The East European company is currently in the active phases of negotiations with its multinational clients to pilot the Vietnam center

Luxoft, a global provider of high-end software application and product development services, has opened a new delivery center in Ho Chi Minh City, Vietnam. The company plans to build the headcount up to 200 to 300 people by the end of 2009.

“Our goal is to build solid teams that would inherit Luxoft’s culture of engineering excellence. Therefore, our plans are conservative. If we can build up to 200-300 people by the end of 2009, we will be happy,” answers Dmitry Loschinin, President and CEO, Luxoft. “Our goal is to recruit the very best.”

Luxoft’s new Vietnam office will offer a comprehensive mix of application and product development services, which will be more or less the same high-end IT outsourcing services that they offer from their East European center. However, the lower cost will be determined by the competitive labor costs in Vietnam.

With delivery locations across EMEA, North America, Central and Eastern Europe, the addition of the Vietnam delivery center further enhances Luxoft’s ability to provide worldwide clientele with the optimal mix of nearshore, offshore and onsite delivery models.

The Vietnam delivery center is ideally positioned for clients looking to diversify their sourcing geography portfolio and lower their outsourcing costs. It will service both ISV and enterprise customers. “We are currently in the active phases of negotiations with its multinational clients to pilot the Vietnam center,” adds Loschinin.

Luxoft has been adamant in the past not to ride on the Indian or Chinese outsourcing wave where it felt that the prevailing skill sets didn’t match well with its customers’ demands for higher-end, more complex outsourcing contracts. And that is why possibly the company is not looking at further expansion in other Southeast Asian countries.

However, Luxoft chose Vietnam as the educational system, which it believes, is closer to the Russian one in its focus on Mathematics (when compared to India or China) and a general cultural closeness between both countries due to their communist past.

Furthermore, people posses a strong work ethic and Vietnam has the lowest attrition rate in the region which is presently between 5 percent and 9 percent. Though Vietnam with its French speaking contingent is seen as a particularly good fit for Luxoft smallish French operation, it is also seen as a springboard to winning outsourcing business with Japanese clients.