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Export of Russian Software Development Industry 2014 Export of Russian Software Development Industry 11-th Annual Survey With support from RUSSOFT Association APKIT Association 2014 RUSSOFT Association is the most important nation-wide amalgamation of software development companies (both — software vendors and software development service providers) from Russia, but also comprising a number of companies from Ukraine and Belarus. RUSSOFT Association was created in 1999 in St. Petersburg (Russia) as a non- commercial partnership under the name of “Consortium Fort Ross” composed of 10 local companies. Consortium was primarily intended to coordinate joint marketing efforts of its members for promoting Russian software development services worldwide. After the merger with NSDA, a Moscow based Software Developers Association, in 2004, the united Association took the name of RUSSOFT Association. RUSSOFT unites over 80 companies with the total staff exceeding 30 thousand qualified software engineers. 9 member companies of RUSSOFT enter the List of 100 World leading outsourcing service providers (Global Services, 2014). Names of 8 RUSSOFT members are listed in the ratings of World leading software vendors in particular software segments (including Gartner Magic Quadrants). RUSSOFT is the major lobbyist of the industrial interests in the State bodies at all levels. The Association also works on developing IT-education and professional retraining, on diminishing administrative barriers, on High-Tech export support. RUSSOFT organizes numerous marketing events worldwide, it also conducts marketing campaigns among major Russian customers, including State corporations. Members of RUSSOFT Association form the Pyramid of the Russian software development industry — from startups to worldly known corporations — which represents the major Russian IT-centers — Moscow, St. Petersburg, cities from Siberia, Ural and Volga areas. Beginning from 2004, RUSSOFT Association has been conducting the annual market surveys which studied the entire Russian software development industry. The results whereas form the unique source of information for the State bodies, international analysts and clients, as well as for the whole Russian software industry itself. You are welcome to look through results of our study in Y2014! Contents Chapter 1. Russian IT-Market on the Global Scale.................................................... 3 Publications on High Technologies in Russia in Foreign Mass Media............................4 General Situation in the Russian ICT Market ..................................................11 Russia in the International IT-ratings .........................................................20 Achievements of Individual Russian Companies in the International IT-ratings ................25 Chapter 2. Volume and Structure of the Russian Software Export ...................................30 Basic concept and data......................................................................31 Consideration of Effectiveness of Social Tax Incentives’ Application to Software Companies....34 Composition of Software Export.............................................................35 Software Development Services' Export .....................................................38 Products and Ready-to-Use Solutions........................................................43 Captive Development Centers of Foreign Corporations in Russia..............................47 Chapter 3. Primary Trends in the Russian Software Development Industry...........................50 General Trends..............................................................................51 Foreign Investments ........................................................................55 Investments of Russian Companies and Funds Overseas......................................62 The Global Software Market and Ways to Increase Sales of Russian Suppliers ..................65 Chapter 4. Business Environment in Russia.........................................................68 General Situation . .69 State Support of in the Information Technology Area.........................................70 Taxation System . 74 Situation in the Area of Protection of Intellectual Property Rights .............................78 Chapter 5. Geographic Reach and Main Vertical Markets ...........................................80 Main Geographical Markets .................................................................81 Geographic Distribution of Marketing and Trade Offices of Russian Companies ...............86 Geographic Distribution of Software Development Centers ..................................87 Vertical Markets.............................................................................91 Chapter 6. IT-Education and Labour Market ........................................................93 General estimations.........................................................................94 Situation on the Labor Market in Russia and in Other Countries...............................96 Mobility of Personnel. Staff Turnover........................................................101 Chapter 7. Technologies .........................................................................107 Operating Systems.........................................................................108 Programming Tools .......................................................................109 Data Bases Management Systems ..........................................................111 Summary ......................................................................................112 Participants of the Survey ........................................................................117 Dear colleagues! Dear friends! Let me bring to your notice results of the annual (this time already 11th) survey of the software development export industry in Russia. The research was conducted by RUSSOFT (Nonprofit Partnership of Software Developers, RUSSOFT Association) from February to April 2014. More than 130 market players were interrogated within the research, additionally a wide range of sources of information were studied, expert judgments were received from dozens of CEOs of software development companies. The last year has witnessed the global contraction of economic growth and a slowdown in the Russian industry. This period was also marked by the ‘rebound’ in the Russian IT market dynamics; the market volume practically remained at the previous year’s level. Nevertheless, in 2013 the Russian software development industry continued to develop actively, having increased its export almost by 17% and having reached the export volume of 5.4 billion dollars. The last year was notable for strengthening positions of Russian software vendors in the so-called Magic Quadrants of Gartner. Besides Russian service companies strengthened their positions in the international ratings of outsourcing service providers (Global Services, IAOP). For the first time the growth of the share of small companies in the total export volume became evident reflecting the performance results of measures undertaken by the State Institutes in the recent years. Unfortunately, prospects for export growth will not depend only on companies themselves but on political developments, particularly on situation in Ukraine. Russian companies feel appearance of political barriers although typical only for clients who lack experience in working with Russia. The relationships with loyal clients remain unchanged, fruitful and friendly. De-escalation of political tensions between Russia and the West is unavoidable thereupon business activities will certainly come up. Taking this opportunity, I would like to thank ConfirmIT and Toy Opinion for their effective support of information collection, and also to thank PROMT for their excellent translation of report into English. Also I would like to express gratitude to our dear colleague Andrey Terekhov, professor of St. Petersburg University, for his precious remarks and advice, and to Andrew Rysin for the outstanding design of this report. And certainly, I wish to give kind words of gratitude to our analyst and writer Dmitry Zhelvitsky. We are very grateful to the Association of Computer and Information Technology Companies (APKIT) and to our sponsors: Auriga, Artezio and Genesys for supporting the research. Many thanks to all survey participants who provided information on their companies and thus contributed to the overall success. With best regards, Valentin Makarov Executive Editor RUSSOFT Association President Chapter 1 Russian IT-Market on the Global Scale 4 Chapter 1. Russian IT-Market on the Global Scale 1.1. Publications on High Technologies in Russia in Foreign Mass Media The tone of publications in foreign media over the past year changed to the disfavor of Russian software exporters. A share of publications concerning high technologies that refract Russia increased from 39% to 51%. However this increase in and on itself does not suggest the appearance of new serious problems which can block export of Russian software companies. Some revealed changes even play in favor of promotion of their services and solutions abroad. We will speak about it a little further. The analysis was only performed based on publications puterworld, eWeek (PC Week), Financial Times, Forbes, The describing the hi-tech economy sector and, first of all, the Hindu, IT Europe, InfoWorld, Linux Magazine, MacWorld, software development industry. The search within a num- Network World, The New York Times, PC World, REUTERS, ber
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