RUSSOFT, an association of Russian software development companies, has recently published the results of its 12th annual survey on the Russian software development export industry.
RUSSOFT’s report is the most comprehensive and reliable source on the current state of the IT industry in Russia, its place in the global market, and the most important development trends. RUSSOFT unites more than 100 Russian IT companies, from startups to large international companies. Nowadays, RUSSOFT is the best source of relevant, up-to-date information from the key market players—no other report provides more detailed information. In this article, we have highlighted the most important findings from RUSSOFT’s report.
Overall State of IT Industry in Russia in 2014
- In 2014, corporate and private users extended their use of information technologies, stimulating turnover growth for Russian software development companies despite the complicated economic situation. The cumulative turnover of Russian software development companies increased by 5% and amounted to $12 Bn in FY2014. Half of that was software exports, the value of which reached $6 Bn (+11% compared to the previous year), and the other half was domestic market sales, the value of which was almost the same as the year before.
The cumulative turnover of Russian software development companies reached $11 Bn (16% more than in the previous year).
- The share of Russian software and services in the entire Russian export share continues to increase. In 2014, the share reached 1.2% (for comparison, the values of the previous years were as follows: 1% in 2013, 0.88% in 2012, and 0.8% in 2011).
Auriga is consistent in securing a spot among the leading outsourcing companies according to rating agencies. The company has been included in the Global Outsourcing 100 every year for the last eight years.
- The turnover of Russian outsourcing software development companies exceeded $5 Bn (6% growth in dollar terms, 27% growth in ruble terms, and 14% growth in ruble terms considering inflation).
- The positions of Russian software development companies in international ratings, such as the Global Outsourcing 100 and the Global Services 100, have been maintained at the same high level.
Key Results and Trends of Russian Software Development Export Industry
- The survey demonstrates that there are no pure niche players in the market. But despite the fact that each company on average is active in three to four markets, every company targets one or two that remain key marketing areas. Similar results were found for 2013.
- For the second year in a row, interest in the North American market has been consistently growing. Of surveyed companies with turnover below $5 Mn, 46% have a steady presence there, and service companies are more actively engaging in the market (US, Europe) than product companies.
- The report highlights a significant growth of interest in the Middle East market as well as expansion to new geographical markets, such as Latin American countries, Vietnam, Mongolia, African countries, India, China, etc.
- The main vertical markets for software development companies in 2014 were Information Technologies (68% of the surveyed companies), Industrial Production (37%), Banking (34%), Transport, Logistics, and Tourism (31%), Oil, Gas, and Energy (29%), and Telecommunications (27%). Interest has increased in the Oil, Gas, and Energy (+4%) and Construction and Real Estate (+7%) markets. At the same time, there was a decrease in such segments as Government Administration (-6%), Wholesale and Retail Trade (-7%), Education (-7%), and Science and Research (-9%).
The global IT industry definitely has a strong impact on the development of the Russian IT market and the ways in which it reacts to the emerging challenges and demands.
- In 2014, the total global R&D budget increased by 1.6%, with enterprise software being at the top of the list (+5.7%). According to Gartner’s and IDC’s analysts, in 2015, IT expenses will decline due to the US dollar strengthening against other currencies.
- There is continuous growth in the areas of big data, cloud and mobile technologies, and social networks. The experts forecast a significant growth of global data transferring traffic (Compound Annual Growth Rate up to 2019 – 57%).
For the 12th year, RUSSOFT’s report provides software development companies and their customers with an opportunity to assess the situation in the Russian IT industry directly, receive information about main trends and challenges they might face, evaluate their own positions in the market, and (if required) adjust their development strategies. For more insights and information, please refer to the full version of the report here.