Under the deal, Microsoft Office Systems software will be loaded onto 300,000 central and rural government desktops and computers in educational institutions, said a spokesman for Microsoft.
"The agreement demonstrates very strong commitments of the government of Vietnam," in protecting intellectual property rights, PM Dung told Ballmer before the signing ceremony.
Meanwhile, Ballmer said Vietnam was "a real strong, committed member" of the World Trade Organization, which it joined in January.
"I see a prosperous future ahead for Vietnam, and the country is doing the right things by looking now at how it can foster a healthy local software ecosystem, which will help open up this market to the rest of the world," Ballmer said in a statement.
The deal aims to make Vietnam's government compliant with intellectual property (IP) protection rules and to foster a vibrant information and communication technology (ICT) industry, both sides said in the statement.
In April 2006 Microsoft signed a copyright agreement with Vietnam's Finance Ministry to make it the first arm of the government to use licensed software. The signing took place when Microsoft founder Bill Gates visited the Southeast Asian country.
The software piracy rate in Vietnam is about 90 percent, one of the highest in the world, according to the US-based Business Software Alliance, a piracy watchdog group. A version of Microsoft Windows can be bought on the street for as little as 50 cents.
The Business Software Alliance hails the licensing agreement saying it demonstrates how the Vietnamese government is serious about protecting intellectual property rights and reducing piracy.
"We anticipate that the Vietnam government licensing agreement of desktops could reduce the overall piracy rate in Vietnam significantly next year," Jeffrey Hardee, the Alliance's Asia Pacific regional director said in a Microsoft Corp. statement.
Source: Reuters, AP