Report on the Russian Software Development Export Industry


Report on the Russian Software Development Export Industry

December 5, 2012

Auriga presents a summary of the annual survey on the Russian software development export industry, prepared by RUSSOFT, an association of Russian software development companies. This report is the most comprehensive source of information on industry dynamics, its position on the global market, and the most relevant development trends.

Auriga, one of RUSSOFT’s founding members with representation on the Board of Directors, is actively engaged in the association’s activities and initiatives, including surveys and research, related to the software development export industry. We have highlighted for you the most important points from RUSSOFT’s survey.

Overall State of the IT Industry in Russia

  • Russian IT market volume in 2011 amounted to over $29 billion based on IDC estimates (21% higher compared to the previous year). According to the IDC forecast, the Russian IT market will increase by 14% in 2012 and reach $33 billion.
  • For several years, external financing in the IT sphere has been growing considerably. In 2011, the total amount of venture investments in the Russian IT sector equaled $237 Mn. PricewaterhouseCoopers (PwC) and Russian Venture

    Auriga is consistent in securing a spot among the leading outsourcing companies according to rating agencies. In the last five years, the company has been included on the lists of the best outsourcing providers according to both Global Outsourcing 100 and Global Services 100.Additionally, in 2011, Auriga was the only Russian company that made it to the Black Book of Outsourcing, published by Datamonitor. Auriga was ranked #1 Engineering Services Outsourcing (ESO) provider by Datamonitor, ahead of such companies as IBM, Dell, HP, HCL, Wipro, and Siemens.

    Company (RVC) experts predict that the Russian IT sector will grow by more than 50% in 2012.
  • Russia improved its position in the world e-Government ranking (e-Government Survey 2012: e-Government for the People), having risen from 59th to 27th place.
  • In the previous year, a larger number of software development companies represented Russia in leading international ratings, such as the Global Outsourcing 100 and Global Services 100. A distinguishing characteristic of these ratings is that they assess not only quantitative but also qualitative indicators, which include, but are not limited to, performance indicators, customer-satisfaction levels, a range of rendered services, and industry leadership.

Major Results and Trends of the Russian Software Development Export Industry

  • At this stage, the “pyramid” of the Russian software development industry has finally been formed. Just 8% of the respondent companies delivered up to 73% of software and software development service export. At the top of the pyramid, there is a group of leaders that naturally turned into global corporations that have their sales offices in all leading markets and their branched-out networks of development centers in Russian regions and in other countries.
  • Following the results of 2011, consolidated export revenues of Russian software developers increased by 22.4% and reached $4.04 Bn. Apparently, the growth rate has stabilized at the level of 20–25% and will remain at this level for the next two years.
  • The software development and services export share is the largest in the Russian IT export structure.
  • The software development export industry has a high potential for growth in the next several years. This growth may reach up to 30% in all export segments: software products, custom software development, and R&D.
  • The growth rate of software development service export increased by 27.6%. The share of application and software product development accounted for 50% of all service export. Maintenance of developed or existing IT systems accounted for another 20%, while R&D and other IT services (integration, consulting, and infrastructure support) accounted for 15%.
  • The growth of export volume of software products and ready-to-use solutions reached 20% in 2011. RUSSOFT experts believe there is potential for future growth, which may be provided by companies with export incomes already exceeding $100 Mn (Parallels, Acronis, Transas, ABBYY, i-Free, etc.).
  • RUSSOFT also highlights that in 2011, more companies without previous records of working on foreign markets expanded their presence into these markets. The US and Western Europe markets are still the most likely for Russian companies, whereas the attractiveness of the US market increased compared to the previous year, which can be explained by the US economic recovery in 2011.

The change in the global IT industry landscape (shift in emphasis to the technologies used in mobile services, cloud computing, big data, information security) was bound to reflect upon the trends of the Russian IT industry.

In the mobile area, Auriga has considerable experience in creating applications; porting; and providing cross-platform support, automated testing, etc. for various platforms: iOS, Android, Windows Phone, Symbian, Bada, Tizen, all flavors of Linux, and various RTOSs.

Auriga works with a great number of clients, from startups to giants like Chrysler or Yandex, and focuses on:

  • Mobile clients for online services
  • Multi-platform support
  • Mobile system internals
  • Communication protocols
  • Multimedia streaming and transcoding
  • Location-based services

  • Developers have already noted the growth in demand for solutions for mobile devices (HTML5, development for iOS, Android, and Windows Phone). A great number of new specialized mobile solutions for the healthcare, logistics, financial, and corporate sectors are expected to appear.
  • Customers abroad and in Russia are soon expected to pay great attention to areas such as cloud platform optimization, security, personal data safety, and access management in cloud applications.
  • Business Intelligence (big data analysis and interpretation) continues its dynamic development.
  • In addition, there will be a great demand for various solutions designed for social networks.

The research also contains detailed data on such issues as human resources and the labor market, demand for technologies, and the main vertical markets of the Russian software development market. The conclusions and forecasts provided in the report will help software developers and their customers better understand the state of the industry and apply this information to address their business needs.



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