|Vietnam's Growing Role in Outsourcing|
Some of the biggest names in technology are turning to the Asian country for top-notch game design and software development
When Microsoft's video game unit began looking to offshore some work in 2002, Vietnam was hardly an obvious choice. But after a fact-finding team returned from an Asia-wide tour including stops in India, China, and South Korea, a small outfit named Glass Egg Digital in Ho Chi Minh City was a top contender. After successfully completing a pilot project designing 3-D racing cars used on the Forza Motorsport game installed in every Xbox console, Glass Egg's relationship with Microsoft (MSFT) has steadily grown.Today, Glass Egg Digital designs most of the 330 different models in Forza Motorsport 2. Not only do the digital Lamborghinis, Maseratis, and Mercedes look and handle on screen exactly like the real thing, but equally important, they look just as convincing as crumpled wrecks after collisions.
Next up, Microsoft is planning to contract out the considerably more demanding task of creating the tracks and cities through which its cars race. "Today we work on a massive scale [with Glass Egg]," says Nick Dimitrov, senior business manager at Microsoft Game Studios. "We have pretty much put them through the grinder on QA [quality assurance] compliance, and we couldn't be happier."
Selling to the Masters
He's not the only one singing Glass Egg's praises. "They have done some fantastic stuff for us," says Brian Woodhouse, executive producer at Bizarre Creations in Liverpool which outsourced the creation of digital gas masks, telecom towers, and statues that get shot up in a gun-lovers' game called CLUB under development for Sega.
Intel Planning Plant
Homegrown Vietnamese companies are gaining momentum too. The country's largest outsourcing outfit is a division of Hanoi-based IT company FPT Corp., which just garnered a $36.5 million investment from private equity firm Texas Pacific and Intel Capital.
Lost on the Map
Another drawback is the lack of fluent English speakers, though clients say this problem is minimal as most communication is via e-mail. Helping balance out these deficiencies are the country's low wages—programmers earn about one-tenth what computer programmers make in the U.S.—a young and highly motivated workforce, and low staff turnover rates of about 5%.
Mastering the Background ArtsThe company's big challenge will be keeping its edge over China. "Ultimately China will beat us on cost," says Steve Reid, a Glass Egg business development manager. "If we want to be in business in five years, we have to move up the value chain." For his company, that means mastering the technically more demanding task of environment design.
Reid says its first attempt, working with Electronic Arts to create an imaginary Middle Eastern background for EA's Battlefield 2 war game was a huge learning experience for both companies. Turning out sleek driving machines is a snap, says Reid, compared to the challenge of portraying rusted tanks, bombed-out mosques, and water-stained walls.
(by Frederik Balfour on Business Week)