Six Russian IT Outsourcers in Global Top-100
Six companies with dominant presence of Russian developers have been included into the Top-100 2008 of the International Association of Outsourcing Professional.
Apr 14, 2008
Last year only four Russian companies were included into the list. The outsourcing market is still booming in India. Experts believe the Russian IT outsourcing is accelerating its growth rate but personnel shortage might be encountered in the future.
The International Association of Outsourcing Professional (IAOP) has published a new rating the Global Outsourcing 100, which consists of best 100 outsourcers in various sectors. The rating is formed on the basis of applications processed by an independent jury. Such parameters as a company’s size, its turnover and client base growth rate, competence and management capacity are countered.
Six companies, which are Russian or have development centers in Russia – Auriga, DataArt, EPAM Systems, IBA, Luxoft and Mera – have been included into 2008 ranking. All the mentioned companies are affiliated with Russoft. As compared to the last year’s rating, the Russian representation has increased 1.5-fold. Auriga, IBA and Mera have been included into the list for the first time. DataArt, EPAM Systems, Luxoft and StarSoft were included into the Global Outsourcing 2007.
One of the most rapidly growing segments is IT outsourcing, which can be proved by the increased number of Russian companies in the IAOP rating. ‘Judging from our company’s business development, those engaged in retail sales, finance sector arrangement, and several state enterprises and institutions, are currently especially interested in strategic outsourcing cooperation, - tells Maxim Troitsky, director of special solution and service sales department at ISG. – However, speaking about the transformation of traditional IT services provision, one should not forget about insourcing. It is rapidly developing in the oil and gas sector, metallurgy and power industry’.
Speaking about the global outsourcing market tendencies, Mr. Troitsky recollects that, according to TPI, in 2007 EMEA market has surpassed the US market for the first time by the number of contracts concluded (220 vs 194), and by their value ($40.9 bn vs $26.6 bn). ‘The strategic outsourcing market is booming in India, - Mr. Troitsky says. – The total value of contracts concluded in 2007 has surpassed that of 2006 two-fold ($4.9 bn vs $2.7 bn). In 2007 India proves to be not only a supplier of outsourcing services but consumer. Such established companies as IBM, HP, and Accenture are known to have substantially contributed to India’s development’.
Thus, pessimistic forecasts of several analysts about the western outsourcing company’s prospects are meanwhile unlikely to become true. However, the given fact does not interfere with the Indian outsourcing boom. The Indian outsourcing companies occupied 9% of the global market in 2007, which is a 4% increase as compared to 2005. The top-5 share continues decreasing occupying 37% in 2007 vs 45% over the previous two years. However, the leaders do not intend to give up, which is proved by HP’s achievements in Europe.
‘Russia seems to be a ‘backwater’ of strategic outsourcing against the background described, - continues Maxim Troitsky. – However, the given sector is becoming more and more attractive from year to year, as many recent obstacles have been eliminated’.
According to some experts, it is not the influence of the Russian but East European IT outsourcing that is increasing in general. ‘The main factor – price rise and overheated labor market in India – forces customers to look for alternative places for outsourcing, - says Anatoly Gaverdovsky, senior vice president of EPAM Systems. – China and Eastern Europe are considered viable alternatives to India. The East European outsourcing is becoming more popular not because of competitive advantages and expertise development, intensification of operations with customers, but due to India image downward’.
Specialist point to the interest of global players in the Russian outsourcing market as one of last year’s key tendencies, which results in the increase of competition both for customers and resources. It should be noted that, for example, the Indian Tata Consulting Group has expanded into Russia. Experts point to several problems the Russian IT outsourcers might encounter in the future. ‘The situation with resources is deteriorating. Unfortunately, the Russian educational systems does not change, so that domestic companies are short of skilled young specialists, - says Anatoly Gaverdosvky. – Regarding the demographic break the situation is becoming critical. If no investment is made into the IT education, the immigration policy is not reformed to provide for the input of talented youth from the former USSR, the Russian IT outsourcing might face serious problems’.
The International Association of Outsourcing Professional (IAOP) has published a new rating the Global Outsourcing 100, which consists of best 100 outsourcers in various sectors. The rating is formed on the basis of applications processed by an independent jury. Such parameters as a company’s size, its turnover and client base growth rate, competence and management capacity are countered.
Six companies, which are Russian or have development centers in Russia – Auriga, DataArt, EPAM Systems, IBA, Luxoft and Mera – have been included into 2008 ranking. All the mentioned companies are affiliated with Russoft. As compared to the last year’s rating, the Russian representation has increased 1.5-fold. Auriga, IBA and Mera have been included into the list for the first time. DataArt, EPAM Systems, Luxoft and StarSoft were included into the Global Outsourcing 2007.
One of the most rapidly growing segments is IT outsourcing, which can be proved by the increased number of Russian companies in the IAOP rating. ‘Judging from our company’s business development, those engaged in retail sales, finance sector arrangement, and several state enterprises and institutions, are currently especially interested in strategic outsourcing cooperation, - tells Maxim Troitsky, director of special solution and service sales department at ISG. – However, speaking about the transformation of traditional IT services provision, one should not forget about insourcing. It is rapidly developing in the oil and gas sector, metallurgy and power industry’.
Speaking about the global outsourcing market tendencies, Mr. Troitsky recollects that, according to TPI, in 2007 EMEA market has surpassed the US market for the first time by the number of contracts concluded (220 vs 194), and by their value ($40.9 bn vs $26.6 bn). ‘The strategic outsourcing market is booming in India, - Mr. Troitsky says. – The total value of contracts concluded in 2007 has surpassed that of 2006 two-fold ($4.9 bn vs $2.7 bn). In 2007 India proves to be not only a supplier of outsourcing services but consumer. Such established companies as IBM, HP, and Accenture are known to have substantially contributed to India’s development’.
Thus, pessimistic forecasts of several analysts about the western outsourcing company’s prospects are meanwhile unlikely to become true. However, the given fact does not interfere with the Indian outsourcing boom. The Indian outsourcing companies occupied 9% of the global market in 2007, which is a 4% increase as compared to 2005. The top-5 share continues decreasing occupying 37% in 2007 vs 45% over the previous two years. However, the leaders do not intend to give up, which is proved by HP’s achievements in Europe.
‘Russia seems to be a ‘backwater’ of strategic outsourcing against the background described, - continues Maxim Troitsky. – However, the given sector is becoming more and more attractive from year to year, as many recent obstacles have been eliminated’.
According to some experts, it is not the influence of the Russian but East European IT outsourcing that is increasing in general. ‘The main factor – price rise and overheated labor market in India – forces customers to look for alternative places for outsourcing, - says Anatoly Gaverdovsky, senior vice president of EPAM Systems. – China and Eastern Europe are considered viable alternatives to India. The East European outsourcing is becoming more popular not because of competitive advantages and expertise development, intensification of operations with customers, but due to India image downward’.
Specialist point to the interest of global players in the Russian outsourcing market as one of last year’s key tendencies, which results in the increase of competition both for customers and resources. It should be noted that, for example, the Indian Tata Consulting Group has expanded into Russia. Experts point to several problems the Russian IT outsourcers might encounter in the future. ‘The situation with resources is deteriorating. Unfortunately, the Russian educational systems does not change, so that domestic companies are short of skilled young specialists, - says Anatoly Gaverdosvky. – Regarding the demographic break the situation is becoming critical. If no investment is made into the IT education, the immigration policy is not reformed to provide for the input of talented youth from the former USSR, the Russian IT outsourcing might face serious problems’.