5/16/02: Visions Of A New Vietnam-Software Secret - Nightly Business Report transcript by Darren Gersh

SUSIE GHARIB: If you were asked to name industries that have a lot of international competition, you'd probably think of steel, cars and textiles, not computer software. But that's changing and changing in some surprising places. Tonight we continue our series Visions Of A New Vietnam, as Darren Gersh looks at that country's software secret.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Cutting edge 3D animation. Laptop. Programmer. Must be Silicon Valley, right? Try Vietnam. Yes, Vietnam.

PHIL TRAN, GENERAL DIRECTOR, GLASS EGG: The character here actually exists in a virtual space.

GERSH: Phil Tran was born in Saigon, but in 1975 his family left for the United States. Twenty years later, he came back as an intern for a law firm. A multimedia client was looking for programming help and Tran discovered Vietnam's high tech potential.

TRAN: And when I met some of the people that I eventually hired later, I knew that the raw talent, the potential was here, but it needs to be harnessed.

GERSH: So Tran founded Glass Egg. The firm now makes games for clients in Europe, Hong Kong and the U.S. Basically, somebody looking at this would say, boy, these guys can do what they can do in the States, right?

TRAN: Yes.

GERSH: That was the point?

TAN: Yes, that was the point.

GERSH: At first, clients are surprised to hear there is a software industry in Vietnam. But Vietnamese companies like Glass Egg are now making a name for themselves. The talent here is good and there's a lot of it.

TRAN: The best and brightest in Vietnam go not into business or law, they go into science. And of the sciences, computer science is very popular now.

GERSH: Many Vietnamese first learn about computers at Internet cafes like this one. They start out chatting and playing games, and soon they're on to programming or designing a Web site. Multiply a cafe like this by a few hundred and you begin to see how hungry people here are to learn about new technologies. The government is eagerly promoting the software industry with tax incentives and new software parks. But Internet access is expensive and it's tightly controlled by a government firewall that screens out sites considered to promote social evils. Most software firms here are small. Tran Luong Son founded VietSoftware after studying at MIT's Sloan School. Son hopes to find a foreign partner to help sell his new program for building Web sites. IBM is now giving the company a trial run, but marketing remains a challenge.

TRAN LUONG SON, MANAGING DIRECTOR, VIETSOFTWARE: We want to penetrate the international the market. We want to be integrated into the international software industry.

GERSH: Truong Gia Binh is CEO of state owned FPT, Vietnam's largest software development company. He's also President of the newly formed Vietnam Software Association. The group wants to transform Vietnam into a software valley. But to do that, Vietnamese programmers will need to develop a better understanding of global business practices.

TRUONG GIA BINH, CEO, FPT: I think it's education, education, education is very important to develop a domestic market.

GERSH: A handful of firms like FPT and others here are already doing high end product work for companies like NorTel (NT), NTT (DCM) and Cisco (CSCO). And industry analyst Marc Lopatin says they are doing it for half the price of firms in China or India.

MARC LOPATIN, RESEARCH VIETNAM: There is high end product development going on in Vietnam, so pockets of excellence in a young, emerging market. The reason why not many of us know about this is because the customers keep quiet. It's a competitive advantage and they are enjoying massive savings by using these very skilled resources in Vietnam.

GERSH: That's because a top software engineer here makes $1,000 a month, a huge amount of money for Vietnam. For now, top programmers in the U.S. don't need to worry about the competition here, but others do.

TRAN: If you are a midrange programmer, you are going to face a lot of competition internationally.

GERSH: When it comes to software, Tran says innovation can happen anywhere in the world, even Vietnam. Darren Gersh, NIGHTLY BUSINESS REPORT, Ho Chi Minh City.