In November, RUSSOFT, an association of Russian software development companies, published its 11th annual survey on the Russian software development export industry.
This report is the most comprehensive and reliable source of information on industry dynamics, its position in the global market, and the most relevant development trends. In this article, we have highlighted the most important points from the report. To download the full version of the report, follow the link.
Overall State of IT Industry in Russia as of End of 2013
- The cumulative turnover of Russian software development companies reached $11 billion (16% more than in the previous year).
- The export growth of the Russian software development industry was 17% more than a year before (export value reached $5.4 billion). Export of software development services increased by 20% up to $2.5 billion, export of licensed software grew by 18% up to $2.35 billion, and the volume of export of R&D centers of foreign corporations increased by 11% and amounted to $550 million.
Auriga is consistent in securing a spot among the leading outsourcing companies according to rating agencies. In the last six years, the company has been included in the lists of the best outsourcing providers according to both the Global Outsourcing 100 and the Global Services 100.
- The share of Russian software in the entire Russian export volume exceeded 1% (for comparison, this share was 0.8% in 2011 and 0.88% in 2012).
- The positions of Russian service companies in international ratings, such as the Global Outsourcing 100 and the Global Services 100, strengthened. In the reporting period, nine Russian companies were included in the Global Services 100 list and six companies were selected to the Global Outsourcing 100 list.
Major Results and Trends of the Russian Software Development Export Industry
- The results of 2013 demonstrate that each company that participated in the survey is focused on three or four markets with one or two of them being key markets.
- In the last few years, there has been a significant reduction in the market share of offshore destinations; software development companies now focus more on the Russian and CIS countries’ markets that have become more attractive in this period.
- Despite the reduction in market share, the North American market remains the second largest based on market presence (after the Russian market, 91% and 41%, for the North American and Russian markets, respectively). Moreover, it is the third largest based on the number of companies that named it as the key market (only 10% of companies named this market as a key one for their business activities).
- Russian software development companies continue to expand into new geographic markets, including Latin American countries, Vietnam, Mongolia, the Philippines, Zimbabwe, Nigeria, South Africa, India, China, Nepal, and other countries.
- The main vertical markets for software development companies are Information Technologies (75%), Industrial Automation (40%), Telecommunications (35%), and Public Administration (34%). There is an increased interest in such segments as Education, Science and Research, Healthcare, and Pharmaceuticals.
The changes in the global landscape of the IT industry definitely shape the changes and trends of the Russian IT market.
- There is continuous growth in the areas of M2M, mobile technologies, cloud services, social networks, and systems for big data analysis.
- RnR Research forecasts that in the next six years, the market of technologies related to contactless sensors and gesture recognition will explode. By 2020, the volume of this market will reach $22.4 billion.
- In 2013, the global market of security solutions increased by 5% and amounted to $19.9 billion. Russian companies are traditionally strong in this area and have a very good worldwide reputation.
The research also contains detailed data on such issues as human resources and the labor market and demand for technologies. 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.