russian software developing industry and software exports

Chapter 2.
Volume and Structure of Russian Software Export
despite the crisis and start-ups have more chances to
win popularity there than on the market of desktop
applications where the leaders were determined
long ago.
It is quite possible that the total export of product
companies exceeds the above USD 800 mln. The
growth may also be a little higher than 26% owing to
the creation of new companies and developer teams
making sales through the Internet. Exports volume of
many small companies may be underestimated due to
a small sample and rarely disclosed profits.
Moreover, there are products that are difficult to
categorize. For example, ordinary pictures for mobile
phones can hardly be considered software products
because their development is primitive in a developer’s
opinion. However, such solutions are sold in numerous
copies earning quite a big income. The turnover for
such simple products sold by Russian companies
and individuals abroad has not been calculated yet.
Probably, in future it will be reasonable to turn to
research companies to make relevant estimates.
Unless new sources of information about product
exports are found, it can be stated that at the yearend
2008 it amounted to no less than USD 800 mln.
In 2009, despite encouraging news for individual
companies the growth of this indicator will probably
be far less than 26%. For the majority of export
companies that disclosed information on the turnover
growth the revenue increased by approximately
10% in 2008. Only owing to Kaspersky Lab and
2-3 more major developers total export growth for all
companies reached about 30%.
Probably, Kaspersky Lab will remain among leaders
by its growth rate because the anti-virus market was
the least affected by the crisis. Nevertheless, company
executives expect a major decline in the growth rate.
SWSoft (Parallels) is likely to have good
indicators because the global software market of
virtualization developed by this company continues
to rise. According to Gartner, it will increase 1.5 times
in 2009.
The visit of the Russian president to the countries
of Africa and Latin America may also positively
influence export revenues. During this international
tour the head of the state was accompanied by
several software companies looking for new markets,
although it will be quite difficult for them to succeed
in these quite complicated markets.
In 2009, ASCON planned to start to actively
promote its solutions far abroad. But due to the
shrinkage of the Russian IT market its sales in
Russia also dropped which led to the reduction of
its marketing budget. The company will still start
entering new markets but less actively than was
intended before the crisis. Apparently, the plans
of some other Russian developers were revised in
a similar way.
Many product companies expect a minimum
growth and do not exclude the decline in sales. There
are grounds for the assumption that the Russian
export of products and ready-made solutions is
unlikely to surpass 10-15%.
Despite 2008 was marked for a significant
export growth of product companies, their total
sales abroad are comparable with the sales of 2-3
major Western software companies in the Russian
market. The largest and the most successful Russian
developers of replication software are very far from
the top positions of the world rating. Their turnover
makes only several percent of the annual revenue of
world leaders. Therefore, it is incorrect to evaluate
their status and prospects only on the basis of a high
growth rate.
INTERNATIONAL SOFTWARE
DEVELOPMENT CENTERS,
UNIVERSITIES AND RESEARCH
INSTITUTES
Volume – USD 400 mln. Growth – 4%.
In 2008, the number of international centers
for research and development in Russia has not
changed. It was not expected that new centers
were set up, because the majority of computer
and telecommunications corporations are already
represented in Russian by their branches involved in
software development and research.
None of the major companies reported
a significant increase of its staff of programmers
and researchers. There is no information on big
reductions of staff (apart from dismissals in Motorola’s
development center) either. In some Russian branches
of international companies the number of employees
has slightly decreased. However, this mainly happened
at the year-end 2008 and dismissals concerned not
more than 10%.
At the same time the cooperation with universities
and research institutes was expanded. According to
data available, in 2009 the share of this consolidate
source of export revenues will drop. Although
certain corporation are still extending cooperation
with universities, average headcount of staff in
international development centers will be less in 2009
against 2008. Probably, the financing of these centers
will be affected by the reduction of average salaries in
the software industry.
EXPORT OF SERVICES
Volume – USD 1,450 mln. Growth – 12%.
There was enough information available to
estimate the volume of export services since the
poll ordered by RUSSOFT Association mainly
involved service companies. Only 5 companies out
of 114 exporters made total revenues from sales
of software products.
18% of respondents disclosed information on
turnover at the year-end 2008. At the same time
all companies indicated time periods for revenues
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