According to the IDC, in 2015 the Russian IT services market will grow by an average of 9-10 percent in ruble amounts.Getty Images
Russian software exports have more than doubled over the past five years, and now total around $7 billion. At the same time, however, demand for IT companies’ products has been falling in the domestic market. Analysts attribute this to a transformation of the Russian market, with demand now shifting from hardware to services.
“Here we must run as fast as we can, just to stay in place. And if you wish to go anywhere, you must run twice as fast as that.” This quote from Lewis Carroll’s “Alice in Wonderland” has become a motto for many Russian IT companies these days.
The period of boom in the Russian IT market is over. If sales in 2010-2012 grew by an average 20 to 30 percent, sales growth in 2013-2014 was practically zero. According to a forecast by the international analytical group IDC, the Russian IT market contracted by one to three percent in ruble amounts in 2015, compared with 2014. In dollar amounts, the drop is likely to be around 18 percent, to about $30 billion.
The contraction of the Russian IT market largely has to do with its structural transformation. Until recently, its most significant segment was made up by hardware, which accounted for approximately half of all sales.
The other segments were considerably smaller with IT services and software accounting for around 25 percent each. By comparison, in Western Europe and the U.S. the hardware segment enjoys a far smaller share of the market, not more than 20-30 percent.
The preference for hardware is now being “righted” in Russia, too. In unstable economic circumstances, companies buy fewer servers, computers and other hardware. At the same time, falling sales and rising competition push businesses to seek new ways of optimizing costs and improving efficiency. One effective method of tackling these goals is by applying modern IT solutions. As a result, demand for many of them in Russia is now on the rise.
The Russian IT services market grew by an average of 9 to 10 percent in ruble amounts in 2015, according to the IDC. There is a growing demand for business process automation software, cloud services, Big Data solutions, outsourcing and business analysis systems. This transformation of demand is prompting Russian IT companies to change the focus of their operations towards new growth areas. In order to just retain their positions, IT companies “must run twice as fast,” as Lewis Carroll said.
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