FPT’s billion dollar dream about digital transformation services

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At the investor conference, Mr. Truong Gia Binh, chairman of the management board of FPT had acknowledged technology and education as the group’s two major fields. FPT’s aim is high: the group strive to earn a revenue of 1 billion dollars before 2021 in technology, double its current revenue. In achieving this, digital transformation is expected to be major player.

Technology is pinpointed as one of the major fields for FPT.

After its official divestment from technology devices retail and provision in 2017, FPT had switched its focus to 3 fields: Technology, Telecommunications, and Education. “Our aim is for FPT to become one of the top global 50 firms for technology services within 10 years”, Mr. Binh shared with the investors.

For the actualization of this ambition, FPT had pinpointed Technology as the group’s head field, while Education stays an important platform to satisfy future personnel demands.

FPT’s revenue for the year 2018 was recorded at 23,213 billion dong, a decrease of 45% compared to that of 2017. This is due to the group’s retreat from technology devices retail and provision. However, we can see a raise in software export and information technological services.

Mr. Tran Dang Hoa, CEO of FPT Software had shared that FPT’s revenue for the year 2018 in technology came close to 500 million USD, which is a 40% increase in profit compared to 2017. 73% of this number came from foreign markets, particularly from software exporting.

The target is for FPT Software to double its current revenue, reaching that of 1 billion USD in 2021. A major incentive is digital transformation consultant services, with the annual expected growth rate at 40-45%, taking up 45% of target revenue.

“We think that figure is reachable. The 20% annual growth is hardly out of reach to FPT,” Mr. Tran Dang Hoa shared.

Digital transformation for domestic and international firms is one of FPT’s focus in the technological field. Currently, FPT has over 100 customers through 45 nations, some of those among the top 500 with highest revenues in the world.

FPT’s major market lies in Japan, America. Europe and Asia-Pacific, with Japan taking up 56% and with growth of 30%, followed by America at 23%, growing at 55%. “EU is slow in the past 10 years, but we had acquired 10 new customers in this market, skyrocketing our workload”, said Mr. Hoa.

Toyota is one of FPT’s major customers, with a team of 1,200 FPT engineers dedicated to this firm. At the moment, FPT is also discussing potentials of providing digital transformation services for Airbus and Palantir, as well as some international airlines.

“FPT Software has around 100 customers, aside from Toyota and Airbus. In average, a customer will invest 5 billion USD for technology, and FPT services is only a small part of that,” said Mr. Hoa.

According to IDG, 90% organizations and businesses now have plans for digital transformation. Most CTOs and technology managers had agreed that digital transformation had greatly benefit the business.

Major challenges to digital transformation lies in a high quality human resource. This is the reason to FPT’s focus in Education, as it aims to extend its current education model to a national scale.

Mr. Truong Gia Binh along with FPT’s directors sharing about the group’s path to digital transformation.

At the moment, there are four software and training complexes in Ha Noi, Ho Chi Minh City, Da Nang, and Can Tho, providing education for 77,000 IT students. New complexes in Quang Nam and Binh Dinh are currently in the works for the near future.

FPT managers expressed their decision to carry on merging and acquisition of foreign companies to higher their resources. “Digital transformation consultant is race that had just begun. At the moment, we are waiting to see how the game will change. Nothing can be said for sure as of now”, the chairman acknowledged.

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