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Korea IT Service Firms Looking for Opportunities in Southeast Asia
Korean IT Firms Tying up with Southeast Asian Partners
Korea IT Service Firms Looking for Opportunities in Southeast Asia
  • By Michael Herh
  • July 29, 2019, 12:57
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Hong Won-pyo (right), CEO of Samsung SDS, shakes hands with Nguyen Trung Chinh, CEO of CMC after signing a strategic investment contract in Hanoi, Vietnam on July 26.

Samsung SDS will make a full-scale foray into the Southeast Asian IT service market by becoming the largest shareholder of CMC, a large IT service company in Vietnam.

Samsung SDS announced on July 28 that it signed an investment contract with CMC on July 26 under a strategic investment agreement. CMC is the second largest IT services company in Vietnam engaged in system integration (SI), software development, and cloud operation. Samsung SDS signed the strategic investment agreement in May to acquire a 25 percent stake in CMC for around 50 billion won. As a result of this agreement, Samsung SDS will be able to participate in the board of directors as the largest shareholder of CMC.

Through this investment, Samsung SDS hopes to expand its business in Vietnam and Southeast Asia by combining its technology with CMC’s local business capabilities such as its IT infrastructure and sales networks. Samsung SDS plans to use CMC as a software development base for Southeast Asian projects.

The two companies also selected intelligent factories, cloud computing, security, smart buildings, and content management service as key business areas. In the future, they plan to jointly work on AI, blockchain, and big data.

According to the Asian Development Bank, Vietnam's gross domestic product (GDP) growth rate is expected to reach 6.8 percent this year. Starting with Korean companies doing business in Vietnam, the two companies can expand their market by including local Vietnamese companies as their corporate customers and at the same time, invest in research and development (R&D) with low-wage local professionals.

As a result, Korean companies are forming business ties with Southeastern Asian companies as Korean companies became the foreign companies that took over the largest volume of stakes in Vietnamese companies last year.

The Naver Business Platform (NBP) signed an agreement with Deskera, a SaaS company. Dekera will provide cloud-based enterprise business software solutions to about 20,000 Southeast Asia corporate customers through a global legion of the Naver Cloud Platform.

SK Infosec also partnered with local IT supplier Innovix and security company Adura in Singapore while starting a security management project in Singapore last year. The security management market in Singapore is about 140 billion won with the highest growth in Southeast Asia. In March, SK Infosec opened the Singapore Security Management Center with Innovix and designated it as a base for Southeast Asia.