High target: A worker fixing a laptop at a computer shop in Hanoi. Vietnam sets the goal that the digital economy will account for 20% of GDP by 2025 and 30% by 2030. — AFP
HANOI: The data centre and cloud computing services market in Vietnam has large potential as the country is promoting digital economy development, according to the Vietnam Cloud Computing and Data Centre Club (VNCDC), a member of the Vietnam Internet Association (VIA).
Vietnam is considered one of the fastest growing markets in Asean in terms of cloud computing and data centre market, and has seen the participation of more than 50 providers, both domestic and foreign.
Cloud computing and data centres play an important role in shaping digital infrastructure in Vietnam together with broadband telecommunications infrastructure and Internet of Things infrastructure.
The Prime Minister has approved the National Digital Transformation Programme until 2025 with a vision to 2030 with three pillars: digital government, digital economy and digital society, in which the strategy of “moving to the cloud” is considered important to help enterprises develop in a digital economy.
This provides great opportunities for Vietnam’s data centre and cloud computing to accelerate and create a breakthrough, VNCDC said.
“Vietnamese cloud computing and data centre companies have mastered technology, have good growth rates and are capable of competing with foreign rivals in meeting enterprises’ demand to move to the cloud, making Vietnam an important digital centre of Asean,” VNCDC’s deputy head Dang Tung Son said.
A report by VNCDC published within the framework of Internet Day 2023 held by VIA last Wednesday here showed that the demand for cloud computing in Vietnam doubled in 2022 to reach 9.7 trillion dong.
This dramatic growth was driven by the Covid-19 pandemic which urged enterprises to speed up digital transformation.
However, the growth is slowing down in 2023 largely due to the impact of economic recession forcing firms to cut costs.
Still, the cloud computing market expanded at 24.2% this year.
The cloud computing market draws the participation of big domestic tech companies such as Viettel, VNPT, CMC and FPT which saw revenue increase from 900 billion dong in 2021 to 2.3 trillion dong in 2022 with an average growth rate of 37.4%.
However, domestic providers hold a modest market share of 20% while the rest is in the hands of foreign rivals.
The report predicted that the cloud computing market will grow at a compound rate of 20% to 23% in the 2023 to 2025 period to reach US$768mil in 2025.
Regarding data centres, a report by Research and Markets showed that the data centre market will grow at a compounded annual growth rate of 10.68% in the 2022 tpo 2028 period to increase from US$561mil in 2022 to US$1.bil in 2028.
This market is attracting huge investment from both foreign and domestic providers.
Domestic names include big tech companies like VNPT, Viettel, CMC and FPT which are focusing on developing modern data centres of international standard.
Still, domestic players accounted for a modest market share of 17%.
A government decree detailing the implementation of the law on cybersecurity has tightened data management, which would push up demand for data centre services.
Domestic data centre services providers said that the data centre market would develop rapidly in the next two years, thus, they all have plans for expanding the infrastructure system.
In the digital infrastructure strategy to 2025 with a vision to 2030, the Information and Communications Ministry set the target to expand the cloud computing market shares of domestic services providers to 70% by 2025, which is challenging, VNCDC said.At the same time, Vietnam set the goal that the digital economy would account for 20% of gross domestic product (GDP) by 2025 and 30% by 2030.
Accordingly, the information and communications technology industry must contribute 6% to 6.5%, in which cloud computing enterprises would contribute 1% of GDP.VNCDC’s survey revealed that more than half of service providers found existing legal frameworks were supporting their development at “normal” level.
“It’s necessary to improve the legal framework for data centres and cloud computing in Vietnam to be able to compete with foreign big tech companies and create breakthroughs,” VNCDC said. — Viet Nam News/ANN
