Russian ISVs and Market Forces
Software-Russia conducted interviews with several Russian companies including ABBYY, Bercut, PROMT, SPIRIT DSP, all of which generate most of their revenue from product and software application development
Mar 28, 2014
The companies are all engaged in export as well as servicing the local Russian market. 75 percent of ABBYY’s annual revenue comes from outside of Russia. Meanwhile PROMT offers different products on the American and German markets. The majority of Bercut’s revenue is related to the development of software applications and products, and SPIRIT DSP focuses entirely on the development of software.
The different companies each focus on distinctive sectors and compete to varying degrees on the export market. PROMT’s R&D center is located in St. Petersburg, Russia with sales offices in the U.S. and Germany. The majority of the company’s staff is located in St. Petersburg and the company also maintains a sales office in Moscow. PROMT’s PR manager Ksenia Vatnik told Software-Russia, "Both domestic and international markets are very important for our company. Depending on the market, our sales have different structures: For our American clients the company offers mainly large personalized solutions; on the German market PROMT’s retail products are more in demand; and in Russia the company sells large corporate systems and products for individual users." The majority of PROMT’s R&D personnel consist of programmers, linguists, system architects, lexicographers and testers.
The overall number of people working for ABBYY exceeds 1250, with more than 700 working in the Moscow offices of ABBYY Group (including ABBYY HQ, ABBYY Russia, ABBYY 3A, ABBYY Language Services and ABBYY Press). About 70 percent of ABBYY HQ staff work in the company’s R&D unit and approximately one-third of the company’s personnel are located outside of Russia.
Bercut also looks to the global market, although it is more focused on servicing the domestic Russian market at the moment. Spirit claims that 95 percent of its business is export oriented. There is no data on Bercut’s workers located in other countries, although the company does maintain an office in Johannesburg, South Africa. Bercut’s only Russian location is its head office in St. Petersburg.
All of the companies maintain offices in major cities with a large number of resources and most agree that predicting growth and retraction is a challenge they all face. In order to keep attrition rates low, while still remaining flexible enough to respond to market forces, the companies employ different strategies.
ABBYY stated that "Macroeconomic factors certainly affect ABBYY’s business. Changes in the economy are not very easy to predict precisely. However, ABBYY does its best to keep the team stable. The stability of the team is particularly important for the long-term development of artificial intelligence technologies (document recognition, applied linguistics). Attracting and keeping top talent in this area is a very challenging task. ABBYY does a lot to provide wide opportunities for professional development and maintain an exceptional corporate culture." As a result ABBYY’s attrition rate is between 6 and 10 percent.
Eleonora Yakimenko, Bercut’s HR Director, said, "It is not much work to retain talent if you’ve really managed to create an atmosphere in the company where people believe in the same values as the company does. In this case we all look in the same direction and are all driven by the same things. We enjoy our work, enjoy cooperation. In such a situation the company does not need to make any special effort to retain somebody because we like being together. By the way, such an atmosphere also gives those talented people an opportunity to shine at work, which we truly value."
To attract and keep top talent, PROMT has developed a special program to appeal to gifted youth. PROMT selects those who are interested in the company’s developments and invites them for practical training. Many young people decide to stay on and continue working at PROMT.
Spirit, all of whose employees are located in Moscow, offers their partner companies the basics of any attractive position: "a global market, good pay and an interesting job".
PROMT, which report an attrition rate of 5 percent, insist that while an employee leaving the company certainly has an impact on the structure it also offers an opportunity for optimization, saying: "The team is almost like a living organism and a little bit of constant renewal and the intake of fresh sources and ideas is for its own good."
All of the companies reported that it is difficult to find enough new talent to meet their needs. Yet while Moscow and St. Petersburg have abundant scientific potential and that there is no lack of applicants in the big cities, the companies say that they are engaged in a constant search for new talent. According to ABBYY’s Anastasia Savina, "the company needs more talented developers engineers and linguists to realize its full potential."
Bercut and Spirit, who both state that their attrition rates are in line with industry averages, note that they have reduced hiring over the past several years. For Bercut the company finds that it has become easier to operate now due to the increase of idle resources on the marketplace.
Education reform at the state level and tax benefits have begun to make Russian ISVs more competitive, a move welcomed by the industry.
The different companies each focus on distinctive sectors and compete to varying degrees on the export market. PROMT’s R&D center is located in St. Petersburg, Russia with sales offices in the U.S. and Germany. The majority of the company’s staff is located in St. Petersburg and the company also maintains a sales office in Moscow. PROMT’s PR manager Ksenia Vatnik told Software-Russia, "Both domestic and international markets are very important for our company. Depending on the market, our sales have different structures: For our American clients the company offers mainly large personalized solutions; on the German market PROMT’s retail products are more in demand; and in Russia the company sells large corporate systems and products for individual users." The majority of PROMT’s R&D personnel consist of programmers, linguists, system architects, lexicographers and testers.
The overall number of people working for ABBYY exceeds 1250, with more than 700 working in the Moscow offices of ABBYY Group (including ABBYY HQ, ABBYY Russia, ABBYY 3A, ABBYY Language Services and ABBYY Press). About 70 percent of ABBYY HQ staff work in the company’s R&D unit and approximately one-third of the company’s personnel are located outside of Russia.
Bercut also looks to the global market, although it is more focused on servicing the domestic Russian market at the moment. Spirit claims that 95 percent of its business is export oriented. There is no data on Bercut’s workers located in other countries, although the company does maintain an office in Johannesburg, South Africa. Bercut’s only Russian location is its head office in St. Petersburg.
All of the companies maintain offices in major cities with a large number of resources and most agree that predicting growth and retraction is a challenge they all face. In order to keep attrition rates low, while still remaining flexible enough to respond to market forces, the companies employ different strategies.
ABBYY stated that "Macroeconomic factors certainly affect ABBYY’s business. Changes in the economy are not very easy to predict precisely. However, ABBYY does its best to keep the team stable. The stability of the team is particularly important for the long-term development of artificial intelligence technologies (document recognition, applied linguistics). Attracting and keeping top talent in this area is a very challenging task. ABBYY does a lot to provide wide opportunities for professional development and maintain an exceptional corporate culture." As a result ABBYY’s attrition rate is between 6 and 10 percent.
Eleonora Yakimenko, Bercut’s HR Director, said, "It is not much work to retain talent if you’ve really managed to create an atmosphere in the company where people believe in the same values as the company does. In this case we all look in the same direction and are all driven by the same things. We enjoy our work, enjoy cooperation. In such a situation the company does not need to make any special effort to retain somebody because we like being together. By the way, such an atmosphere also gives those talented people an opportunity to shine at work, which we truly value."
To attract and keep top talent, PROMT has developed a special program to appeal to gifted youth. PROMT selects those who are interested in the company’s developments and invites them for practical training. Many young people decide to stay on and continue working at PROMT.
Spirit, all of whose employees are located in Moscow, offers their partner companies the basics of any attractive position: "a global market, good pay and an interesting job".
PROMT, which report an attrition rate of 5 percent, insist that while an employee leaving the company certainly has an impact on the structure it also offers an opportunity for optimization, saying: "The team is almost like a living organism and a little bit of constant renewal and the intake of fresh sources and ideas is for its own good."
All of the companies reported that it is difficult to find enough new talent to meet their needs. Yet while Moscow and St. Petersburg have abundant scientific potential and that there is no lack of applicants in the big cities, the companies say that they are engaged in a constant search for new talent. According to ABBYY’s Anastasia Savina, "the company needs more talented developers engineers and linguists to realize its full potential."
Bercut and Spirit, who both state that their attrition rates are in line with industry averages, note that they have reduced hiring over the past several years. For Bercut the company finds that it has become easier to operate now due to the increase of idle resources on the marketplace.
Education reform at the state level and tax benefits have begun to make Russian ISVs more competitive, a move welcomed by the industry.