Rising Demand for Russian IT Solutions

10 june 2016

“The global market remains highly unstable as it is being buffeted and jerked around by negative geopolitical factors. Regionalization is increasing around the world: some countries are building up walled gardens within their own regional alliances, others are creating new free trade organizations,” said the Head of the Department for International Cooperation of the Analytical Center Denis Eershov at the opening of the 8th International IT Forum participated in by BRICS and Shanghai Cooperation Organization countries. “The way international trade is evolving has changed too - since 2012 it has been growing slower than the global GDP.”

Since 2010, exports of Russian software have more than doubled, reaching USD 7 billion in 2015. However, the period of boom growth in the IT market is over, Mr. Ershov believes. Faced with the crisis, companies are scaling back purchases of equipment but are beginning to pay more attention to optimizing costs and boosting efficiency; and one way both these objectives can be achieved is by introducing modern IT solutions. So there is some growth in the domestic services and software sector (CRM, cloud technologies, big data solutions.)

The expert believes that demand for software solutions from Russia is on the rise and they are being used more and more in the domestic market. Our companies have also been quite successful at breaking into foreign markets as well, expanding sales in such countries as the US, Germany, Austria, Switzerland, Brazil, India, the Middle East, Singapore and China. They are also playing an ever more prominent global role in the customized software and IT services segments. Russian IT solutions for the banking sector, call centers, business analytics, and cloud solutions have also earned a very good reputation around the world.

Import substitution and participation in major IT infrastructure projects backed by the state are bound to become another major growth driver in Russia’s IT sector. “The creation of a national registry of software solutions for the public service has been a solid step with regards to import substitution. I think this move is going to have a positive impact on wide acceptance of Russian software products in the domestic market,” Mr. Ershov believes.

State support measures include full or partial subsidizing of participation by Russian companies in international trade fairs; from July 1, 2016 Russian non-mineral resources exporters will be able to get VAT refunds immediately after shipping their products and getting a VAT invoice, and the establishment of trading companies on the basis of the Russian trade representative offices in Iran, Vietnam, Kazakhstan, China and Argentina. The trading companies will offer services to Russian exporters, organize trade fairs and offer legal support.