The Latest Aberdeen Group Research of Russian Software Development Industry was First Announced at Software Outsourcing Summit 2003
Jul 07, 2003
The recently completed report by the Aberdeen Group "Software Development in Russia: A Buyer's Guide to the Russian Software Development and Services Export Industry" was introduced at the Software Outsourcing Summit in St. Petersburg last week. At the press conference hold by RUSSOFT on June 27th, Daniel Satinsky, President of the Board, US-Russia Chamber of Commerce of New England, speaking on behalf of the author of the report Stephen Lane presented the key findings of the report and added his own personal comments on the further perspectives of Russia's software services exports industry.
The Aberdeen report, sponsored by a number of RUSSOFT members, was based on interviews with over 50 American and European customers who have already been working actively with Russian software services providers. "This representative sample allowed Aberdeen to present a statistically valid profile of customers expectations. It should be noted that this is the first ever study of the Russian software industry from the customer's perspective." - commented Mr. Lane.
Mr. Satinsky underlined the following key conclusions of the report.
1. In comparison to the types of tasks outsourced to other countries, more core functions are outsourced to Russia.
"The report shows that the percentage of the problem-solving projects trusted to Russian providers are significantly higher if compared to alternative locations." - said Mr. Satinsky. "Our survey showed that a number of software vendors and other IT companies - the largest users of Russian IT resources - are doing a core product development in this country or contracting such work to Russian service providers." - commented the author of the report, Stephen Lane, in the official press-release.
2. Mid-size industrial enterprises could become a major growing point for Russian software services market.
The study sample presents a combination of large and small company customers. The sector of mid-size enterprises, with turnover between 0,5 - 1 billion USD is not represented at all. "The sector of mid-size enterprises that are not business units of multinational corporations are not typically served by global outsourcers like EDS and IBM or by largest offshore vendors with global reach. That is why this market sector should present good prospects for Russian companies with the appropriate skills and market presence to pursue them. " - Explained Mr. Satinsky. Some 67% of the customer sample in the report consisted of IT companies, indicating further growth potential through cooperation with foreign partners in this industry sector."
3. Market niche for the Russian software services is high-quality programming.
"Major customers interviewed were attracted by opportunity to access technical quality - in terms of mathematical capabilities, experience with complex projects, creativity in solving difficult problems and by relatively low costs. It is not just access to low cost labor that brings customers to some other offshore locations: Russian vendors provide high-level programming and the same level of IT experts as in the US but at relatively low costs." - said Mr. Lane. As he further stressed in the report: "Users are attracted to the country's combination of a large, highly-skilled science, math and engineering talent pool, and its comparatively low labor costs".
4. Another important finding is that offshore vendor selection is not about the country, it is about the company.
"For major customers country is of low consideration in a vendor selection process" - said Mr. Satinsky, citing the report. "Companies contract with other companies, not countries and in the best circumstances, the offshore part becomes transparent as business people learn how to collaborate across cultures and time zones" - commented the report author, Stephen Lane".
One of the most important findings of the report is the high-level of satisfaction of customers that have been working with Russian services providers on significant projects. Over 85% of the interview participants indicated their satisfaction with the high quality of services and technical skills. The only complaints referred to some shortcoming of business relationship management experience of some providers. "The prospects of Russian software services market will be shaped - for the most part - by the ability of software vendors to build strong, transparent and well-managed business relations" - stressed Mr. Lane.
The full text of the report is available at Aberdeen Group's site
About RUSSOFT
National Software Development Association RUSSOFT unites more than 50 leading companies in the field of Software Development from Russia and Belarus.
In 2002 total export turnover of RUSSOFT's members was about $150 million, which is about 50% of export turnover of a whole software development industry of Russia. According to Gartner Group's forecasts, this sector of Russian economy will grow annually more than 50%, finalizing with the growth between 2000 and 2003 as big as 277%.
RUSSOFT member companies have provided the leadership that built the Russian software development industry over the last ten years. Today the industry utilizes Quality Assurance techniques based on former Defense Industry Standards and on the international CMM and ISO 9000/2000 standards. The companies also utilize sophisticated Project Management tools for distributed projects, which are based on internationally accepted tools such as Rational Rose, and modern managerial technologies such as Agile Programming.
www.russoft.org
About Aberdeen Group
Founded in 1988, Aberdeen Group is a leading IT market analysis and positioning services firm that helps Information Technology vendors establish leadership in emerging markets. The firm provides IT market intelligence, positioning, and market acceleration services to establish and start-up technology companies.
Aberdeen's consultants provide up-to-the-minute global IT market insights in more than 25 IT market segments. Research practices focus on emerging market opportunities, market growth rates, important industry trends, and customer buying patterns. The firm also helps clients to identify new market opportunities, enter those markets successfully, and accelerate the adoption of new technologies. Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California; Fort Collins, Colorado; and Amsterdam, the Netherlands. Aberdeen is accessible via the Web at www.aberdeen.com.
The Aberdeen report, sponsored by a number of RUSSOFT members, was based on interviews with over 50 American and European customers who have already been working actively with Russian software services providers. "This representative sample allowed Aberdeen to present a statistically valid profile of customers expectations. It should be noted that this is the first ever study of the Russian software industry from the customer's perspective." - commented Mr. Lane.
Mr. Satinsky underlined the following key conclusions of the report.
1. In comparison to the types of tasks outsourced to other countries, more core functions are outsourced to Russia.
"The report shows that the percentage of the problem-solving projects trusted to Russian providers are significantly higher if compared to alternative locations." - said Mr. Satinsky. "Our survey showed that a number of software vendors and other IT companies - the largest users of Russian IT resources - are doing a core product development in this country or contracting such work to Russian service providers." - commented the author of the report, Stephen Lane, in the official press-release.
2. Mid-size industrial enterprises could become a major growing point for Russian software services market.
The study sample presents a combination of large and small company customers. The sector of mid-size enterprises, with turnover between 0,5 - 1 billion USD is not represented at all. "The sector of mid-size enterprises that are not business units of multinational corporations are not typically served by global outsourcers like EDS and IBM or by largest offshore vendors with global reach. That is why this market sector should present good prospects for Russian companies with the appropriate skills and market presence to pursue them. " - Explained Mr. Satinsky. Some 67% of the customer sample in the report consisted of IT companies, indicating further growth potential through cooperation with foreign partners in this industry sector."
3. Market niche for the Russian software services is high-quality programming.
"Major customers interviewed were attracted by opportunity to access technical quality - in terms of mathematical capabilities, experience with complex projects, creativity in solving difficult problems and by relatively low costs. It is not just access to low cost labor that brings customers to some other offshore locations: Russian vendors provide high-level programming and the same level of IT experts as in the US but at relatively low costs." - said Mr. Lane. As he further stressed in the report: "Users are attracted to the country's combination of a large, highly-skilled science, math and engineering talent pool, and its comparatively low labor costs".
4. Another important finding is that offshore vendor selection is not about the country, it is about the company.
"For major customers country is of low consideration in a vendor selection process" - said Mr. Satinsky, citing the report. "Companies contract with other companies, not countries and in the best circumstances, the offshore part becomes transparent as business people learn how to collaborate across cultures and time zones" - commented the report author, Stephen Lane".
One of the most important findings of the report is the high-level of satisfaction of customers that have been working with Russian services providers on significant projects. Over 85% of the interview participants indicated their satisfaction with the high quality of services and technical skills. The only complaints referred to some shortcoming of business relationship management experience of some providers. "The prospects of Russian software services market will be shaped - for the most part - by the ability of software vendors to build strong, transparent and well-managed business relations" - stressed Mr. Lane.
The full text of the report is available at Aberdeen Group's site
About RUSSOFT
National Software Development Association RUSSOFT unites more than 50 leading companies in the field of Software Development from Russia and Belarus.
In 2002 total export turnover of RUSSOFT's members was about $150 million, which is about 50% of export turnover of a whole software development industry of Russia. According to Gartner Group's forecasts, this sector of Russian economy will grow annually more than 50%, finalizing with the growth between 2000 and 2003 as big as 277%.
RUSSOFT member companies have provided the leadership that built the Russian software development industry over the last ten years. Today the industry utilizes Quality Assurance techniques based on former Defense Industry Standards and on the international CMM and ISO 9000/2000 standards. The companies also utilize sophisticated Project Management tools for distributed projects, which are based on internationally accepted tools such as Rational Rose, and modern managerial technologies such as Agile Programming.
www.russoft.org
About Aberdeen Group
Founded in 1988, Aberdeen Group is a leading IT market analysis and positioning services firm that helps Information Technology vendors establish leadership in emerging markets. The firm provides IT market intelligence, positioning, and market acceleration services to establish and start-up technology companies.
Aberdeen's consultants provide up-to-the-minute global IT market insights in more than 25 IT market segments. Research practices focus on emerging market opportunities, market growth rates, important industry trends, and customer buying patterns. The firm also helps clients to identify new market opportunities, enter those markets successfully, and accelerate the adoption of new technologies. Headquartered in Boston, Massachusetts, Aberdeen has research and consulting divisions in Palo Alto, California; Fort Collins, Colorado; and Amsterdam, the Netherlands. Aberdeen is accessible via the Web at www.aberdeen.com.