Russian IT-Market Value: Analysts’ Estimates
The Russian IT market value following the results of 2007 amounts, according to various estimates, to $11.9 - $17.6 bln.
Feb 13, 2008
The market is growing rather slowly, but analysts forecast new acceleration. The share of services and software is gradually expanding due to reducing expenditure on equipment, the public sector facilitating to the industry development.
Currently the slowdown in growth of the Russian IT market continues, the Polish research company PMR concludes. It was one of the first to announce its preliminary 2007 estimates on Russia. In its study ‘Russian IT market – development forecasts for 2008-2010’ PMR estimates the total market value in 2007 at $16.3 bln, which is a 18.1% increase as compared to 2006.
But domestic analysts speak about a new spiral of acceleration. According to CNews Analytics (CNA) estimates, based on Rosstat statistics (Federal State Statistics Service), the total expenditure of customers on IT in 2007 increased by 19%, the market value reaching $11.9 bln. The analysts name the public sector as one of the main forces facilitating to IT industry development. According to Sergey Shalmanov, CNews Analytics expert, in 2006-2007 the industry was influenced by the annual increase in federal and regional expenses on IT, active informatization of the social sphere resulting from the launch of priority national projects. ‘In the coming years the given tendency will not only remain but intensify due to investment into the project ‘E-government’’, - the expert says.
‘Late in 2007 it became evident that the decline in the growth rate stopped, - Vasily Burov, Linex expert and Head of the analytical agency Real IT, says. – We relate the given tendency to the replacement of the deficit momentum in IT acquisition for the market one. It means that enterprises start investing into receiving maximum benefit from IT. The given tendency emerged only in QIII-IV, that is why it is not revealed in 2007 results’. ‘Linex estimates the Russian IT market value in 2007 at $15.96 bln’.
Analytical agency/Preliminary estimates of the IT market value, $ bln, 2007/Increase as compared to 2006, %
CNews Analytics*/11.9/19
Linex***/15.96/15.3
IDC**/16/18
PMR**/16.3/18.1
Ministry of IT and Communications/17.6/24.5
* on the basis of Rosstat statistics on IT expenditure of enterprises and organizations (net of retail sales)
** on the basis of IT companies’ proceeds
*** on the basis of IT companies’ proceeds and customers’ expenditure
The estimation of the Ministry of IT and Communications is the most optimistic, i.e. $17.6 bln with a 24.5% increase. CNA accounts the divergence in estimations for the difference in methods used. CNews Analytics uses Rosstat data on expenditure of IT customers from the corporate and public sectors. Other estimates are base on the proceeds of suppliers of IT products and services provided by the suppliers. Under such method some figures might be counted several times (for example, the data of the integrator and subcontractor). Besides, under such approach it is difficult to count the difference arising because of the shifts in financial periods of companies regarding the calendar year, CNA says.
Most researchers point to the market tendency to move away from hardware and increase the share of IT services and software (to 28% and 17%, relatively). According to Leonid Reiman, Minister of IT and Communications, following the results of 2007 the total value of the software and IT service market reached 198 bln rubles ($7.7 bln) against 28 bln in 2000.
At the same time, according the CNews Analytics review ‘IT service market 2007’ published in late 2007, there is no unanimous data regarding the growth rate of the IT service sector in Russia. Analytical agencies judging from the announced proceeds of the major suppliers speak about the rate of 20%, while Rosstat points to the decline of 9% (against 23% a year earlier) judging from the data on enterprises’ expenditure. According to the review composers, the given factor proves the sector to be opaque and the indices of participants exaggerated.
Currently the slowdown in growth of the Russian IT market continues, the Polish research company PMR concludes. It was one of the first to announce its preliminary 2007 estimates on Russia. In its study ‘Russian IT market – development forecasts for 2008-2010’ PMR estimates the total market value in 2007 at $16.3 bln, which is a 18.1% increase as compared to 2006.
But domestic analysts speak about a new spiral of acceleration. According to CNews Analytics (CNA) estimates, based on Rosstat statistics (Federal State Statistics Service), the total expenditure of customers on IT in 2007 increased by 19%, the market value reaching $11.9 bln. The analysts name the public sector as one of the main forces facilitating to IT industry development. According to Sergey Shalmanov, CNews Analytics expert, in 2006-2007 the industry was influenced by the annual increase in federal and regional expenses on IT, active informatization of the social sphere resulting from the launch of priority national projects. ‘In the coming years the given tendency will not only remain but intensify due to investment into the project ‘E-government’’, - the expert says.
‘Late in 2007 it became evident that the decline in the growth rate stopped, - Vasily Burov, Linex expert and Head of the analytical agency Real IT, says. – We relate the given tendency to the replacement of the deficit momentum in IT acquisition for the market one. It means that enterprises start investing into receiving maximum benefit from IT. The given tendency emerged only in QIII-IV, that is why it is not revealed in 2007 results’. ‘Linex estimates the Russian IT market value in 2007 at $15.96 bln’.
Analytical agency/Preliminary estimates of the IT market value, $ bln, 2007/Increase as compared to 2006, %
CNews Analytics*/11.9/19
Linex***/15.96/15.3
IDC**/16/18
PMR**/16.3/18.1
Ministry of IT and Communications/17.6/24.5
* on the basis of Rosstat statistics on IT expenditure of enterprises and organizations (net of retail sales)
** on the basis of IT companies’ proceeds
*** on the basis of IT companies’ proceeds and customers’ expenditure
The estimation of the Ministry of IT and Communications is the most optimistic, i.e. $17.6 bln with a 24.5% increase. CNA accounts the divergence in estimations for the difference in methods used. CNews Analytics uses Rosstat data on expenditure of IT customers from the corporate and public sectors. Other estimates are base on the proceeds of suppliers of IT products and services provided by the suppliers. Under such method some figures might be counted several times (for example, the data of the integrator and subcontractor). Besides, under such approach it is difficult to count the difference arising because of the shifts in financial periods of companies regarding the calendar year, CNA says.
Most researchers point to the market tendency to move away from hardware and increase the share of IT services and software (to 28% and 17%, relatively). According to Leonid Reiman, Minister of IT and Communications, following the results of 2007 the total value of the software and IT service market reached 198 bln rubles ($7.7 bln) against 28 bln in 2000.
At the same time, according the CNews Analytics review ‘IT service market 2007’ published in late 2007, there is no unanimous data regarding the growth rate of the IT service sector in Russia. Analytical agencies judging from the announced proceeds of the major suppliers speak about the rate of 20%, while Rosstat points to the decline of 9% (against 23% a year earlier) judging from the data on enterprises’ expenditure. According to the review composers, the given factor proves the sector to be opaque and the indices of participants exaggerated.