Russian IT companies called the issue of import substitution in IT as the key subject in the industry in 2014. This verdict was reached by the participants of the media briefing “Focus on import substitution: chance or risk for Russian IT industry?” that was held on September 9 in Moscow as part of the 15th anniversary of the non-profit partnership RUSSOFT, the largest Russian association of software development companies.
Russian IT service companies are able to substitute foreign solutions with domestic ones in many fields, noted Auriga’s general manager Vyacheslav Vanyulin. “We need just a bit to do it: a decision made at the national level and the financing of operations.”
“In this event, the domestic IT industry is capable of offering its own products both in the area of specialized and applied software, and the hardware components to provide system availability in the fields crucially needed by the country,” Vanyulin added.
Numerous examples of implementation of these solutions were presented by Konstantin Varov, managing director of Diasoft Platform. Several Russian banks have already been hit by the sanctions imposed on Russian business structures by the governments of different countries. “They were informed without prior arrangement that the software support was stopped and no new releases would be supplied,” noted Varov. “In fact, Russian banks were suggested to worm their way out of the situation independently.”
In this context, many of Diasoft Platform’s in-house solutions helped several Russian financial structures to avoid losses and assure operability of their critically important systems. In Varov’s opinion, the sanctions helped Russian developers in competition with foreign companies that not long ago held a monopolistic position in the corresponding software market. Diasoft’s managing director also noted that foreign customers became aware of solutions offered by Russian companies. He alleges that one of the company’s US clients refused to conclude a contract due to political risks.
Andrei Sviridenko, president of SPIRIT, confirmed that the sanctions allowed Russian developers to make their way into segments where it was not possible to compete with foreign companies. An example is the implementation of a video conferencing service by Transtelecom in a market which was previously dominated by Cisco, Avaya, Microsoft and others. The sanctions resulted in a delay in equipment supply, system updates and so on. In this context, a Russian solution helps avoid dependence on foreign vendors. “We hope that the current situation will help us supply our technologies even faster to Russian governmental agencies and corporate clients,” Sviridenko concluded.
The speakers also noted the changes in relations with their foreign customers. “Neither our company nor our clients are included in the sanctions list. Our business is obstructed not by sanctions themselves but by the things that generated them,” First Line Software President Nikolai Puntikov commented. “Now more than ever we have to prove to our clients that we are part of a large global business, we know well how to do our work and we remain professionals in our field.”
Collaboration between Russian developers and global companies, in the opinion of the general director of Intel Software Igor Kaloshin, is the most important factor for the Russian IT industry. “Intel and other transnational companies present on the Russian market are key as a very important element for the development and life-sustaining activity of the ecosystem,” he emphasized. Kaloshin noted that the company entered the Russian market more than 20 years ago and its staff of developers inside Russia is over 1000 persons. Kaloshin also reminded about the investments of Intel in the Russian IT industry and the activities of the Intel Capital fund. The US corporation is still committed to its Russian projects.
“When speaking about the importance of import substitution, its economic viability is obvious. But we have to act here gradually and prudently. There exist two approaches: prohibitive and regulatory. In the IT industry, only the latter should be used. If there is a critically vulnerable component that must be replaced, there should be formulated a clear work order. Certainly, it is possible to kill all sparrows in Russia but you have to realize that afterwards locusts will come.”
Russian IT industry in 2013
In the course of the briefing, the general results of the traditional survey of the Russian IT market performed by RUSSOFT on an annual basis were made public.
As a whole, the year 2013 was recognized as successful for responding companies. Their consolidated turnover increased by 16% compared to 2012, and their export earnings in Russia – by 14%. Nine members of NP RUSSOFT entered the TOP-100 rating of the best world service companies according to the annual global survey by Global Services. These are Artezio, Auriga, DataArt, EPAM Systems, First Line Software, Luxoft, MERA, Reksoft, and Return on Intelligence (previously known as Exigen Services).
The research shows that the situation in the labor market is still difficult. In 2013, the share of companies experiencing difficulties due to the shortage of skilled specialists increased. In 2011, 54% of participants in the RUSSOFT survey stated that they were not short of specialists. However, in 2012, the proportion of these companies reduced to 27% and by 2013 their number fell further – to 24%.
More positive was the estimate of the status of Russian infrastructure by market insiders. It was deemed “good” by 32% of respondents in 2013 compared to 23% in 2012. At the same time, it is worth noting that the companies positively assessed not so much the existing level as the current progress at hand.
Another positive change recorded in the research is a “startup boom.” The number of young companies with less than five years of market experience increased more than twofold.
