Russian Software is Conquering the World
According to the IDC, in 2015 the Russian IT services market will grow by an average of 9-10 percent in ruble amounts
Jan 15, 2016
Over the past five years, Russian software exports have more than doubled, reaching about $7 billion. At the same time, demand for IT companies’ products on the domestic market has been falling. Analysts attribute it to a transformation of the Russian market, with demand shifting from hardware to services.
The boom is over
"Here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that." This quote from Lewis Carroll’s "Alice in Wonderland" has become a motto for many Russian IT companies these days.
The period of boom on the Russian IT market is over: if in 2010-2012 sales grew by an average 20-30 percent, in 2013-2014 growth was practically zero. According to a forecast by the international analytical group IDC, in 2015 the Russian IT market contracted by 1-3 percent in ruble amounts compared with 2014. In dollar amounts, the drop will reach some 18 percent, up to about $30 billion.
Services instead of hardware
The contraction of the Russian IT market largely has to do with its structural transformation. Until recently, its most significant segment was made up by hardware, which accounted for approximately half of all sales.
The other segments were considerably smaller with IT services and software accounting for about 25 percent each. By comparison, in Western Europe and the U.S. the hardware segment enjoys a far smaller share of the market, not more than 20-30 percent.
The preference towards hardware is now being "righted" in Russia, too. In unstable economic circumstances companies buy fewer servers, computers and other hardware. At the same time, falling sales and rising competition push businesses to seek new ways of optimizing costs and improving efficiency. One effective method of tackling these goals is by applying modern IT solutions. As a result, demand for many of them in Russia is now on the rise rather than the other way round.
According to the IDC, in 2015 the Russian IT services market will grow by an average of 9-10 percent in ruble amounts. There is a growing demand for business process automation software, cloud services, Big Data solutions, outsourcing and business analysis systems. This transformation of the demand is prompting Russian IT companies to change the focus of their operations towards new growth areas. In order to simply retain their positions, IT companies "must run twice as fast" to quote Lewis Carroll again.
The boom is over
"Here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that." This quote from Lewis Carroll’s "Alice in Wonderland" has become a motto for many Russian IT companies these days.
The period of boom on the Russian IT market is over: if in 2010-2012 sales grew by an average 20-30 percent, in 2013-2014 growth was practically zero. According to a forecast by the international analytical group IDC, in 2015 the Russian IT market contracted by 1-3 percent in ruble amounts compared with 2014. In dollar amounts, the drop will reach some 18 percent, up to about $30 billion.
Services instead of hardware
The contraction of the Russian IT market largely has to do with its structural transformation. Until recently, its most significant segment was made up by hardware, which accounted for approximately half of all sales.
The other segments were considerably smaller with IT services and software accounting for about 25 percent each. By comparison, in Western Europe and the U.S. the hardware segment enjoys a far smaller share of the market, not more than 20-30 percent.
The preference towards hardware is now being "righted" in Russia, too. In unstable economic circumstances companies buy fewer servers, computers and other hardware. At the same time, falling sales and rising competition push businesses to seek new ways of optimizing costs and improving efficiency. One effective method of tackling these goals is by applying modern IT solutions. As a result, demand for many of them in Russia is now on the rise rather than the other way round.
According to the IDC, in 2015 the Russian IT services market will grow by an average of 9-10 percent in ruble amounts. There is a growing demand for business process automation software, cloud services, Big Data solutions, outsourcing and business analysis systems. This transformation of the demand is prompting Russian IT companies to change the focus of their operations towards new growth areas. In order to simply retain their positions, IT companies "must run twice as fast" to quote Lewis Carroll again.