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How FPT Software is expanding its footprint in APAC
Vietnamese IT giant is experiencing rapid growth in the region, driven by its diverse workforce, focus on key technologies and ability to navigate a highly competitive IT services market
Vietnamese IT services provider FPT Software is seeing significant growth in its business across the Asia-Pacific region, driven by its diverse workforce, and focus on modernising legacy systems and building artificial intelligence (AI) capabilities.
Speaking to Computer Weekly in a recent interview, Do Van Khac, senior executive vice-president for Asia and Australasia, and CEO of FPT Japan, said that from over 1,000 employees in 2002, FPT Software has rapidly expanded to a global engineering workforce of 35,000, including 6,000 based outside Vietnam.
In markets such as Singapore and South Korea, FPT Software has been doubling its business every two years, while its Japanese business has achieved an average growth rate of 39% over the past three years. Last December, it announced that its global revenue had surpassed $1bn, becoming the first Vietnamese tech firm to do so.
Do said this growth is partly fuelled by its commitment to workforce diversity, with 38% of its Japanese workforce being local and a strong representation of women across all roles, exceeding industry averages.
“In Japan, 32% of FPT’s workforce is female, and we’re ranked fourth for the ‘Best Place to Work’ for women,” he said, highlighting the company’s achievement in a society traditionally challenged with female workplace participation.
FPT’s success is not solely attributed to its diverse talent pool. The company has also positioned itself to capitalise on emerging technologies and market trends.
“We always try to leverage Vietnam’s image as one of the digital hubs in ASEAN,” said Do, adding that this allows the company to offer competitive pricing while maintaining high-quality service delivery through its distributed workforce model.
Lower-cost talent
In its distributed workforce model, FPT taps lower-cost talent in offshore locations such as Vietnam, the Philippines and India, while maintaining nearshore and onsite teams to provide localised support in the customer’s language and time zone. “This combination of offshore, nearshore and onsite teams allows us to offer the best possible service,” said Do.
FPT is further sharpening its competitive edge by providing a full spectrum of IT services, ranging from consulting and software design to development, maintenance and operations. The company has also built expertise around SAP, Salesforce and Microsoft Dynamics 365 implementations.
In particular, the company is capitalising on the demand for SAP migration services. Do noted the dominance of established SAP implementation players, adding that FPT is using its support for end-of-life SAP ECC 6 systems to build relationships with clients and position itself to support them in future SAP S/4 Hana implementations.
Beyond SAP, FPT also provides application modernisation services, including cloud migration. It has partnered with major cloud suppliers such as Amazon Web Services and Microsoft, with plans to establish a consulting arm in Singapore next year to cater to the growing demand for cloud consulting services.
Like many tech companies, FPT is also building up its AI capabilities, with plans to invest $200m in Nvidia graphics processing units and cloud infrastructure to establish AI hubs in Vietnam and Japan.
“We believe AI will be a significant growth driver for FPT,” said Do, adding that AI and data analytics currently contributes around 10% of revenue, but the company expects this to increase substantially as demand for AI and data engineering services grows.
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While AI represents a future growth engine, the company’s current revenue streams are anchored by several key industries. Manufacturing – including automative – and finance are its largest revenue contributors, accounting for roughly 30% and 20% of its revenues in Asia-Pacific, respectively.
Legacy system modernisation, particularly mainframe migration, also presents significant opportunities, with many large companies, particularly those in Japan, still relying on mainframe systems, said Do.
Addressing the need to migrate mainframes to modern platforms and cloud environments, FPT has assembled a team of 300 mainframe experts across Vietnam and China in a bid to capture a share of this growing market. “We plan to join hands with a big systems integrator in Japan to expand our pool of mainframe experts and train younger engineers to work on Cobol systems,” he said, noting that the mainframe managed services market in Japan is worth about $15m each year.
Despite its successes, FPT faces several challenges. Talent acquisition, particularly in markets like Japan, remains a major hurdle. Do said the company has to compete with large Japanese firms such as NTT and Fujitsu for talent, often paying above market rates to recruitment agencies to hire local experts.
Another challenge is penetrating the public sector, with FPT having to work through local suppliers such as NCS in Singapore, impacting profit margins. “We need to find ways to work directly with the public sector, like Accenture and IBM do, or form joint ventures with local vendors,” he said.
Meanwhile, Indian IT giants, such as Wipro, Infosys and Tata Consultancy Services, are nipping at FPT’s heels thanks to their ability to offer services from lower-tier Indian cities, putting pressure on pricing.
Still, Do is confident in FPT’s ability to navigate the challenges, stressing the importance of the company’s focus areas and commitment to workforce development and diversity. “We are investing in the future,” he said. “And we believe our unique approach will enable us to continue delivering exceptional value to our clients and drive sustainable growth in the years to come.”
