russian software developing industry and software exports

Chapter 5.
Geographical Distribution and Key Vertical Markets
Moscow are the most frequently named (8 and
7 times, respectively) as appropriate locations for
such centers despite the labor cost of programmers
in these cities is the highest in Russia. Probably,
service and product providers should be closer to
the key market where they already operate or only
intend to in order to support their solutions and work
with clients.
Voronezh, Kazan and Saratov have 3 records as
locations for remote development centers, while
Rostov-on-Don, Samara and Ekaterinburg – 2.
The following cities have a single record each:
Arzamas, Veliky Novgorod, Izhevsk, Krasnoyarsk,
Krasnodar, Nizhni Novgorod, Nizhni Tagil,
Novosibirsk, Omsk, Petrozavodsk, Ryazan, Stavropol,
Tver, Togliatti and Yaroslavl.
This list is incomplete, because the sample
of respondents makes around 10% of the whole
database of RUSSOFT companies. Nevertheless,
based on this it is still possible to get a rough
idea about cities with good conditions to start
a development center.
Compared to last year the number of cities
registered in responses has significantly increased
(from 15 to 21), but not all cities from the previous
survey are mentioned this year. Therefore, this list
may be expanded with Perm, Tyumen, Kaliningrad,
Novokuznetsk, Tomsk, Vladimir, Kolomna and
Kurgan. It is unlikely that development centers
were closed down in these cities. They were not
mentioned in the poll, because probably the
structure of respondents has changed. Thus, it can
be stated that Russia has more than 30 cities suitable
for the opening of remote centers.
Respondents also mentioned the cities in
Russia’s neighboring states, where they placed their
development centers.
Remote development centers
(share of respondents who named country or region)
in Russia
overseas
in Belarus
in the Ukraine
in other
CIS countries
in Western Europe
in Central and
Eastern Europe
in the US & Canada
in South-East Asia
0% 5% 10% 15% 20%
4%
4%
4%
4%
3.5%
3%
0.5%
16%
19%
There are 7 such cities in Belarus: Minsk, Vitebsk,
Brest, Gomel, Grodno, Mogilev and Novopolotsk.
In Ukraine – 8: Kherson, Kharkov, Kiev, Odessa,
Dnepropetrovsk, Lvov, Vinnitsa and Sevastopol.
In the CIS (including Russia, Ukraine and Belarus)
development centers of Russian companies are
functioning in Alma-Ata, Armenia, Baku and even
Tajikistan. Kazakhstan is the most frequently named.
Last year Tashkent (Uzbekistan) and Karaganda
(Kazakhstan) were also mentioned in the survey.
Some companies despite the difficult times
they are facing are planning to set up new remote
development centers in 2009–2010, but this figure is
very small (around 4% of all exporters). In 2009, new
branches may appear in Russia (Penza and Samara)
and China.
Right after the survey it was announced a new
development center of a Russian company was
opened in China. One of respondents refused to
name the city, but voiced its intention to set up a
development center in Russia in 2009.
In addition, around 4% of companies are planning
to establish their remote development centers and
branches in 2010. They named: Vilnius, Belarus (or
Ukraine), Dnepropetrovsk, Moscow, Russia (cities not
specified).
GEOGRAPHICAL DISTRIBUTION
OF MARKETING AND COMMERCIAL
OFFICES
Commercial and marketing offices were set up
by approximately the same proportion of export
companies as registered for those who opened
remote development centers – i.e. 28%. The majority
of companies with a production site in another city
also have a sales office. However, one branch rarely
functions as a trade office and a development center
at the same time.
15% of respondents have more than one
commercial or marketing office. The highest
concentration of sales offices is in Russia. The second
and the third places by the frequency of records in
this rating belong to the USA and Western Europe.
There are practically no trade offices in the Baltic
states. Only one company has sales offices in Ukraine
and Kazakhstan.
The biggest number of representative offices
in Russia is opened in Moscow (7 records). In
Ekaterinburg, Nizhni Novgorod and St. Petersburg
respondents have two sales offices. The following
cities were also named as locations for sales offices:
Astrakhan, Kirov, Krasnodar, Murmansk, Omsk, Perm,
Stavropol, Togliatti, Tula and Elista. As in the case with
remote development centers, this list in incomplete
since the sample makes around 10%. To make a
comprehensive list at least more than a half of Russian
software companies had to be polled.
Typically, if a company has a sales office in the US
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