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IT-market in Russia: stereotypes and realities

Home » Experts and Analyses » IT-market in Russia: stereotypes and realities
13.08.2015
Blagov

Alexander Blagov, the VentureVolga.com editor, reflects on the situation in the Russian IT-sector

Results of a recent survey on our website readers’ opinions reflect more established in public opinion stereotypes than the reality.

Users of the VentureVolga.com were asked to answer the question: «In the event of difficulties in the supply of software from the US whether Russia alone to meet their needs for these products?»

This is the rare case when evaluating Russian and English audiences were similar site. Among the Russian-speaking readers, «No» was given by 57% of respondents, «Yes, with the help of products from China and India» — 29% and a just «Yes» — 14%.

Among the representatives of English-speaking audience, the figures were respectively 70, 20 and 10%.

Note that we are not talking about the quality of Russian programmer, their highest qualification is little doubt. The problem (if it exists) rather affects the state of affairs in the Russian economy.

Perhaps influenced by the outcome of the survey reports of decrease in volumes of domestic IT-sector in 2013 (in foreign currency terms, not in rubles). You should not ignore the negative emotional effects of the sanctions in 2014, and their possible impact on the volume of the Russian IT-outsourcing sector, which includes companies serving major customers from the United States.

The good news is that IT-outsourcing, the most notable being a fragment of the domestic software industry, does not illustrate the state of the industry as a whole. In this regard, there are four things that are worth paying attention to.

First is the traditional domestic demand. Strengthening of the dollar led to a rise in price of imported software, and Russian programmers focused on domestic consumption, received a tangible competitive advantage.

Second is cheapening the value of Russian software on the international market and its effect is to give — in spite of the possible sanctions. What can stop them in the case of the tightening of the United States to conclude a contract with Indian company, which can order the work in Russia?

The third is the complexity of the economy make the business look for ways to optimize production, and it is traditionally boosts demand for software.

And the fourth is, as you have probably guessed, import substitution and state support of a number of directions.

I think there is no doubt that the country’s leadership is taking measures to level the possible negative effect of the hypothetical difficulties with supply and maintenance of the American company in Russia. Why is hypothetical? Because Russia is a huge market for such corporations as Microsoft, Google and Apple. As for business, then the Americans are not big fans of «shoot yourself in the foot» by giving it the right to this honor to its European partners.

On the other hand — we see efforts of the Government to promote the development of domestic IT-sector. For example, on everyone’s lips is a creation and successful launch of the Unified portal of public services. And there is a feeling that this is just the tip of the iceberg.

Will, if necessary, Russian programmers occupy an American soft niche in the domestic software market? If adequate funding is the problem seems to be quite feasible. Just its implementation will take time. Question — whether it is with us?

To get an answer, I called to my friend Michael, the head of a small company, exporting its own software abroad.

- Tell me, please, what if, for example, Microsoft will cease to serve Windows in Russia tomorrow? Whether it will lead to disaster?

- First, to do it in one day is not so easy. And secondly — well, let’s move on Linux, a big deal.

   
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