrastructure and services, support start-ups and encourage innovation and technology to increase preparedness to usher in a digital technology era.

OpenGov Asia has regularly been reporting on the nation’s digital ambitions and progress.

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