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Video-conference IT-Initiative for BRICs Situation in the Russian IT Industry. Russian Innovation Week October 1, 2009, St Petersburg Valentin Makarov,

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Presentation on theme: "Video-conference IT-Initiative for BRICs Situation in the Russian IT Industry. Russian Innovation Week October 1, 2009, St Petersburg Valentin Makarov,"— Presentation transcript:

1 Video-conference IT-Initiative for BRICs Situation in the Russian IT Industry. Russian Innovation Week October 1, 2009, St Petersburg Valentin Makarov, President of RUSSOFT Association www.russoft.org

2 RUSSOFT (www.russoft.org) RUSSOFT is the major Association of 60+ leading software development companies from Russia (also some from Belarus) with more than 23000 software engineers, $800 M of export turnover Part of the Russian Information and Computer Industry Association (APKIT). Close partnership with the Russian Association of Electronics manufacturers Leadership in implementing PM and QA (CMMI/ISO) standards in the Industry Organizer of marketing and PR activities in Russia and abroad (RUSSOFT Forum, Mobile Software Forum, SECR, IT-Seasons, National Pavilions at CeBIT, …) Active lobbyist of IT interests in the Russian Government (IT-parks and Free Economic Zones, Export Promotion Agency, Law on better taxation, less administrative barriers, more effective educational system, etc.)

3 Russian IT offshoring market has grown rapidly over the last 2 years with growth rates being highest across the globe USD Million Russia Offshoring 1 Market, 2006-08 CAGR = 31% Note: 1 Offshoring Market includes Export of Software and IT Services; CEE = Central and Eastern Europe Source: Russoft; IT Ukraine; PMR Publicaitons; Primary interviews with key stakeholders with leading service providers in Russia; Zinnov Analysis 1,450 2,200 2,500 The high R&D activity can be attributed to the fact that the talent in Russia is highly capable of performing new product development and similar high-end activities due to the prevalent advanced education system IT Offshoring Market Split by Activity Based on Size, 2008 32% 30% 3

4 NeoIT reports on January 07, 2007 …Russia would emerge as a strong contender in the IT outsourcing market with an expected growth of 40-45 per cent in 2007. It is currently the third largest IT outsourcing supply market, behind India and China …Russian IT companies specialize in high-end software and embedded software product development, which acts as a differentiator from lower-priced offerings from Indian companies

5 Russia has evolved as the largest market for IT offshoring as compared to Central and Eastern European (CEE) region IT Offshoring Market, 2008 Russia IT offshoring market is at least 4 times as high as the largest market (Ukraine) in CEE region Source: IT Ukraine,; Russoft; PMR Publicaitons; Primary interviews with key stakeholders with leading service providers; Zinnov Analysis USD Million 5

6 Export of Software and IT-Services in BRIC countries in 2008 Brazil - $2,2 B (data from BRASSCOM) Russia - $2,6 B (data from RUSSOFT annual survey) India - $29 B (prewliminary data from NASSCOM) China $7 B ?

7 The Best 100 Global Service Providers in 2009 Among 100 best IT-service providers EPAM Systems (Belarus-Russia) Exigen Services IBA (Belarus) Luxoft Mera NN Reksoft Intetics (Ukraine) Itransition (Belarus) Global Services&NeoIT, 2009 Ten best IT-service providers in CEE 1. Luxoft 2. EPAM Systems 3. Exigen Services 4. IBA 5. Reksoft 6. MERA Networks 8. DataArt 10. Auriga Ten best Global Product development services providers Exigen Services, EPAM Systems, Luxoft, Auriga, MERA Networks

8 Final score of the ACM Finals 2007/2008/2009 2008: St Petersburg University of IT, Mechanics and Optics – absolute World and European Champion, Gold Medal! Massachusetts Institute of Technology – 2nd place and Gold Medal Izhevsk State Technical University – 3 rd place and Gold Medal Ljvov National University - 4 th place and Gold Medal Moscow State University – 5th place and Silver Medal Tsinghua University – 6th place and Silver Medal Stanford Uuniversity – 7th place and Silver Medal University of Zagreb – 8 th place and Silver Medal University of Waterloo – 9th place and Bronze Medal Petrozavodsk State University – 10 th place and Bronze Medal St Petersburg State University – 11 th place and Bronze Medal Belarus State University - 12 place and Bronze Medal 2009: St Petersburg University of IT, Mechanics and Optics – absolute World and European Champion, Gold Medal! St Petersburg State University – 3rd place and Gold Medal Saratov State University – 4th place and Gold Medal ALTOGER 3 Gold Medals out of 4 are won by Russian Teams! St Petersburg University of IT, Mechanics and Optics is rated #1 among World Universities in ACM International Programming Collegiate Contest

9 Differentiators Within 10 years Russia became World #3 in terms of HighTech off-shore IT-services We got significant results in Mobile WiMax, in Voice Integration, in Voice&Video Engines, Image Recognition, Virtualisation, in automatic translation, in every sphere of Software related to Mobile communications. Russian High Education brings new generations of best engineers to the Global market every Year. They do not leave the country. Instead they produce new software and services, create new businesses We are Science intensive and hard business goals' solution providers with huge R&D experience. Specialization in high-end software and product development acts as a differentiator from lower-priced offerings Highly integrated with resources in Ukraine and Belarus, Russian software services industry represents a unique East-European Outsourcing Pole, culturally and linguistically close to USA and to EU

10 Russian IT-market growth, 2007/2008 ($M) $ B Source: IDC, 2009 6% Growth (in $) 26% 12% Growth (in $) 47% 60% 27% 34% 9%

11 Major IT-market growth factor in Russia... Source: Energy Information Administration IT-market and dynamics of petrol prices, 1994-2008 $/barrel $B Slide is provided by IDC experts

12 What do we need to get rid if dependance on mineral resources and to fully realise great potential of Rusian IT Governmental policy aimed at development of the ICT sector into a real «Engine» of the New Economy based on Innovations

13 Anti-crisis measures exposed in the Letter to the President of Russia, dated August 29, 2009 - Keep Social taxation intact for HighTech - Create Export Promotion Agency and apply HighTech export promotion policy - Invest in and adjust educational system - Invest in development of the communications infrastructure - Implement eGovernment and stimulate IT-consumption in Economy and in Society


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