Ambition for 2023: $1 billion in software exports.

Illustrative image.

FPT Software's software export revenue for 2023 is projected to reach $1 billion USD. This business plan has been approved by FPT's leadership and is 99% certain to be achieved, as FPT Software already reached $1 billion USD in total contract value and $800 million USD in sales in 2022. With an average growth rate of 26% over the past three years, the $1 billion USD target for 2023 is highly realistic.

So how big is $1 billion in software exports?

To make it easier to visualize, let me use this analogy: 1 billion USD is equivalent to 23,500 VinFast VF8 cars sold in the US (at a price of 42,500 USD per car), which is equivalent to 23.5 Silver Queen ships carrying VinFast VF8 electric cars that were exported from Hai Phong on November 25, 2022.

Or another analogy: $1 billion is enough to import 80% of iPhones, 115% of Samsung phones, or 70% of passenger cars (7 seats or less) for the entire Vietnamese market in 2021.

Furthermore, unlike industrial goods (cars, phones, computers, clothing, shoes, bags, machinery, spare parts) which have low added value, the added value of exported software services is very high, reaching 84%, nearly four times higher than the added value of manufactured industrial goods (for example, in a pair of Nike shoes manufactured in Vietnam, only 22% is Vietnamese, while 78% is American).

Thus, it can be said that $1 billion in software exports is equivalent to nearly $4 billion in exports of other goods such as computers, phones, clothing, leather shoes, handbags, machinery, and spare parts.

Why are software services so high in added value? Because providing software services doesn't require investment in production lines or the import (purchase) of raw materials. The investment in software itself is minimal: each software developer only needs one computer and a small software license worth around $1,200 USD, depreciated over 5 years at $240 USD per year. The largest cost of software services is labor costs (salaries, bonuses, benefits, insurance, training, office space), all of which are spent on people and within Vietnam.

Software exports, in addition to bringing Vietnamese intelligence to the world and creating many high-productivity jobs, also bring foreign currency back to the country, contributing to the national balance of payments and national monetary stability.

Did you know that if a business maintains a steady growth rate of 26% per year, its sales will double after 3 years, quadruple after 6 years, eight times after 9 years, and sixteen times after 12 years?

Thus, if FPT Software maintains its growth rate of 26% per year as in the past five years, its revenue will reach $2 billion by 2026, $4 billion by 2029, $8 billion by 2032, and $16 billion by 2035. This means that by 2035, the value created by FPT Software will be equivalent to $64 billion of the industrial manufacturing sector.

Besides FPT, there are hundreds, even thousands, of other software companies exporting software, creating an economic sector with considerable scale and socio-economic significance, comparable to many other economic sectors.

The opportunities for Vietnam are still enormous, because in India alone, the software export industry brought in $200 billion in 2022, equivalent to 50% of Vietnam's GDP.

Do Cao Bao (Founding Council Member, Board of Directors of FPT Group)