Kinguin Affiliate Bestsellers
Kinguin Affiliate Bestsellers
Kinguin Affiliate Bestsellers
- Advertisement -Newspaper WordPress Theme
UncategorizedRussian IT market growing steadily after pandemic

Russian IT market growing steadily after pandemic

Russia’s IT market is growing steadily this year despite the pandemic and its consequences. 

Become a football legend with FIFA 22

According to a recent report by IDC, the Russian IT services market was worth $6.75bn in 2020, 4.9% more than in 2019.  

Although the current year’s results have not yet been announced, most analysts expect the market’s growth in 2021 to be significantly higher than in 2020.  

Vladimir Vertogradov, vice-president of the LANIT group, a leading Russian IT company, told Computer Weekly: “A significant part of IT projects began to be implemented by internal customer teams with the support of integrators, and not by the integrators themselves. It feels like the growth in demand for IT services in Russia in 2021 will be 20-30%. As a result of the pandemic, many regional teams and companies that were previously represented only in Russian regions have expanded into the federal level.” 

In terms of market structure, despite strong presence of multinationals, Russia’s IT market is currently dominated by local players. As well as LANIT, the largest of them are CROC, ITG, Jet Infosystems and I-Teco. The combined revenue of these five companies made up 25% of total market revenue in 2020.  

In addition to domestic players, the Russian IT market remains within the sphere of interests of some global players, many of which are considering accelerating their expansion there. One such company is Germany’s SAP – one of the oldest local players, which expanded into Russia shortly after the collapse of the USSR.   

An official spokeswoman for SAP Russia told Computer Weekly that SAP has had a successful business in Russia since 1992. “But the low level of digitisation is still the main challenge,” she said. “Many Russian companies that have already achieved growth, customer retention and conquering new markets are calling for new approaches and new business models that cannot be built without digital technologies.”  

In the meantime, the pandemic has caused some serious difficulties for operations of other global majors in the Russian market.  

Jonathan Batty, director of public relations at DXC Technology for the EMEA region, said the past year with the Covid-19 crisis has been challenging for all businesses in Russia and throughout the world. “In addition to doing our best to address customer demands, our focus has been on the safety and wellbeing of our colleagues – as well as ensuring they have been equipped to work virtually,” he said.

Most analysts and suppliers believe the level of competition in the Russian IT market has tightened significantly in recent years, mainly due to the appearance of some strong local players in the market.

LANIT’s Vertogradov said he does not expect multinational IT corporations’ share of the Russian market to increase significantly in the coming years, especially if they are manufacturers of software or equipment. 

He said Russia’s import substitution policy, which has been implemented by the government in recent years, has led to the appearance of a large number of domestic competitive products and has also contributed to the growth of demand for IT specialists in the local market.  

Among the promising niches for global majors in Russia could be primarily consulting and development services, according to Vertogradov.  

“Of course, the knowledge of the Russian language is important to participate in local projects, but in some positions this may not be so critical,” he said. 

According to analyst reports, the public sector is expected to be one of the major drivers for IT companies in Russia this year, as the demand for IT services from state-owned corporations grows steadily.  

As regards banks, an IDC report said that last year, the biggest IT budget commitments by banks were for business digitisation programmes, security, and the development and improvement of mobile applications and internet banking services.  

The telecommunications sector also saw a positive trend in IT spending. Despite the difficulties in the retail and wholesale sector, the number of projects did not decrease, but priorities shifted towards the development of online commerce, the implementation of self-service solutions, logistics and analytics. 

Natalia Vinogradova, research programmes manager at IDC Russia, said: “The pandemic had a double-natured impact on the IT services market in Russia, as some companies were forced to increase investment in IT services, while others decided to postpone spending. However, in most cases, the plans and priorities for investment in IT became even more relevant, because IT helps organisations to recover faster and more efficiently from the consequences of the crisis.” 

However, a number of challenges continue to prevent more active expansion of the market and leading local players. One such challenge is a shortage of personnel in the Russian IT sector, which, according to estimates, ranges from 500,000 to one million.  

Russia’s ministry of finance has warned that in the near future, the situation may become even worse. According to its recent predictions, within the next six years, the shortage of young IT specialists may at least double. An official spokesman for the ministry said recently that by 2027, the shortage of skilled IT workers in Russia could exceed two million. 

Source link

Subscribe Today





Get unlimited access to our EXCLUSIVE Content and our archive of subscriber stories.

Exclusive content

- Advertisement -Newspaper WordPress Theme

Latest article

More article

- Advertisement -Newspaper WordPress Theme