The Year of High Technologies

This year has become the record one by the number of investment deals in the Russian IT-market. Russian and foreign investors have invested $700 million into the Russian IT-companies and the next year the sum of investments can double. Meanwhile the volumes of the Russian segment of the IT-industry increase by 15-20% a year. According to analysts, such dynamics are explained by the increasing demand for the Russian software products, by the development of consumer crediting and of the retail trade systems that sell computers and electronics. As they say in the Ministry of Information and Communication, the adoption of the package of laws on personal data and of the amendments to the Tax Code (which introduce a special tax regime for IT-companies) promises to give a powerful impulse to the development of the IT-industry.

Money Inflow instead of Brain Drain

The Russian Programmer brand can compare to such "trade marks" as the Jewish Financier or the Chinese Cook. The participants of the world IT-market associate the most unexpected and promising innovations – just like the most daring computer crimes - with the Russian experts in the high-tech sphere. For a number of years already for trans-national IT-corporations it has been good form to import programmers from Russia. However, it is only recently that the majority of Western participants of the IT-market have started thinking about more serious investments. From buying up Russian IT-experts Western investors have for the first time transferred to the buying up of the shares of Russian companies - this has been the year's main trend. In particular we can name the following deals of the kind: the purchase of the Nival Inteactive company by the American Ener1 Group holding from its founder Sergey Orlovsky in the April of this year; the sale of 49% of shares of the Revkom content provider to the trans-national Sumitomo group (the volume of both deals made up $ 10 million). All in all, according to the evaluations of the J` Son & Partners (J&P) company, this year foreign investors have invested around $700 million into the Russian IT-industry – compared to 2004 the level of investments increased by 75%.

According to analysts, on the results of 2006 the level of foreign investments into the Russian IT-branch will reach $1 billion. The special attention of foreign investors to the Russian IT-branch is quite explainable. According to the evaluations of the IDC company, on the results of 2005 the capacity of the Russian IT-market will constitute $ 12 billion. This is around 2% of the capacity of the world IT-market, which is more than $900 billion. However, on the parameter of growth rate (24-26% a year) Russian high technologies have left the average world indicators far behind.

"Such growth rate of investments into the IT-sector is quite justified, - they say in the Ministry of Information and Communication. – One of the reasons is the positive expectations of the participants of the market and of the investors that are connected with the shaping of a full-scale normative base, which actually singles out the IT-branch (making it a priority direction of economic development in Russia) and guarantees the stable development of this segment. For example, the adoption of the Law on Digital Electronic Signature will drastically increase the capacity of the market of IT-services and consequently the value of the companies working in it."

"Year 2005 has demonstrated the interest of the Western investors in the Russian IT-market. System integration and software development have turned out to be the most important segments for the investors. I think that other segments – including retail trade systems - will follow suit, - says Segey Gorbuntsov (J&P, analyst). – As of today Russia is prepared for the industrial production of both hardware and software. This is what determines the good potential of the market's development."

Toy Locomotive

Analysts and participants of the market name a lot of reasons for the growth of the Russian IT-market and for