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<strong>IT</strong> <strong>UKRAINE</strong> FROM A TO Z<br />

PART 1: THE UKRAINIAN <strong>IT</strong> ECOSYSTEM<br />

1.1. INTRODUCING <strong>UKRAINE</strong>’S <strong>IT</strong> ECOSYSTEM<br />

Well-known for the abundance of its highly-skilled engineers, Ukraine has become a leading European and<br />

global <strong>IT</strong> outsourcing hubs. In addition to being an outsourcing nation, Ukraine is emerging as a premier<br />

R&D destination for many global companies. The country boasts more than a thousand outsourcing<br />

companies, including small outsourcing shops, over one hundred national and international R&D shops as<br />

well as over two thousand startup companies. In 2015, the export volume of Ukraine’s<br />

software outsourcing companies reached at least $2.5 billion. 1<br />

Several <strong>IT</strong> outsourcing companies originating in Ukraine grew into technology giants with offices worldwide.<br />

Among these companies are Ciklum, DataArt, Infopulse, Lohika, Miratech and SoftServe. Impressive is the<br />

growth of AOG, an <strong>IT</strong> service company headquartered in Cherkasy (Central Ukraine), which accounts for<br />

5,000 affiliated freelance engineers less than three years after company launch. At the same time a number<br />

of foreign outsourcing companies like EPAM, GlobalLogic, Luxoft have multiple offices in Ukraine, which<br />

now stands as a major R&D hub for these global <strong>IT</strong> service providers. In total outsourcing companies<br />

employ more than 50,000 engineers (approximately 60% of all engineers) who live across Ukraine. 2<br />

Ukrainian software companies offer virtually every possible software services including, but not limited to,<br />

software development, web and mobile development, quality assurance and testing, business process<br />

outsourcing, dedicated team outsourcing, research and development services, <strong>IT</strong> consulting and <strong>IT</strong> security<br />

management. The majority of the country’s large outsourcing companies offer full-stack solutions while<br />

specializing in a number of industries. Smaller software shops usually focus on a few services like web<br />

development and design, mobile app development and testing, working across many industries.<br />

“The share of high-margin R&D and PSD services is<br />

increasing in the industry’s revenues. Such services may<br />

account for 20% of Ukraine’s <strong>IT</strong> export within five years.”<br />

Victor Valeev, director of the <strong>IT</strong> Ukraine association<br />

Ukraine is gaining importance on the global arena as a developing innovation hub. Such international giants<br />

as Aricent, Boeing, Ericsson, Huawei, Oracle, Siemens and Teleperformance, to name just a few, have<br />

chosen Ukraine as one of their R&D facilities location; these companies work on innovative products in<br />

every known industry, including e-commerce, software, cloud, security, healthcare, financial, transportation,<br />

retail, telecommunication and others. Other international companies such as Cisco, HP, Microsoft or Google<br />

do not have any R&D centers in Ukraine. Yet they have decade-long relations with leading software<br />

developments houses from Ukraine.<br />

Powered by the training and expertise that software outsourcing companies provide, Ukraine also has one<br />

of the most rapidly expanding startup communities in Europe. Among these internationally-oriented startups<br />

are BPMOnline, DepositPhotos, Grammarly, InvisibleCRM, Jooble, Looksery (acquired by Snapchat in<br />

September 2015), MacPaw, Paymentwall, Readdle, Starwind Software, and others. Some of them, like<br />

Paymentwall and Grammarly, have developed into global companies while keeping their main R&D office in<br />

Ukraine, where they started. A range of international funds invest in Ukraine including, but not limited to,<br />

Almaz Capital, the EBRD, Intel Capital, Horizon Capital, Naspers, along with local players such as<br />

AVentures Capital and TA Ventures.<br />

1. This consensual estimate is shared by the <strong>IT</strong> Ukraine association, the state statistics service, and investment fund Horizon Capital.<br />

However, the experts behind this report believe that Ukraine‘s actual <strong>IT</strong> service export volume is probably higher. What‘s more, if judging<br />

by the size of the country‘s population and qualified workforce, there is a considerable untapped export potential, should Ukraine<br />

eradicate corruption and better protect IP rights, according to US expert Phillip Hatch (see Part 7).<br />

2. Max Ischenko based on Dou.ua and Djinni.co data<br />

https://medium.com/@maxua/it-job-market-in-ukraine-2015-in-review-8571f38cde00#.57m3o285g<br />

16

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