Oct 29, 2010
Russian Software Export Industry - RUSSOFT Survey
In October 2010, Russian Software Developers Association (RUSSOFT) published the results of the 7th Annual Survey of the Russian Software Export Industry, conducted in February - April 2010.
The report document presents a clear picture of the state of the industry and highlights the main trends of its development. The conclusions and forecasts provided in the report will help the software developers and their customers and alike to better understand the state of the industry.
With starting market recovery, it is important to analyze how the market is reacting to ongoing changes and make some assumptions about the future.
Russian IT industry, and export IT services in particular, are recovering and showing growth after the crisis. Though largely impacted by the sharp drop in the Russian IT market, the Russian software industry continued to grow in 2009. Software exports in general grew by 5% (up to $2.75 bln). The estimated software development services export volume for 2009 is $1,400 mln.
Once again, the survey confirmed that flexibility and diversification are a must in the times of economic turbulence.
Middle-sized companies (range of $0.5 mln to $20 mln) fared the best through the crisis, and small companies (with turnover less than $0.5 mln) had the most affected loss. However, it is noted that small-size have a good chance for survival, and some of them even felt that the impact of the crisis was positive. Yet another important conclusion is that the export-oriented companies are generally more adaptable to business fluctuations and market changes. The diversification of the order portfolio and market flexibility.
Analysis of dynamics in the revenues of the companies, depending on the share of exports, demonstrated how vulnerable the developers are that earn most of their revenue on the Russian market. Turnover of the companies that took part in the survey, with exports at a level of less than 25% of their total revenues, decreased by 11% while companies with exports at a level of more than 75% increased it by 2%.
Though total volume of Russian IT is very moderate on the global scale (2-2.5%, if we take into account not only the exports but their sales in Russia as well.), the industry is gaining growth and the overall expectation of the market players are positive, the IT companies are confident in the economic rebound. The companies that took part in the survey expect exports to grow by 20% in 2010 and by 18% in 2011.There is an emerging trend to prepare the companies for the growth which is reflected in the desire to attract investment for development in 2010-2011.
The software development services provided to foreign customers continue to be the main source of export revenues in 2009, with USA and Canada remaining the main geographical markets for software development services export, however, the total share of respondents that consider USA and Canada as their key market decreased twofold in three years– to 26% from 28% in 2008, 43% in 2007 and 52% in 2006. This change was primarily the result of responses by small-size companies.
There was a continuing boom in all Internet-related ICT market segments, which means very high effectiveness of investments. All Internet-related indicators show huge growth over 2009-2010: growth in numbers of World Wide Web users (+31.5), mobile Internet users, custom Web development projects, domain names in the .RU zone (+44%), social networks users etc (+23%), users who trust electronic payment systems (+300). etc. In Moscow, Saint Petersburg and certain other major cities in Russia the broadband access market is close to being saturated, and the Internet penetration rate of this category is on the level of world leaders (in Moscow the Internet penetration rate exceeds 60%).
Download the RUSSOFT survey to receive detailed report explaining Russian ICT market trends, the Russian IT labor market dynamics, and the reasons that lie beyond the positive business results of Russian IT services & products exporters.
RUSSOFT Association (http://www.russoft.ru) is the nation wide association of the most technically competent software developing companies from Russia, Belarus and Ukraine. The association is committed to a long-term policy of lobbying favorable legislation for the software development industry and hosts marketing and educational events in Russia and abroad.
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