Russia: IT outsourcing approaches
The Russian IT market is currently product-oriented. According to market participants, in the near future the share of services in the given market is to increase. Outsourcing is to become one of the most promising market development trends.
Dec 06, 2007
Both the Russian and foreign companies – participants of CNews Forum 2007 - claim to be ready to work in the given direction.
Services make up only 20% of the Russian IT market, Felix Glickaman, Sistematica CEO, says. He believes the Russian IT market mainly consists of equipment and software, while in the West the service share amounts to about 60% of the IT market.
Consequently, according to Mr. Glickman, the Russian companies are using IT inefficiently. The situation is worsened by the fact that the share of IT expenses in the Russian companies is too small amounting on average to 0.35%, while abroad it comes to about 2-3% of the overall commodity turnover. 7-8% of revenue is spent by insurance and banking sectors to develop IT implementation. According to Sistematica CEO, the main reasons for weak return of IT are the widely spread autocratic management, poor business monitoring, and such factors like high level of corruption and non-market competition.
Some positive shifts to the IT-service share to increase, in particular, outsourcing, have been observed in the Russian IT market recently. The outsourcing share is currently very low and does not exceed 2.5% of the overall IT market volume. According to Ivan Andrianov, the outsourcing meeting western standards does not exist in Russia. The existing outsourcing covers some applications and systems, but no comprehensive approach has been adopted by any company.
At the same time, the company ‘Open Technologies’ considers outsourcing one of the most promising trends of the IT market development. According to Mr. Andrianov, in 2008 some tenders for outsourcing contracts are planned to be held, while large outsourcing projects should be completed by 2010. The company ‘Open Technologies’ considers the public authority institutions the key customers. The public customer is now most ready to switch to outsourcing services. ‘That is the most mature IT-customer in Russia at present’, - Ivan Andrianov believes.
Thus, the company Citrix Systems, which owns about 80% of the world application delivery market, has intensified in the Russian service market for state institutions this year. According to Sergei Kuznetsov, Head of the company’s Russian Representative Office, in the near future Citrix will present a new product in the Russian market especially developed for the Russian market. The novelty will be presented as a product for state institutions. At the first stage the components of the company Cryptopro will be used in the product as crypto agents, the list is to expand in the future. According to Mr. Kuznetsov, that ‘might help satisfy both the functional and legislative requirements of Russian customers’. At present a quarter of all Citrix Systems solutions in the Western Europe falls on the state institutions. According to the company Gartner, the average term of Citrix solutions payback is about 7.5 months.
Services make up only 20% of the Russian IT market, Felix Glickaman, Sistematica CEO, says. He believes the Russian IT market mainly consists of equipment and software, while in the West the service share amounts to about 60% of the IT market.
Consequently, according to Mr. Glickman, the Russian companies are using IT inefficiently. The situation is worsened by the fact that the share of IT expenses in the Russian companies is too small amounting on average to 0.35%, while abroad it comes to about 2-3% of the overall commodity turnover. 7-8% of revenue is spent by insurance and banking sectors to develop IT implementation. According to Sistematica CEO, the main reasons for weak return of IT are the widely spread autocratic management, poor business monitoring, and such factors like high level of corruption and non-market competition.
Some positive shifts to the IT-service share to increase, in particular, outsourcing, have been observed in the Russian IT market recently. The outsourcing share is currently very low and does not exceed 2.5% of the overall IT market volume. According to Ivan Andrianov, the outsourcing meeting western standards does not exist in Russia. The existing outsourcing covers some applications and systems, but no comprehensive approach has been adopted by any company.
At the same time, the company ‘Open Technologies’ considers outsourcing one of the most promising trends of the IT market development. According to Mr. Andrianov, in 2008 some tenders for outsourcing contracts are planned to be held, while large outsourcing projects should be completed by 2010. The company ‘Open Technologies’ considers the public authority institutions the key customers. The public customer is now most ready to switch to outsourcing services. ‘That is the most mature IT-customer in Russia at present’, - Ivan Andrianov believes.
Thus, the company Citrix Systems, which owns about 80% of the world application delivery market, has intensified in the Russian service market for state institutions this year. According to Sergei Kuznetsov, Head of the company’s Russian Representative Office, in the near future Citrix will present a new product in the Russian market especially developed for the Russian market. The novelty will be presented as a product for state institutions. At the first stage the components of the company Cryptopro will be used in the product as crypto agents, the list is to expand in the future. According to Mr. Kuznetsov, that ‘might help satisfy both the functional and legislative requirements of Russian customers’. At present a quarter of all Citrix Systems solutions in the Western Europe falls on the state institutions. According to the company Gartner, the average term of Citrix solutions payback is about 7.5 months.