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Ukrainian crisis impact on its development market. SWOT analysis.


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Ignite’s leadership participated in IT Weekend Ukraine 2014 on September, 13 in Kyiv. Aviram Eisenberg, founder and CEO of Ignite shared his insights on Ukrainian crisis and its impact on its IT development market. In this presentation you will find out about main problems and opportunities that lie ahead of Ukrainian IT market.

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Ukrainian crisis impact on its development market. SWOT analysis.

  1. 1. Ukrainian crisis impact on its development market. SWOT analysis. Aviram Eisenberg IT Weekend, Kyiv 2014
  2. 2. Are you Crazy???? A lot of people ask me if I am crazy? You are living in Ukraine ? In these times??? Well, I live in Israel, we are kinda used to state of war… I am just replacing this: With this:
  3. 3. About Me Father of 3 wonderful children High-Tech professional for the last 30 years Computer geek in my teenage days Platoon commander in the Army Intelligence (computer related) Computer Science Graduate from the Technion Chief Architect at Mind CTI Founder and CEO Of Ignite – a global IT company Chairman of the Israeli R&D Managers forum Lives in Kiev (Ukraine is my second home!)
  4. 4. SWOT Analysis * according to the World Bank
  5. 5. 5 IT industry – global trends The Virtualization trend The Cloud trend The BYOD trend The mobile explosion New type of High-Tech entrepreneurs – I HAVE a DREAM As a result, demand for developers is on the rise! As virtual worlds are growing more people are needed in the industry.
  6. 6. 6 Global Competitive Landscape of Outsourcing South America: Argentina, Brazil, Chile, Costa Rica, Mexico and Panama Asia/Pacific: China, India, Malaysia, Pakistan, Philippines, Thailand and Vietnam Europe, the Middle East and Africa (EMEA): Czech Republic, Slovakia, Hungary, Poland, Romania, Russia, Egypt, Morocco, South Africa
  7. 7. 7 Ukrainian IT industry “Ukraine’s ITO service industry is the largest one in the whole Central and Eastern European region with 90% of it being focused on external markets.” Main export countries of SW dev services: US, UK, Germany Top 25 Ukrainian SW companies + 1363 workers in 2014 899 Number of open vacancies in 2014, on DOU.UA 967 968 889 969 875 875 888 928 868 1009 924 1050 1000 950 900 850 800 750 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
  8. 8. 8 Strengths – The Talent Pool High quality of IT talent as a result of strong ICT education 30% of high school grads choose IT related subjects in universities Ukrainian Developers reputation Talent pool growth over 16,000 bachelors in IT every year Certified IT professionals Ukraine holds 4th position in the world in the total number of certified IT specialists The hunger to succeed
  9. 9. 9 Strengths – Business factors Large pool and relatively low costs of ICT resources Result-oriented approach deep involvement of software developers in client’s projects and healthy business environment Convenient geographical location right in the center of Europe and in the same time zone and mentality Fast growth of IT sector Ukrainian exports leverage more than 3 billion $ a year with 84% growth of IT support services volume
  10. 10. 10 Weaknesses High fragmentation of IT market most of the companies are fairly small Low rate of foreign investment $2.67 billion - largest shares for Cyprus, Germany, the Netherlands & Russia in the past* “Brain drain” Europe, Canada, US, Australia Unfavorable government policies that are not assisting IT economy, but burden it * Stock of foreign direct investment according to Ukraine’s State Statistics Committee
  11. 11. 11 Weaknesses Low IT spending in internal market Per capita Ukraine was only #33 in 2013, the lowest in CEE. Loss of Crimea and part of Donbass (taken by Russia & separatists) which accounted for 5-7% of IT spending in the country Corruption issues Non-guaranteed equity rights
  12. 12. 12 Threats Fake war propaganda manipulate world opinion regarding the genuine situation in Ukraine and scares off investments and potential clients Increased "Brain drainage“ due to the fear of the current political situation Economical Recession throughout the country
  13. 13. 13 Opportunities Fall of the Hryvna Making the EUR and USD currencies coming in to this industry stronger. Low attrition People hesitate to switch projects as insecurity kicks. Developers are forced to stick to their jobs. Market consolidation Active international IT enterprises on the Ukrainian market that have no problem of raising cheap credit resources in Europe or US will absorb smaller companies. Potential joining the EU It will open new doors and create more opportunities abroad. Industry shift from IT to High-Tech Over time It will leap into a smart and thriving high-tech market.
  14. 14. 14 Challenges Corruption elimination Build new and well paid army forces, police, court judges, prosecutors Guaranteed equity rights Open registry lists and cadasters for all equity rights (land, real estate, stocks, etc.) Education system reform Decentralized, more privately held, curriculums created by professional communities Transparent and automated bureaucracy E-government, easy doing business ranking
  15. 15. 15 Risk takers… Climate of uncertainty Unstable situation Zero visibility for business (to make global decisions) Necessity to go blindfolded
  16. 16. 16 Conclusion IT Ukraine today and counting:  1500+ IT companies  250K+ IT community, ~ 70K are active  Doing Business Rank: in 2013 – 140, in 2014 – 112 (28↑) Ukraine is driving in the right direction, lets help her overcome the challenges!
  17. 17. 17 What is the future of Ukrainian IT? The Chinese curse: “May You live in interesting times” The Israelis say: “Every difficulty is an opportunity…” This is the birth labor of new High-Tech economy in Ukraine This is the birth of a new Ukraine!
  18. 18. 18 Questions? “No risk, no champagne.” +38 0412 46-61-79