Oct 31, 2012

Vietnam - Incomplete legal framework hinders software leasing service development

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VietNamNet Bridge – Leasing software instead of buying software proves to be a good choice for many businesses. Therefore, experts have their reason to believe that the software leasing market would develop very strongly. However, how to collect fee from service users remains a headache to service providers.

High demand, profuse supply

Using leased software is clearly a wonderful method for enterprises to cut down their expenses. Instead of having to pay big money on the purchase, infrastructure setting and maintenance fee, enterprises can lease software products from solution providers and have to pay leasing fees at reasonable levels.

Some companies complained that they wasted hundreds of millions of dong on the software products which then became useless. Meanwhile, if they lease software products from solution providers, they can save a lot of money, enjoy maintenance services and have products updated without having to pay any kind of additional fee.

Especially, enterprises can change the service providers at any time and always ensure that they can use the most suitable and the best software products in their fields.

Having realized the great potentials of the service market, a lot of information technology (IT) firms have jumped into the market. Vietsoftware has been providing software leasing service since 2007, considered as the pioneer in providing Software as a Service- SaaS.

Meanwhile, CMC Soft is gearing up with its plan to build the infrastructure items to prepare to launch the new service. Intelligent University (IU) software product for schools, eDocman Plus and C-office for office works at small and medium enterprises, iLib for libraries and information centers could be the products to be put for lease.

MISA began providing software leasing fee in 2010, while it has got 1000 clients so far, who are using MISA SME.NET (software product for accountancy), MISA HRM.NET (labor force management), AMIS.VN (customer relation management…).

How to collect fees?

Analysts have predicted that using leased software is now a growing tendency, especially for state agencies, which have been asked to cut down the public expenditures.

It is estimated that using leased software would help a province to save 10 billion dong a year.

However, the service still cannot develop strongly, because there has been no regulation stipulating the payment by state agencies for the services like that. As a result, service providers have to either provide software free of charge, or to provide services first and then wait for money.

Therefore, some IT firms including CMC Soft, have been trying to target non-state clients, such as private businesses, organizations, small and medium enterprises, even though state agencies are believed to be the big clients.

Vietsoftware’s General Director Tran Luong Son, also complained that when providing services to state agencies, his firm has to accept unfavorable terms which has discouraged the company.

However, Son has affirmed that Vietsoftware would still try to develop the services, hoping that the situation may be improved one day. However, he said Vietsoftware, like other IT firms, would not be able to wait for indefinite time, calling competent agencies to set up a legal framework which allows state agencies to take initiative in choosing useful services for them and make payment for the services.

MISA’s General Director Nguyen Xuan Hoang has also called on the Ministry of Information and Communication to set up a reasonable mechanism for the service development and set up the policies to encourage enterprises to use SaaS.

Buu Dien


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