Business Monitor International Bullish on Russian Software and Services Sector
Aug 17, 2014
Investment in the Russian data center and cloud computing market has been strong in the first half of 2014, backed by a well-developed telecoms sector, skilled IT professionals, large internet population and opportunities for outsourcing reports Business Monitor International (BMI), an industry analyst, in its latest report. The firm sees this as indicative of a strong medium-term outlook for Russia’s IT market, which sees growth potential in devices and enterprise solutions.
According to BMI, government support is a double-edged sword, with state intervention helping to promote IT development but excessive regulation of the Internet possibly also resulting in the industry losing its luster. Similarly, the analysts see Russia’s joining of the WTO and the Information Technology Agreement (ITA) as helping the industry, but say Russia lags behind in terms of IPR enforcement and online piracy, which has been, and remains, a significant problem for the country.
Pressure on retail hardware sales as a result of competition from low-cost tablets means value growth will fail to keep pace with unit growth over the medium term, says the firm. According to BMI, hardware is forecast to be the underperforming market segment in 2014, as the shift in consumption to lower cost tablets means growth in market value will fail to keep pace with unit growth.
BMI forecasts software sales to gain 7.3 percent in local currency terms in 2014 — up to 149.7 billion rubles ($4.17 billion) from 139.5 billion rubles ($3.88 billion) in 2013. Modernizations initiatives by Russian enterprises are driving spending increases as they become more integrated in global markets and supply chains, say analysts.
In addition, IT Services sales will be driven by demand for cloud computing as awareness levels and infrastructure quality improves, says the new report. BMI expects growth in services of 8.9 percent, or 219 billion rubles ($6.1 billion), compared to 201.0 billion rubles ($5.59 billion) in 2013.
According to BMI, government support is a double-edged sword, with state intervention helping to promote IT development but excessive regulation of the Internet possibly also resulting in the industry losing its luster. Similarly, the analysts see Russia’s joining of the WTO and the Information Technology Agreement (ITA) as helping the industry, but say Russia lags behind in terms of IPR enforcement and online piracy, which has been, and remains, a significant problem for the country.
Pressure on retail hardware sales as a result of competition from low-cost tablets means value growth will fail to keep pace with unit growth over the medium term, says the firm. According to BMI, hardware is forecast to be the underperforming market segment in 2014, as the shift in consumption to lower cost tablets means growth in market value will fail to keep pace with unit growth.
BMI forecasts software sales to gain 7.3 percent in local currency terms in 2014 — up to 149.7 billion rubles ($4.17 billion) from 139.5 billion rubles ($3.88 billion) in 2013. Modernizations initiatives by Russian enterprises are driving spending increases as they become more integrated in global markets and supply chains, say analysts.
In addition, IT Services sales will be driven by demand for cloud computing as awareness levels and infrastructure quality improves, says the new report. BMI expects growth in services of 8.9 percent, or 219 billion rubles ($6.1 billion), compared to 201.0 billion rubles ($5.59 billion) in 2013.