russian software developing industry and software exports

Chapter 1.
Position of Russia in the Global Market of Software
and Software Development Services
(after the crisis began) and they are planning to
provide services here (for instance, Finnish companies
Forte Netservices and Elisa). Previously this market
was also considered promising, because in the field
of outsourcing Russia had a bigger lagging behind
Western companies than in other areas.
According to IDC, in 2007 Russian companies spent
on IT outsourcing USD 532 mln, which makes 12.1%
of total Russian market of IT services. In Western
Europe this indicator makes around 20%, and in the
USA – 40%. Gartner’s data state that IT outsourcing in
Russia makes a little more than 10% of total volume of
IT services. The nonprofit partnership Astra founded
by major Russian IT services providers is planning
to stimulate demand in the market of outsourcing
services.
IT companies and analysts expect that in 2009 the
share of the state would increase in the breakdown of
costs. According to IDC, in 2008 state bodies spent on
IT USD 2.96 bn with the volume of Russian IT market
reaching around USD 24.6 bn. Therefore, the State
covered 12% of total IT market.
SOFTWARE MARKET
Anti-piracy measures remain one of the key drivers
for the growth of the Russian software market.
According to the annual research of BSA and IDC,
the volume of unlicensed software installed on
computers in Russia in 2008 decreased by 5% against
2007. The level of piracy in Russia reached 68%,
and in 2004 – 87%. During these years this indicator
increased from 38% to 41% in the world in general,
and remained the same in the European Union – 35%.
BSA and IDC take into account the total cost of
software installed illegally. This does not mean that
unauthorized software is actively used for its intended
purpose according to its functionality. In many cases
students and adolescents install it only to try a certain
program. Commercial enterprises often install illegally
(and therefore, free of charge) powerful and highpriced
software despite being quite happy with the
functionality of simple and inexpensive programs.
Therefore, the real level of piracy in Russia, according
to expert estimations, approximates 50%.
There are reserves for the market growth owing
to the anti-piracy campaign. They are predetermined
by the current piracy level (quite high according to
all estimates) and also by unmet needs. By the level
of informatization Russia approaches the developed
states, but still the difference is big.
At the same time, analysts do not expect the
Russian software market to grow in 2009. According
to the IDC forecast, software sales will drop by
30%. In 2007, this market increased by 40% and
totaled around USD 3.2 bn. In 2008, the growth was
10.5%. The Mass Media published the estimates,
performance results and forecasts of the leading IT
companies. The revenue of a major Russian software
developer 1С increased only by 8% in 2008, though
in 2007 its sales almost doubled (source: Vedomosti
as of May 15, 2009). In the first 4 months of 2009 this
indicator decreased by 14% in rubles and by 39% in
dollars. However, 1С sales of business software (ERPsystems,
automated accounting systems, etc) grew
by 20% in this period. In January-April 1С sales of
multimedia and game products decreased by 32%
due to difficulties with availability of loans faced by
retail shops.
ABBYY’s sales through retail and reseller channels
dropped by 48%. Anti-virus and anti-spam software
proved to be crisis-resistant – the growth was 23%.
In 2008, the volume of the Russian software
market of data protection, recovery and modeling
amounted to USD 21 mln. According to forecasts of
the American developer CA, in 2008-2012 this market
would grow by 10% annually and by 2012 will attain
USD 30 mln (source: CNews as of March 4, 2009).
Additionally, CNews portal reported that the
turnover of the company Salesforce.com specializing
in CRM applications provision doubled in from April
2008 to April 2009.
The Finnish company Elisa entered the Russian
market with the similar offer in April 2009 expecting
the increase in demand for CRM applications in Russia.
Managers of the Russian branch of Microsoft as
well local partners of this vendors anticipated the
economic revival of the Russian software market
already in June-July, but this hasn’t happened. Several
partners evaluated the decline in sales of Microsoft
solutions in H1 2009 by 50%. However, the vendor
stated that sales reduction was far less – only 10-20%.
According to the data of Sofkey, a major Russia
software distributor, the sales of software for
corporate clients dropped by 50% against year-onyear.
Producers of information security products
(primarily anti-viruses) retain the same pre-crisis
volume of business. The crisis also has not led to the
reduction in virtualization systems sales.
According to Anti-Malware.ru, in 2008, the market
volume of anti-viral software in Russia would amount
to USD 210 mln, which is 57% more year-on-year.
Anti-Malware.ru predicts that in 2009 this market will
continue to grow but at a slower rate than in recent
years. The growth will unlikely exceed 30%.
According to IDC, the Russian market of
information security systems increased by 46.7%.
Russia in World Ratings
According to the World Economic Forum, in 2009
Russia ranked 74th by the level of development
of Information and Communication Technologies
(ICT) in the rating with the record of 134 countries
participating. The report of the World Economic
Forum was devoted to the theme «Mobility in
a Networked World» and focused on interrelations
between mobility and ICT.
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