RUSSIAN SOFTWARE          DEVELOPING INDUSTRY         AND SOFTWARE EXPORTS                       9th annual survey2012  Wi...
EXPAND YOUR    SOFTWARE    ENGINEERING                                                      HORIZONS                      ...
Editors Note                                      Dear colleagues!     Let me introduce results of the latest (the 9th in ...
CONTENTSMETHODOLOGY..........................................................................................................
METHODOLOGY
Methodology    The total research (which the RUSSOFT Association                                    Prevalence of Moscow a...
Methodology                                                                                                      The ratin...
Methodologyfor their parent companies. The assessment of the                        estimations. Experts took into account...
MethodologyAssociation) checked the report and drawn                      Distribution of the respondent companiesconclusi...
Chapter 1.     Positions of Russiain the global IT market
Chapter1. Positions of Russia in the Global IT MarketRUSSIA IN GLOBAL IT RATINGS                                      In E...
Chapter1. Positions of Russia in the Global IT Marketcomputers and experts in Russia are involved in spam         economic...
Chapter1. Positions of Russia in the Global IT MarketACHIEVEMENTS OF INDIVIDUAL                                    Industr...
Chapter1. Positions of Russia in the Global IT Market(EPAM Systems and Luxoft are among 8  companies              Top 100 ...
Chapter1. Positions of Russia in the Global IT MarketKaspersky Lab takes the 7th place. In Europe "1C"         telecommuni...
Chapter1. Positions of Russia in the Global IT Marketsince 2012. The total amount of financing for 2012                   ...
Chapter1. Positions of Russia in the Global IT Market    Following the results of 2011, Russia moved up                   ...
Chapter1. Positions of Russia in the Global IT Market Russian market of cellular communication and mobile phones          ...
Chapter1. Positions of Russia in the Global IT Marketincrease in demand for the mobile Internet. According   in demand for...
Chapter 2.     Volume and Structureof Russian Software Export
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
Russian Software Development Industry and Software Exports 2012 (Report, Russoft)
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Russian Software Development Industry and Software Exports 2012 (Report, Russoft)

  1. 1. RUSSIAN SOFTWARE DEVELOPING INDUSTRY AND SOFTWARE EXPORTS 9th annual survey2012 With support from APKIT Association RUSSOFT Association 2012
  2. 2. EXPAND YOUR SOFTWARE ENGINEERING HORIZONS YOUR STRATEGIC TECHNOLOGY PARTNERServing Financial Services, Automotive and Transport, Travel and Aviation, Technology,Telecom and Energy SectorsInnovative solutions powered by: Exceptional talent pool of 5600+ engineers Deep industry and technical domain expertise Global delivery capability through 18 offices in 10 countries Best-in-class processesLuxoft has proven to be an invaluable partner over the past several years due to itsindustry expertise, ability to innovate and exceptional product and service delivery.DINESH PALIWALCEO, Harman InternationalContact Us:www.luxoft.com, info@luxoft.com, +7 495 967 8030
  3. 3. Editors Note Dear colleagues! Let me introduce results of the latest (the 9th in a row)industry survey on the export of software and of softwaredevelopment services from Russia. The survey was conducted by RUSSOFT (non-profitpartnership of software development companies) in February-April 2012 where more than 120 market players took part. As RUSSOFT conducts the research annually using thesame methodology, we can track the dynamics of industrydevelopment and evaluate its positions in the global market.We can also identify long-term and medium-term tendenciesand make forecast for the further course of events. The core of respondents is composed of RUSSOFTmembers who represent practically all Russian cities with largeconcentration of software development business, but alsoinclude a number of leading Ukrainian and Belorussian companies. Altogether they represent the most active part of the IT community which is on the edgeof the world competition. This allows to make the most adequate evaluation of the situationin Russia in terms of the Global IT market, to compare business conditions in our countryand abroad, to identify key problems in the industry development and to offer solutionscorresponding to the world best practices. During the last year there were no critical changes in the world economy. That allowedthe Russian software development industry to increase export up to 22% and to reach 4 billiondollars in sales of software and of software development services abroad. The competencesand the experience in the sphere of high technologies, the ability to find non-standardsolutions are the industry strengths. It is pleasant to see that business skills are added to thetechnical competences. It is reflected in consecutive strengthening positions of the industryleaders in the international ratings. Russia remains a country with a huge human potential in the sphere of informationtechnologies. The consequences of the difficult demographic situation in the country duringthe 1990-ies are observed now and they create additional problems for recruiting qualifiedpersonnel to the growing industry. Nevertheless, the results of the survey testify positiveexpectations of the market players which allows to predict continuing growth by 20%–25% inthe next two years. Taking the opportunity, I would like to express profound thanks to Dmitry Zhelvitsky fromOpen Systems Publications who has done great analytical work; to Confirmit, Toy-Opinion andFort M which assisted the survey as well as to prof. Andrey Terekhov from the St. PetersburgState University who has strongly assisted in the report editing. We are very grateful to the Association of Computer and Information TechnologyCompanies (APKIT) and to our sponsors without whom it would be impossible to performsuch a large-scale project. Many thanks to all participants of the survey that provided information on their respectivecompanies. Altogether we took one more step on the way of promoting the relevantinformation on the Russian software development industry which makes it more open for theRussian and for the Global market. With my highest estimations, Publishing Editor RUSSOFT Association President Valentin Makarov 1
  4. 4. CONTENTSMETHODOLOGY....................................................................................................................... 3CHAPTER 1. POSITIONS OF RUSSIA IN THE GLOBAL IT MARKET............................................ 8 Russia in Global IT Ratings.............................................................................................................. 9 . Achievements of Individual Russian Companies in the World Ratings.......................................... 11 Russian ICT Market........................................................................................................................ 13CHAPTER 2. VOLUME AND STRUCTURE OF RUSSIAN SOFTWARE EXPORT......................... 18 . Software Development Services................................................................................................... 20 Software Products and Ready-to-Use Solutions........................................................................... 21 Software Development Centers of Foreign Corporations (Captive Centers)............................... 23CHAPTER 3. MAJOR TRENDS IN THE RUSSIAN SOFTWARE DEVELOPMENT INDUSTRY....... 25 Quality Management System Certification.................................................................................... 26 Investment Attraction................................................................................................................... 27 Investments Into Foreign Companies. .......................................................................................... 28 . The Global Software Market and Ways to Increase Sales for Russian Suppliers........................... 29CHAPTER 4. GEOGRAPHICAL REACH AND MAIN VERTICAL MARKETS OF THE RUSSIAN SOFTWARE DEVELOPMENT INDUSTRY................................. 32 Main Geographical Markets.......................................................................................................... 33 Vertical Markets............................................................................................................................ 34 Geographic Distribution of Marketing and Sales Offices of Russian Companies.......................... 34 Geographic Distribution of Development Centers....................................................................... 35CHAPTER 5. HUMAN RESOURCES AND LABOR MARKET. ..................................................... 38 . Employee Recruitment and Headcount Reduction. ..................................................................... 40 . Lack of Engineers. ........................................................................................................................ 41 . Foreign Language Skills ............................................................................................................... 44 Salary. ........................................................................................................................................... 44 . Staff Training. Universities............................................................................................................. 45 Situation on the Labor Market in Russia and in Other Countries.................................................. 48CHAPTER 6. TECHNOLOGIES. ................................................................................................ 52 . Operating Systems........................................................................................................................ 53 DBMS. ........................................................................................................................................... 54 . Development Tools. ..................................................................................................................... 54 .SUMMARY............................................................................................................................... 56 .PARTICIPANTS OF THE SURVEY.............................................................................................. 60 2
  5. 5. METHODOLOGY
  6. 6. Methodology The total research (which the RUSSOFT Association Prevalence of Moscow and St. Petersburgconducts annually since 2004) traditionally begins with companies in the total number of respondents remainspolling a regularly updated database of 1400 Russian the same since 2005. However since 2010 their sharecompanies and organizations which are engaged in (by number of companies) exceeded 60% and sincesoftware development. The survey was carried out then did not fall below this level. First it may beby two companies — Toy-Opinion and Fort M, which explained by the fact that financial crisis acceleratedare both specialized in the marketing research. We the process of business consolidation in the Russianhave also used the Confirmit polling technologies software industry (especially it concerns the customfor collecting questionnaires. During the survey, software developers). And the consolidation processcompanies which have had export contracts  — was going primarily in favor of businesses from bothirrespective of their export share in the total amount capitals. One more reason is that conditions for theof sales — were selected. As a result, 127 duly filled startup creation and development in Moscow and in St.questionnaires have been collected. Petersburg are more favorable than in other regions. The structure of the polled companies array in According to the last poll, 63% of the surveyedcomparison to the previous research has changed, companies are from two Russian capitals. Accordingbut as a whole it does not prevent from comparing to the cumulative income and export revenue of allpoll results obtained in the last 2 years for revealing export companies that took part in the research, theavailable trends. Besides a relative change in numbers share of Moscow and St. Petersburg is even higher —in this or that respondent group in certain cases 87% and 93.4% respectively. It is possible to assumereflects the real processes going on in the software that in reality regional companies have a biggerbranch. Therefore for example it is possible to note share (both by number of companies and by thea sharp increase of young companies share (with the consolidated revenues) but the error in this case doeswork term in the market up to three years) from 2% not exceed one per cent.to  10%. According to venture companies and Another feature is the fact that practically allinvestment funds, after 2008 a considerable increase in large Russian software development companies werethe number of startups has been observed (according created in Moscow and have their headquartersto some information — manyfold increase). there. Only few large and well-known companies are located outside Moscow. The share of the leaders in the software export volume among the regional developers is very low too (the exceptions are MERA Distribution of the respondent companies shares by companies age Networks in Nizhny Novgorod, Alawar in Novosibirsk). The contribution of regions to the export software survey 2010 survey 2011 survey 2012 development is actually much stronger if we take into 3% 2% consideration the very fact that more than half of 10% large Moscow or St. Petersburg companies have their 23% software development centers in regions (or have at 28% 35% 41% 48% 25% least one regional development center each). Companies representing 25 Russian cities took part 27% 28% 30% in the survey (by the location of their headquarters or of the main production site). To add that they Companies age C i have remote development centers in 21 cities. Up to From 4 From 9 More than Thus, industrial software development for export is 3 years to 8 years to 13 years 14 years conducted at least in 46 Russian cities. The three leaders by the number of offices (headquarters, remote development centers, Distribution of respondents depending on their location 2007 2008 2009 2010 2011 2012 2% 17% 19% 22% 27% 23.7% 24% 40% 39%* 34%* 40% 40.4% 8% 50% 27% 10% 13% 21.9% 9% 20% 13% 14% 26% 25% 29% 6% Moscow and St. Petersburg Siberia Ural Other towns Moscow Region (in 2006–2009 — Novosibirsk) * — without Moscow Region 4
  7. 7. Methodology The rating of the Russian cities by the number of company head of- Structure of the aggregate income of participating companies fices (headquarters, remote development centers and sales offices) depending on their location Place City Number of offices 2008 2009 2010 2011 0.2% 1 Moscow 54 3% 1% 4% 1.9% 7% 10.9% 2 St. Petersburg 38 14% 29.2% 48% 22% 20.1% 3 Novosibirsk 9 21% 60%* 68% 66.9%* 21.2% 4–5 Nizhny Novgorod 7 1.6% 4–5 Rostov-on-Don 7 6–8 Voronezh 5 Moscow St. Petersburg Siberia (following the results of 6–8 Omsk 5 Ural Other towns 2008 — Novosibirsk) 6–8 Samara 5 *— without Moscow Region 9–12 Izhevsk 4 9–12 Kolomna 4 9–12 Krasnoyarsk 4 Distribution of export revenue of participating companies 9–12 Yaroslavl 4 depending on their location: 13–15 Vladimir 3 80% 13–15 Kazan 3 76%* 74.8%* 70% 13–15 Tyumen 3 67% 60% 50% was $738 million (68% from the total turnover). 40% When considering structure of the aggregate income 30% and that of export, depending on respondent 27% 20% companies headquarter location we need to take 18.6% 14% into account the fact that by 2008–2010 formation 10% 6% 5.6%** 3% 3% 4% 1% of correct Russian software development industry 0% "pyramid" would have come to the end. Just 8% of 2009 2010 2011 the respondent companies delivered up to 73% of Moscow St. Petersburg Siberia Other towns software and software development service export. * — without Moscow Region, ** — together with the Ural At the top of the pyramid there is a group of leaders which naturally turned into the global corporationsrepresentation and sales offices) remained the same that have their sales offices in all leading markets andfor the entire research period. These are Moscow, their branched-out network of development centersSt.  Petersburg and Novosibirsk. The gap between in Russian regions and in other countries.them is traditionally very big. Considerable superiority The number of interrogated companies withof Moscow is partly explained by the fact that many a share of export in the revenue less than 10% wasregional companies open their trade missions in the sharply reduced in comparison to the last year butcapital. St. Petersburg also receives additional scores it hardly reflects the real processes in the industry.due to the location close to the EU border. Most likely this reduction is caused by the change Two or three cities appeared in the Top-15 just of respondents quantity and structure. The sameby chance (by the number of respondents in this applies to the reduction of the share of companiesresearch) but you can never say that about Nizhny producing software products and ready solutionsNovgorod, Rostov-on-Don, Voronezh and Omsk (from 50% to 22%).which have been among the leaders for several years The largest Russian software developmentalready. companies did not participate in the survey (neither Among 15 cities which are leaders in software and did them in the last years). Information on theirIT services export, cities from Ural region are absent. financial performance was collected from differentA year before, developers from this region were put sources: mass media publications, companies pressinto a separate group for the first time. This year, they releases and their web sites. In addition, estimations ofwere so few that similar allocation was meaningless. external industry experts and the data received whenIt is quite possible that software development for communicating with company managers were usedexport in the Ural area is not developed enough yet (NB - all data on companies financial performanceto pay a special attention to this region, though it is collected within this research is used for calculation ofstill IT-export-perspective center because of the high the cumulative export only and cannot be divulged).concentration of technical universities there. Traditionally, there is no open data on the turnovers The total declared revenue of all interrogated of foreign corporations research centers, whichcompanies was $1085 million and the export revenue provide cross-border software development services 5
  8. 8. Methodologyfor their parent companies. The assessment of the estimations. Experts took into account the availableturnover and aggregate income of such development data on the staff amount and structure, the resultscenters was performed based on the experts of interviews with corporations representatives and information of recruiting agencies, Distribution of the respondent companies depending on their aggregate income which fix mass increase or decrease in the personnel of such centers. 60% The results of the survey 58% 53% conducted by the Toy-Opinion JV 50% and RUSSOFT in February–April 2012 48% constitute the basic information 40% for this research. At the same time, 39% 39% a  considerable part of information 30% 31% about the situation in the industry 24% and in the various markets were 20% 20% 19% received from other sources. First, 15% we can mention ratings of reputable 13% 14% 10% 8% 7% 8% analytical agencies, research 5% companies reports, information from 0% Less than From $0.5 million From $4 million Over foreign and international software $0.5 million to $4 million to $20 million $20 million developers associations, publications 2008 2009 2010 2011 in Russian (mainly in CNews and Computerworld) and foreign mass media. In this research we also used opinions of experts, of heads of Distribution of the aggregate income of participating companies depending on their turnover recruiting agencies and of training centers, as well as information 80% received by experts directly during 70% 73% communications with the heads of 60% 64% 66% companies many of whom did not take part in the survey. 50% Starting this year, the new and 40% very important section is added to the survey. It is dedicated to the 30% existing and expected potential of 20% the Russian software companies in 17% 18% 20% 16% the world market due to the changes 10% 13% 1% 2% 1% 10% in the market and considering the 0% development of the situation in Less than From $0.5 million From $4 million Over Russia. $0.5 million to $4 million to $20 million $20 million After preparation of the research 2009 2010 2011 result report, experts (the heads of active members of the RUSSOFT Distribution of respondents by their export income share in the total revenue 60% 50% 52% 40% 39% 35% 34% 30% 28% 24% 23% 20% 21% 20.5% 19.5% 19% 19% 16% 16% 14% 15% 13% 13% 10% 12% 10% 10% 9% 7% 7% 4% 0% Less than 10% From 11% to 25% From 26% to 50% From 51% to 75% Over 75% 2007 2008 2009 2010 2011 6
  9. 9. MethodologyAssociation) checked the report and drawn Distribution of the respondent companiesconclusions. Besides, the experts commented on depending on their specializationsome discovered changes and tendencies. As the questionnaire sent to respondents changes 2010 2011 2012insignificantly and includes the same key indicatorsfor comparing companies data for several years, 22%it allows revealing tendencies and maintaining the 31% 50% 50%measurement process continuity. This is facilitated 69% 78%by engagement into the process of informationcollection and report revision of experts who are incharge of the leading RUSSOFT companies and who Developers of software products Servicehave been moral authority for the entire industry for and ready-to-use solutions companiesmany years. 7
  10. 10. Chapter 1. Positions of Russiain the global IT market
  11. 11. Chapter1. Positions of Russia in the Global IT MarketRUSSIA IN GLOBAL IT RATINGS In E-Government Survey 2012 ranking, Russia takes the 37th place by the index of online services Over the last year, the Russias place in the various development, the 30th place by the level of the ICT-ratings reflecting the level of development and usage infrastructure development and the 44th place by theof information technologies and also conditions human capital. All three indexes were improved.for business changed both for the worse and for The less significant increase took place in a similarthe better (slightly more often  — for the better). ranking of the International TelecommunicationAvailable changes as well as comparison with ratings Union (ITU) that reflects the level of the informationof other countries not always look reasonable. and communication technologies developmentIn  particular, Russias positions in the second half of in 152 countries. In two years, Russia moved upthe first hundred and sometimes outside this range from the 49th place to the 47th place. Thoughare doubtful. methods of the United Nations and the International Apparently, some experts who created these kind Telecommunication Union differ, one country shouldof ratings were mainly guided by publications in the not take the 27th place in one ranking and themass media that are not always objective owing to 47th place in another. Especially, as the ITU analyststhe preservation of stereotypes concerning Russia, put Russia on the 32nd place by the availability ofto maintaining political games and to creation ICT services that depend on the price level and theof an enemy image. However, this orientation as gross domestic product. In Russia, the ICT servicesa  rule is enforced because the Russian companies, access costs 1.1% from the gross national incomeuniversities and state structures not always aspire to (in  2008  —  1.3%). It can be assumed that the ITUprovide information that is absolutely necessary for experts did not have enough information aboutanalysts. usage of the ICT in Russia and about skills of Russians Therefore, not only the taken place but a sharp in that field.increase of the Russias position in some ratings to In the ICT report of the World Economic Forum,a greater degree can be explained not by the real Russia is entirely on the 56th place from 142 countries.progress in any field but by the change of character According to the comments made by the experts whoof information messages received from different created the rating, the methodology changed greatlychannels. For example, just in a year Russia flew up (now the index to a greater degree depends on anby 32 positions in the world rating of the Electronic assessment of the ICT impact on the competitiveness)government development (E-Government Survey and that comparison with the country position from2012: E-Government for the People) having risen the previous year does not make sense. Therefore,from the 59th to the 27th place. The United Nations the Russias rise from the 77th to the 56th placepublishes this rating, it reflects the readiness and the means nothing. Russia is ranked high by the adultfeasibility of the state agencies from 193 countries to population literacy rate (the 9th place) and theuse ICT to provide the state services. number of cellular subscribers (the 7th place), but Certainly, the Russian government made some the country is pulled down by the following criteria:decisions that contributed to the increased use of IT usage of new technologies by the companies (theand the Internet for the interaction between various 130th place), protection of intellectual property (thedepartments and the government institutions with 126th place), efficiency of the judicial system (thethe citizens. In particular, a united portal for the state 123 place), the impact of the ICT on the state policyservices was created. However, it is hard to say that it (the 94th), state online services (the 66th place).is already operating with the full functionality support. Apparently, problems attributed to Russia are slightlyMany services are not transformed to the electronic exaggerated, because, for example, other sourcesform yet. The works on the project are constantly (e.g., BSA) testify that the situation in the field of theperformed and there is a progress, but it cannot be intellectual property protection in Russia is better.so great in such a short term. In addition, in 2005–2011 Russia proved to be the In reality, Russia jumped from one category absolute world leader in the speed of decrease of theof the rating to another — from countries with SW piracy level. Therefore, the place at the end ofemerging economics to the economically developed the list does not look deserved.countries — in a year. Low places on the level of ICT development are Moreover, in this rating countries are ranged based badly agreed with the first places that traditionallyon the weighed index of estimates on three main are a priori given to Russia on the amount of spamcomponents (scale and quality of online services, level generated in the country, on the number of cyberof ICT-infrastructure development and human capital) attacks and computer viruses. This contradictionand it is hard to change them in a year to overtake is practically not taken into consideration thoughabout thirty countries. Apparently, this breakthrough obviously there should be relationship between theis caused by efforts on the E-government creation level of ICT development in the country and the levelthat were undertaken in Russia within several years, of technological capability of its inhabitants to createbut analysts got information about them and received malicious software. Unless, of course, you drawthe results no earlier than a year ago. the fantastic picture according to which almost all 9
  12. 12. Chapter1. Positions of Russia in the Global IT Marketcomputers and experts in Russia are involved in spam economic level of the city and the ICT maturity. In thesending, creating viruses and cyber attacks. calculation of the ICT maturity degree, the analysts It is remarkable that there is a general rule considered the following indicators: level of ICT-according to which Russias position is almost always infrastructure development, readiness and availabilityhigher in ratings which use only really measured of this infrastructure, and level of real technologiesparameters, than in ranking which use synthetic utilization.indicators for determining judgments of analysts. In the 2012 Global Cities Index (created by A.T.In this regard, it is worth to mention that Russia takes Kearney and The Chicago Council on Global Affairs)the 16th place among 224 countries by the average Moscow rose from the 25th to the 19th place forInternet data-downloading rate (according to Pando the last two years. In this rating, the megalopolisesNetworks). with the population over 1 million people were In the ranking of the IT industry competitiveness, considered as driving forces of the country and ofthe Russias position even worsened over the last year. the regional growth and as important elements ofAccording to analytical division of the British media the world economic system which have considerablegroup, The Economist (Economist Intelligence Unit) in impact on the big regions of the planet. Thetwo years time (this is the periodicity of the rating) position in the 2012 Global Cities Index dependsRussia fell from the 38th to the 46th place among 66 on the following five parameters: level of business,countries. The following reasons were given for this: level of the human capital, status of the informationa small number of the IT patents registered in the exchange (in particular, the quantity of the masscountry, the suppression of free competition by the media correspondent points of global value isstate and the insufficient funding of the IT industry. considered), cultural level of the population andThese problems exist, but there were no signs of its political weight.aggravation for the last two years. Most likely this The ranking of cities with the best options fordowngrade happened because the original data the software development outsourcing (The Topwere collected before the adoption of amendments 100 Outsourcing Cities) prepared by the Globalproviding the decrease in the social payments rates Services in 2011, includes the following four Russianfor the software developers. The rank in Economist cities: St.  Petersburg  — the 33rd place, Moscow  —Intelligence Unit rating is not consistent with the the 46th place, Nizhny Novgorod  — the 63rd place,rapid growth of the Russian software export and Novosibirsk — the 97th place. It should be noted thatwith the Russias leading position in world market of the representation of Russian cities in this rankingsoftware development services where the country is being currently increased as the experts thatis unambiguously conceding only to India and to prepared the ranking are getting more informationthe USA. about Russia. Low positions in rankings of the IT industry The Russian higher education institutions not onlycompetitiveness are largely due to the fact that almost never get to the top 100 in the rankings ofRussian companies exporting software still do not universities, but also in general are extremely rareadvertize their belonging to Russia, effecting sales mentioned there. The main reason is that they dofrom their sales offices — local taxpayers. not cooperate with the rating agencies and their Russia is far from the leaders in the Global professors do not send articles to authoritativeInnovative Index (prepared by INSEAD and WIPO scientific magazines. The president of the Russianbusiness school with the support of partners from Federation set the task to raise five Russian higherthe Alcatel-Lucent project, Booz & Company and education institutions into the top 100 of theConfederation of the Indian industry). It took the 51th world universities. Taking into account that theplace in the list of 141 countries. The indicator of the first required measure is to provide additionallast year  — the 56th place but in a year the criteria information to the analysts, it looks quite feasible inof innovations definition were extended. In 2012, the next years.the innovations in social sphere and business models In the rankings on the corruption level thewere added to the number of R&D laboratories and Russias positions are, on the contrary, influencedthe published scientific articles. by the surplus of information (purposely negative The Russias position in the indexes of and in many respects distorted). Nobody denies thiscompetitiveness for all industries is also low, as a rule. problem (even the country leaders), but the 143rdFor example, IMD, a Swiss business school put Russia place among 183 countries according to Transparencyto the 48th place (from 59 countries) for this index. International looks unrealistic. With this level of At the same time, the largest Russian cities are corruption that is attributed by analysts to the countryrather high in different lists. For example, in the as well as to its largest cities, Russia could not takeworld rating Networked Society City Index made a place higher than 40–50 in any rankings. It seemsby Ericsson and the Arthur D. Little British analytical that Transparency International started to correct thisagency, Moscow rose from the 12th to the 11th place. obvious discrepancy, because in a year Russia roseThis rating is based on the analysts conclusions that at once by 11 steps in the ranking prepared by thisthere is a relationship between the social and the organization (last year it was on the 154th place). 10
  13. 13. Chapter1. Positions of Russia in the Global IT MarketACHIEVEMENTS OF INDIVIDUAL Industry-Specific Services (Luxoft), Best 10 CompaniesRUSSIAN COMPANIES IN THE in Eastern Europe (EPAM Systems, Luxoft) Best 10 Companies with Employees in Eastern EuropeWORLD RATINGS (Artezio, EPAM Systems, Luxoft), Top Climbers from Year to Year (EPAM Systems, Luxoft). The majority of the leading Russian software Global Services and IAOP separately determineexporters still do not seek to be present at various hi- the best service companies by a number of indicatorstech company ratings created by globally authoritative that reflect the company size (number of staff,analyst teams. The main reason is unwillingness to consolidated revenues, number of developmentdisclose their turnover and profit data so that it would centers). A few Russian companies are included intonot become widely known in our country. Besides, the the corresponding additional ratings, but they are onproduct companies most often do not want to point the first positions only among the developers fromto their Russian origin as they introduce themselves in Eastern Europe (almost all largest East Europeanthe corresponding markets as local resident companies companies are located in Russia, Belarus and(in order to use the status of the “national producers”). Ukraine). Only Luxoft and EPAM Systems are noted byThere are also some fears that the Russian affiliation will analysts as global companies (according to the globalnot promote their successful operation in some foreign standards they belong to the class of medium-sizemarkets in connection with the prejudiced attitude enterprises). At the same time, a number of Russiantowards Russia (in Europe and the USA mostly). companies are quickly increasing their staff and Due to the specified reasons and because of the consolidated revenues which can bring them to a newinformation disclosure limitations, the positions of qualitative level in the near future.Russian companies in a number of ratings are muchlower than it may be expected from the actual The 2012 Global Services 100situation. First of all, it concerns the ratings whichassume providing of financial statements verified by According to the Global Services, Russianauditors as ranking is made by the turnover (or by its representation in the top-100 best outsourcinggrowth) indicators. sevice providers has not considerably changed in Russian service companies have a very different comparison to the last year. It included 7 companiesattitude towards the participation in the international from Russia: Auriga, DataArt, EPAM Systems, First Lineratings. Among the leading ratings we can note two Software, Luxoft, MERA and Reksoft. The First Lineversions of the Top-100 IT Outsourcing companies Software appeared in the Global Services rating forglobal ratings: Global Services and IAOP (International the first time.Association of Outsourcing Professionals). In these Only the USA and India have more companiesratings (which are mainly based on the quality of in this rating. It is important to notice that Russia isrendered services, rather than on the company size) represented in these ratings only by IT companiesa significant number of companies represent Russia which offer outsourcing services in software(only India and the USA have more companies in the development and software engineering. Those whoratings). Currently, the number of Russian software are engaged in business process outsourcing (BPO)development service providers in the Global Services generally offer their services only within their countryand IAOP ratings looks as high as possible and it and have no pretensions to international markets.may hardly be increased via better information Therefore, the Russian companies share amongtransparency in other Russian companies. the IT service providers in the Global Services 100 The Global Services and IAOP analysts not only (without BPO segment) in fact turns out to be muchidentify the global top-100 leading outsourcing higher than 8%.companies but also define the best ones in various It is worth mentioning that the Global Servicesnominations that allows judging the more important 100 rating also included the following fivestrengths of the Russian software developers. companies from Ukraine and Belarus: IBA Group, Companies that have their main development SaM Solutions, SoftServe, Intetics and Itransition.centers in Russia are noted as the world leaders All three countries are culturally and economicallyor rising stars in the following categories: Product very close to each other, so we can quite reasonablyEngineering (EPAM Systems, MERA, and Luxoft), mention them altogether as a so-called "Russian-Software/Hardware (EPAM Systems, Auriga, Reksoft, speaking community" of the IT-service providers. TheFirst Line Software), Information and Communication strengths of the companies from these three statesTechnology Services (Luxoft, EPAM Systems, Reksoft, are approximately identical. They comprise mainlyArtezio, Auriga, First Line Software), Entertainment high quality of education in the field of physics and& Media (EPAM Systems, MERA, First Line Software), mathematical sciences, creativity and experience inAutomotive (Luxoft), Financial Services (Artezio), performing complex projects.Health Care (Artezio, Auriga), Government (First In the Global Services 100 rating Russian companiesLine Software), Research & Development Services are noted among the best in 7 following additional(Luxoft, MERA, Artezio, Auriga, First Line Software), nominations: Mid-Tier Leaders-Testing Services 11
  14. 14. Chapter1. Positions of Russia in the Global IT Market(EPAM Systems and Luxoft are among 8  companies Top 100 Worldwide Packaged Softwarenoted in this nomination), Leaders-Mid-tier ProductDevelopment (Luxoft is among 7  companies), Most likely this rating will not appear by the resultsLeaders-Global Product Development (EPAM of 2011. Last year, according to the IDC researchSystems is among 9 companies), Leaders-Mid-market company report, Kaspersky Lab took the secondEnterprise Applications Deployment (EPAM Systems is place by revenue growth rates in the TOP-100 largestamong 9 companies), Top Mid-tier ADM Companies packaged software suppliers rating in 2010.(EPAM Systems is among 11), Specialty ADM Vendors(DataArt, Reksoft are among 10  companies), Deloitte Technology Fast 500 EMEAEmerging Mid-Tier Global ADM Leaders (MERA isamong 10 companies). According to Deloitte, the representation of Russian companies among 500 most fast-growing The 2012 Global Outsourcing 100 high-technology companies in the EMEA region varies because of a number of random factors. IAOP included only 5 companies representing They are mainly related to the fact that companiesRussia in the list of Top-100, but the rating of this management would not like to provide analysts withorganization covers a wider range of outsourcing the audited financial statements. As the Russian hi-directions. The Russian export companies do not tech enterprises are not obliged by the state to openparticipate in some of these directions which are their financial data, their managers are often notnot connected to HighTech in IT. Therefore the willing to provide this information. Russia holds therepresentation comprising 5 companies (Artezio, 14th-16th place in the Deloitte Technology Fast 500Auriga, EPAM Systems, First Line Software and Luxoft) EMEA rating, although it is expected to be amongcan be considered rather high. Besides, it increased in the leaders by the number of fast-growing hi-techcomparison to the previous year similar rating (in 2011 companies.only 3 companies from Russia were included there). Nevertheless, we can note that Russian positions Some development companies only appeared in in this rating extended from one to 4 companies inthe additional IAOP ratings, but sometimes that is more comparison to the last year. The ER-Telecom companyimportant for them than to be included in the Top-100 took the 11th place in the rating (its earnings gain(where they may not be always correctly compared to reached 6858% for 5 years), Kaspersky Lab  —each other). In individual nominations analysts marked the 185th place (864%), Rosservice — the 268th placeout two more custom software developers (MERA (623%), Center of Financial Technologies — the 493rdand Reksoft) among Russian companies which were place (317.3%). Among them, only Kaspersky Laboutside the Top-100 of this rating. provided the rapid growth by successful promotion Thus, 7 representatives of Russia were included in of their solutions and services in the foreign markets.each of both ratings (IAOP rating and The 2012 Global Many other Russian software exporters promptlyOutsourcing). According to experts, the increase in the increased their income for the last 5 years, but theynumber of companies in these ratings confirms that did not provide Deloitte analysts with the financialRussian companies have added good understanding statements.of market and the ability to satisfy customers to theirwell known highest technological level. Software 500 Except Russia, neighboring Ukraine and Belarus(IBA Group, Intetics, Itransition, SoftServe, SaM As Russian companies are not willing to provideSolutions companies) also achieved the wide analysts with necessary information, very few of themrepresentation in the IAOP global rating. appear in the Software 500 list of the largest software companies (according to Software Magazine). In the The Black Book of Outsourcing recent years, only two Russian software companies have been present in this rating: following the results The new version of this rating created by of 2011, Luxoft took the 188th place with the turnoverDatamonitor was not published yet by the time of the of $206.2 million, Artezio  — the 462nd place. EPAMpresent report edition. In the previous 2 years Auriga Systems, which also represents Russia (based on thewas the only Russian company that appeared in the location of its largest development center) takes theTop-50 of the world leading IT service providers. 181st place in the Software 500.It outstripped Xerox, Microsoft, SAP, Fujitsu, andOracle corporations which were also classified as Global 100 Software Leadersservice companies by the rating authors. In addition,Datamonitor analysts recognized Auriga as the The Pierre Audoin Consultants (French analystsoftware engineering service provider N 1 in the company) placed Kaspersky Lab on the 68th positionworld in 2011. In this nomination, the Russian service in the list of the Top-100 worlds largest softwareprovider was ahead of such companies as IBM, Dell, companies (by the revenue received from softwareHP, HCL, Wipro and Siemens. sales in 2010). Among European companies, 12
  15. 15. Chapter1. Positions of Russia in the Global IT MarketKaspersky Lab takes the 7th place. In Europe "1C" telecommunications and CRM markets. STC presentedand Jet Infosystems are also among 100 largest Smart Logger II (the automatic system to monitor thecompanies. quality of call center operators work) for the TMC contest of products and solutions. FinTech 100 The US police will use the equipment produced by Simicon, a Russian developer of equipment for road In 2010 and 2011, Luxoft was included into the safety and speed control systems.FinTech 100 rating of the leading world providers of According to the comScore research, in Septembertechnologies and services for the financial industry. 2011, Yandex moved up to the fifth place among all world search engines by the number of processed Other Achievements requests. of Russian Software Developers RUSSIAN ICT MARKET In 2010 the FineReader Express Edition for Macsolution of ABBYY won the main prize in the "Best After the World crisis the Russian IT marketprofessional software" category according to the renewed its rapid growth in 2010 and continuedMacworld British magazine version. to grow in 2011. That growth has already led to PCMAG.COM magazine editors recognized the significant achievements. First of all, in 2011 theParagon Hard Disk Manager Suite 2011 solution of volume of the Russian IT-market has exceeded theParagon as the best product among all hard disk pre-crisis level of 2008. Second, in 2011 Russia got themanagement programs. first place by the number of Internet users in Europe The combined virtualization platform share of (according to comScore) and by the number ofParallels constituted more than 54% of the world imported PCs in the EMEA region (IDC). In addition,virtual infrastructure lease market in 2010. analysts began to talk of oncoming saturation National Outsourcing Association recognized in the Russian computer market that testifies toLuxoft as the “Outsourcing Service Provider of the the achievement of the economically developedYear 2011”, additionally the company’s Poland- countries computerization level.based Development Center was honored with the There are several indicators which prove that theOutsourcing Destination of the Year award. Also lag between Russia and the front-runners does notLuxoft has been awarded Frost & Sullivan 2011 look insuperable any more. If the growth rates keepEuropean Telematics and Infotainment Competitive at the same level, the gap can be overcome withinStrategy Innovation Award and “Best Banking the next several years. First, it concerns the number ofTechnology Company in Eastern Europe” by World Internet users. By their total number, Russia not onlyFinance Magazine. Luxoft is the only Eastern became the leader in Europe, but also moved up toEuropean provider included in Everest’s PEAK the 5th place in the world (according to comScore).Matrix for Large Banking Applications Outsourcing By the population and the gross domestic product,Relationships and is featured in Zinnov`s 2011 R&D the country is at a lower position. In Russia there areService Providers Rating. 3.6% of all Internet users in the world (while less than The Business Week magazine called DataArt one of 2% of all globe population lives in the country!). Bythe best developing outsourcing companies in the world. the number of broadband Internet users, our position The i-Free company became a prize-winner of the is not much worse — the 6th or the 7th place in theLG Apps Contest, which was organized by the LG world (according to Json & Partners Consulting andElectronics corporation: the i-Social TV application Broadband-Forum.org, respectively).created by i-Free took the second place in the By the average data-downloading rate, Russiacontest. takes the 16th place among 224 countries of the world PROGNOZ has a serious advance in the business (according to Pando Networks). Thus, the averageintelligence (BI) segment — in 2011 it first appeared Internet access rate in the Russian regions increasedin the Gartner "magic square" among the BI world by 156% last year and by 50%  — in Moscow andleaders. St. Petersburg (Yandex). At such growth rates, in a year The GoodReader iOS application created by Yury Russia can become one of the 10 world leaders by theSelyukov (Russian amateur programmer) is in a great indicators that do not depend on the country size (thedemand among American military customers and Internet access rate and the downloading rate).officials. The requirement for the support of working By the Internet connectivity Moscow andwith his application for iPad appeared in the U.S. Air St. Petersburg already correspond to the level of theForce tender documentation. cutting-edge countries (68% and 71% respectively) Speech Technology Center (STC) is the ever and regions quickly come nearer to both Russianfirst Russian company which got the award for capitals. The Information Society state program willdevelopment of their products from TMC (Technology promote the reduction of the lag thus subsidies forMarketing Corporation), which is one of the largest co-financing the regional IT projects to eliminatemedia holdings in North America oriented towards digital divide in Russia are supposed to be allocated 13
  16. 16. Chapter1. Positions of Russia in the Global IT Marketsince 2012. The total amount of financing for 2012 According to the survey of the Ipsos analyticalwill reach 670 million rubles (more than $22 million), company, which was carried out under the Reutersand until the Information Society program request, Russians are the world leaders among thecompletion in 2020 – 6.76 billion rubles (more than VoIP technology users (36% of respondents used it at$220 million). least once for the last three months). Basic figures characterizing the Russian ICT market in 2011 Drop (-)/Growth (+) Indicator 2011 following the results Source of 2011 $29 billion +21% IDC $21 billion +22% PMR (632 billion rubles) Russian IT market volume Ministry of Telecom and $21,6 billion +14,6% Mass Communications $26 billion +13,3% Discovery Research Group (781 billion rubles) Ministry of Telecom and Income from communication services 1.425 trillion rubles +5,1% Mass Communications Ministry of Telecom and Capital investments in the communication industry 259 billion rubles +35,2% Mass Communications Equipment deliveries $18 billion IDC (computers of all types, tablet PCs, and smart phones) 12.9 million pieces Computer deliveries to Russia +13,4% (4.46 million pieces, IDC (desktops, laptops) (2,2%, +20,4%) 8.44 million pieces ) Cumulative sales in the Russian computer market (including monitors, +37% Gfk webcams, keyboards, tablets, and UPS, in addition to computers) Individual segments of the Russian IT market Drop (-)/Growth (+) Indicator 2011 following the results Source of 2011 34.5 billion rubles +35% TAdviser analytical center Market of business analysis (BI) systems $800 million — IDC 250 million dollars Sales of standard architecture servers (number of pieces) (52.7 thousand) +26,4% IDC Russia Quarterly Server Tracker For the 4th quarter 95 million dollars Sales of heavy servers +30% IDC Russia Quarterly Server Tracker For the 4th quarter Anti-Malware.ru information Volume of the Russian information security market $334.6 million +23,1% and analytical center Volume of the IaaS market 380 million rubles Json & Partners Consulting 60,980 sq. m. Total usable area of the Russian commercial data centers +60% Json & Partners Consulting (at the end of 2011) 152 million dollars Sales results of the DSS manufacturers +64,5% IDC (in the fourth quarter) Total capacity of purchased external DSS 72.5 thousand TByte +145% IDC Volume of the Russian engineering software market $162 million +23,8% IDC Deliveries of printers, copiers, $940.9 million +1.4% (+0,8%) IDC and multifunctional devices to Russia (4.2 million pieces) IT services (system integration, consulting, etc.) $5.8 billion IDC Sales of software $3.4 billion IDC Production of devices and equipment Restko Holdings Analytical Depart- 23 billion rubles +35% for the automatic regulation or control ment 14
  17. 17. Chapter1. Positions of Russia in the Global IT Market Following the results of 2011, Russia moved up EU is equal to 69%. The corresponding differenceto a rather high 27th place from 193 countries in by Internet connectivity is between 56% and 68%the UN rating on the level of electronic government respectively. This gap may be extirpated withindevelopment, having overtaken Ireland, Italy, Greece, 3 years if the growth rates in Russia and the EU remainLithuania, Poland and some other countries. In the at the same level.previous similar rating it had the 59th place only. At the same time, according to the report of According to the results of the "Role of ICT the World Economic Forum on the countries ICTcompetences in Social and Economic Development development, Russia is on the 56th place that doesof Russia" research which was carried out by the not look sufficiently reasonable considering a greatInstitute of Information Society Development (IISD) number of other comparative indicators (including theand the Microsoft Corporation, the level of Russians vendors estimates of the ICT market development).ICT competences falls behind the average European Most likely the countrys position should befigures but this gap is being promptly reduced. For significantly higher (by 10–15 places) following theexample, since 2008 the difference in shares of the results of 2012. Especially if the Russian IT marketInternet users of all population in Russia and in the continues to grow quickly.countries of the European Union (EU) was reduced According to various estimates, from 2010 to 2011more than twice. 58% of inhabitants of Russia use its volume increased from $21 bln to $29 bln with ancomputer at least once a week, and this figure in annual growth of 13–22%. Judging by sound results in Use in Russia of Internet-technologies in 2009–2010 Indicator Penetration Indicator Time Absolute value Source change indicator Internet connectivity At the end of 2011 44% The World Bank, ITU 57,8 million users St. Petersburg Interna- Number of Internet users, monthly (daily) At the end of 2011 (44,3 million users) tional Economic Forum +18% (in com- Number of Internet users aged 15 and March, 2012 56 million people parison with comScore older April, 2011) 21.7 million households (about Number of wired broadband Internet J’son & Partners End of 2011 1.5% of them are 39% subscribers over 12 years Consulting connected over PON) +20% (in com- Number of unique users who watch video 47,4 million December, 2011 parison with ComScore in the Runet subscribers March, 2011) Expenses for online purchases in Russia End of 2011 244,6 billion rubles InSales company Russian Index of Target Number of Russians who do online 6,1 million End of 2011 +16,5% Groups, the Synovate shopping subscribers Comcon research Share of Russian Internet users registered All-Russian Public Opinion End of 2011 +50% 82% in social networks Research Center Average Internet access rate in the +156% End of 2011 Yandex regions (in Moscow and St. Petersburg) (+50%) Average cost of Internet access in the 145 rbl./Mbps -60% End of 2011 Yandex regions (in Russia as a whole) per month (43%) Internet connectivity level in Moscow 68% and 71% Yandex, Public Opinion Autumn 2011 54.5 million people +17% and St. Petersburg (in the regions) respectively (44%) Foundation Volume of the Russian social game End of 2011 6,962 billion rubles +171% Mail.Ru Games report market Number of households with the fixed Json & Partners End of 2011 21.7 million +18% 38% broadband Internet access Consulting Providers revenues from the broadband End of 2011 71,8 billion rubles Json & Partners Internet access services for individuals (forecast for 2012) (81.2 billion rubles) Consulting Volume of the Russian online Interactive Advertising End of 2011 1.12 billion euros +55,5% advertizing market Bureau St. Petersburg Interna- E-commerce End of 2011 320 billion rubles +30% tional Economic Forum Russian Association Internet economy volume 750–850 billion End of 2011 for Electronic (the share in the GDP) rubles (1.4–1.7%) Communications 15
  18. 18. Chapter1. Positions of Russia in the Global IT Market Russian market of cellular communication and mobile phones Indicator Time Absolute value Change Source 8.7 million pieces or 21.2% of Deliveries of smart phones to Russia 2011 IDC overall mobile phone market Number of mobile phones sold 40 million 2011 Euroset (the share of smart phones) Forecast (15%) 40.5 million pieces +16% Volume of the mobile phone market 2011 MTS (174.8 billion rubles) (+12%) Volume of the smart phones market 7.7 million pieces over 100% 2011 (the share of all mobile phones — 19%) (83.3 billion rubles) (+80%)some separate segments, the maximum value of the ($100 million). Now, it slightly exceeds $10 million.IT-market looks the most realistic. It can be reasonably Considering the ratio of the IT expenditure versusassumed that the IT market volume was not less than the GDP in Russia and in the economically developed$29 billion in 2011 (data from IDC) that is 16% more countries (1.5% against 4%) the Russian IT market canthan in the pre-crisis 2008. still grow 2–2.5 times. This increase may be reached Analysts consider that the IT market growth within 4 years with an annual growth approximately ofrate will remain at a rather high level in the next 20% which looks quite realistic. The saturation in theyears, although there are some preconditions of its IT market will be visible in the short term but there arereduction because of the market saturation. First, the few more years of rather rapid growth ahead.saturation is expected in the market of computers as In the market of telecommunication services, thethe vast majority of Russians (excluding elderly people saturation has been already reached. Its growth doesand very young children) already has computers. In not exceed 10% for several years and there are no2011 and at the beginning of 2012 there have been preconditions for acceleration (especially, consideringstill noticed many purchases of the first computer the reduction in the cost of these services). However,(such purchases are the market driver). But judging this growth rate is rather high compared to the Westby the characteristics of sold PCs that was the last European countries.segment of population to be covered. They did not According to the Ministry of Telecom and Massthink of acquiring a laptop or a desktop PC until Communications of the Russian Federation, the totalrecently and do not fully understand why these income from telecommunication services was 1.425devices are necessary to them. After the saturation trillion rubles ($47 billion) in 2011; that is 5.1% moreof this buyers segment, the infants will be the only than in 2010. However, the capital investments in theuncovered category. telecommunication industry increased by 35.2% up According to the IDC forecast, the Russian IT to 259 billion rubles ($8.6 billion). In the first quartermarket will increase by 14% in 2012 and will reach of 2012, the growth of the communication service$33 billion. Judging by the 2012 first quarter data the market slightly increased and was equal 9%.growth in 2012 would probably exceed the predicted The ICT market share in the GDP remained at the14%. According to IDC, during the first three months level of 4% in 2011 and is the same as by the resultsof the year sales of computers increased by 33.4% of 2010.and sales of servers — by 23.6%. In the market of telecommunication services the It is expected that following the results of the absolute saturation by the number of mobile phoneentire year the volume of the Russian engineering users has been reached. During this year, for the firstsoftware market will increase by 18%. time the subscriber base of all leading Russian mobile The Gfk estimates of the Russian computer market operators was reduced.growth rate for the first quarter of 2012 are much The growth rate of the mobile phone market inlower  —  8%. The essential discrepancy with the IDC 2010 decreased due to the lack of new subscriberdata can be explained by different methodologies inflow and to the reduction in the cost of devices.used by analysts. In 2011 it increased by 12%. Thus, the growth was Concerning the next years the IDC forecasts show generally reached due to sales of smart phones whicha decrease in growth rates. The company assumes were purchased to replace traditional devices. Salesthat until 2015 the IT expenditure in Russia will grow of smart phones increased by  80%. The relevantby 11.6% on the average and will reach $41.1 billion. growth rate remains the same following the results ofAt the same time separate segments will show more 1H 2012.essential growth. For example, Json & Partners In 2011, the Russian market of mobile phonesConsulting experts consider that in the next three reached the level of the pre-crisis 2008 in terms ofyears the growth rates of the Russian cloud IaaS numbers, but did not reach it in the money terms.service market will be about 150–250% per year, and The prospects of the cellular telecommunicationthe total market size will be about 3 billion rubles market are in many respects connected with the 16
  19. 19. Chapter1. Positions of Russia in the Global IT Marketincrease in demand for the mobile Internet. According in demand for the mobile Internet will be promotedto the Ericsson forecast, by 2020 the mobile traffic by the 4G networks creation (LTE). The first networkin Russia will increase 25 times. At the beginning of of this type was launched in Novosibirsk at the end2012 the mobile Internet audience (according to TNS) of 2011. The frequency ranges for these networks inwas 22% of inhabitants in large cities. The increase other cities have been already allocated. 17
  20. 20. Chapter 2. Volume and Structureof Russian Software Export

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