Russia to Cash In on IT Growth
The Russian information technology industry saw rapid growth last year and Russia is well positioned to become a global leader in IT.
Jul 06, 2004
The Russian information technology industry saw rapid growth last year and Russia is well positioned to become a global leader in IT, industry leaders say.
"The market experienced very rapid growth last year with over 50 percent growth in some segments," said Anatoly Karachinksy, president and CEO of industry leader Information Business Systems Group (IBS).
The industry as a whole has grown 30-40 percent over the past three years according to Valentin Makarov, president of Fort-Ross Information Technology Services, a consortium of software developing companies in Russia, Ukraine and Belorus.
Systems integration saw a 35-40 percent rise, the infrastructure market went up by 30 percent, the computer manufacturing and assembly sphere rose by 20-25 percent and the software development market grew 40 percent, Karachinsky said.
"We experienced a huge interest toward Russia and Russia is very well positioned geopolitically," Karachinsky said. "There are projections for stability, for economic growth in Russia."
Over the last two years Russia "became the absolute European leader in implementing the highest level of certification," Makarov said. "None of Europe can compete."
Luxoft, a subsidiary of IBS, was awarded the highest possible certificate recognizing software development.
"Only nineteen companies in the world have this level of certification," Karachinsky said.
Additionally, Russia became the global leader in IT training programs, "which means our higher schools [of education] are the best in the world," Makarov said.
The internal Russian IT market is growing more than 10 percent annually, Makarov said, with an overall 24 percent increase in the IT market as a whole last year.
"More business means better quality of our work," Makarov said.
The Russian government has taken notice of the exponential growth and recognized Russia's potential in the industry, experts said, although they are still crying for more governmental support.
The government itself is working on developing its use of IT internally and has reorganized itself to better handle the growing IT field, experts said.
Formerly known as the Ministry of Communications and Information, the ministry has been renamed and reorganized as the Ministry of Information Technology and Communications.
"The government now realizes it's a very fast-growing, innovative industry," Makarov said.
One reason for Russia's potential IT success is its geopolitical position, Karachinsky said.
Russia's main competitors in the industry are India and China, with India dominating 20 percent of the market share. Russia and China tie for second place, with one percent each.
But where both India and China are viewed respectively as unstable politically and geographically, Russia is a vessel of stability, Karachinsky said.
"There are many aspects in India and China that are unpredictable in different combinations," he said.
"If you look at China, there is a big conflict between the form and the context because their form is communistic, but they are a capitalistic country in every essence.
"And India is very unlucky in its geographic position right now," Karachinksy said, citing the instability in the region with Iraq and Kashmir.
It is unlikely, however, that Russia will overtake or equal India's dominating position for one main reason.
"It is impossible because India has 1 billion people and the English language is widely spread there. So obviously it will always be easier to find people for very cheap work in India and as time progresses, it will be more and more difficult to do that in Russia," Karachinsky said.
However, Russia's future is concentrated in dealing with the industry's complex issues, he said.
"The education level in Russia is much higher, so obviously it will be easier to find specialists who can handle difficult problems and solve complex issues."
Other experts say Russia's future also looks bright on the simple side of the industry that focuses not on technology f
"The market experienced very rapid growth last year with over 50 percent growth in some segments," said Anatoly Karachinksy, president and CEO of industry leader Information Business Systems Group (IBS).
The industry as a whole has grown 30-40 percent over the past three years according to Valentin Makarov, president of Fort-Ross Information Technology Services, a consortium of software developing companies in Russia, Ukraine and Belorus.
Systems integration saw a 35-40 percent rise, the infrastructure market went up by 30 percent, the computer manufacturing and assembly sphere rose by 20-25 percent and the software development market grew 40 percent, Karachinsky said.
"We experienced a huge interest toward Russia and Russia is very well positioned geopolitically," Karachinsky said. "There are projections for stability, for economic growth in Russia."
Over the last two years Russia "became the absolute European leader in implementing the highest level of certification," Makarov said. "None of Europe can compete."
Luxoft, a subsidiary of IBS, was awarded the highest possible certificate recognizing software development.
"Only nineteen companies in the world have this level of certification," Karachinsky said.
Additionally, Russia became the global leader in IT training programs, "which means our higher schools [of education] are the best in the world," Makarov said.
The internal Russian IT market is growing more than 10 percent annually, Makarov said, with an overall 24 percent increase in the IT market as a whole last year.
"More business means better quality of our work," Makarov said.
The Russian government has taken notice of the exponential growth and recognized Russia's potential in the industry, experts said, although they are still crying for more governmental support.
The government itself is working on developing its use of IT internally and has reorganized itself to better handle the growing IT field, experts said.
Formerly known as the Ministry of Communications and Information, the ministry has been renamed and reorganized as the Ministry of Information Technology and Communications.
"The government now realizes it's a very fast-growing, innovative industry," Makarov said.
One reason for Russia's potential IT success is its geopolitical position, Karachinsky said.
Russia's main competitors in the industry are India and China, with India dominating 20 percent of the market share. Russia and China tie for second place, with one percent each.
But where both India and China are viewed respectively as unstable politically and geographically, Russia is a vessel of stability, Karachinsky said.
"There are many aspects in India and China that are unpredictable in different combinations," he said.
"If you look at China, there is a big conflict between the form and the context because their form is communistic, but they are a capitalistic country in every essence.
"And India is very unlucky in its geographic position right now," Karachinksy said, citing the instability in the region with Iraq and Kashmir.
It is unlikely, however, that Russia will overtake or equal India's dominating position for one main reason.
"It is impossible because India has 1 billion people and the English language is widely spread there. So obviously it will always be easier to find people for very cheap work in India and as time progresses, it will be more and more difficult to do that in Russia," Karachinsky said.
However, Russia's future is concentrated in dealing with the industry's complex issues, he said.
"The education level in Russia is much higher, so obviously it will be easier to find specialists who can handle difficult problems and solve complex issues."
Other experts say Russia's future also looks bright on the simple side of the industry that focuses not on technology f