| Are you interested in knowing who holds the keys to | | | | compared to India's 80% of global market share, |
| the future of IT? Me too! Consider this. According to | | | | Russia looks small with its tiny 3%, however the |
| the Moscow Times, in 2006 Google held its annual | | | | potential is strong, as it's boosted by a growing number |
| Global Code Jam, which brings programmers from all | | | | of IT graduates, strong education system and better |
| over the world to compete with the same problem | | | | infrastructure level. |
| online. And these tasks are not a joke, but rather | | | | All these major developments were conceptualized in |
| made for die-hard programmers. What's your guess | | | | the giant Russian presence at CeBIT, the annual IT |
| about the winners? (True, I was a bit biased and | | | | trade show held in Hanover, Germany. This year |
| thought that Russia would be among the top | | | | Russia was the official CeBIT country partner. The |
| programmers.) And that's exactly the case, a Russian | | | | Russian Pavilion showcased some 150 exhibitors |
| programmer won the award. In fact, among the 100 | | | | including major Russian IT, IT consulting, outsourcing |
| finalists were 33 Russians. Other significant "youth | | | | and information security companies. The Pavilion was |
| powers" included twelve Chinese, seven Americans, | | | | supported by high ranking government officials, including |
| six Germans and three Canadians. Surprisingly, not a | | | | Vice-Premier Naryshkin and Minister Reiman who |
| single Indian made it there... | | | | proudly escorted German Chancellor Angela Merkel |
| Given all that brain power, it's no surprise that the | | | | around the booths of participants. Minister Reiman was |
| results of IT market developments in Russia, most | | | | upbeat, announcing that Russian IT exports totalled |
| prominently outsourcing, are quite promising. According | | | | USD 1.8 billion in 2006 and in the next three years |
| to Leonid Reiman, Russian Minister of Communications | | | | would grow to USD 10 billion. |
| and IT, the growth of the Russian IT market overall | | | | Of course, who's without sin? There are a number of |
| grew to USD 13.6 billion in 2006, which represents a | | | | issues that inhibit faster development of the IT sector |
| 17% growth y-o-y. 23 million PCs (33% growth) and | | | | in Russia. Lack of marketing skills and global |
| 25.1 million users (15% growth) were recorded in | | | | experience, high level of piracy and insufficient venture |
| Russia in 2006. Russia awaits a boost from digital TV, | | | | capital funding represent major obstacles. Let us look |
| total Internetization of the school system and | | | | closer what is happening in the latter. |
| techno-park development, said the Minister. | | | | High Tech Investments Set to Grow |
| Techno-parks alone should bring production output | | | | In Russia in 2006 some ten investment funds |
| worth USD 4 billion, while total revenues from IT sector | | | | specialized in the high tech industry. Those IT |
| should jump to USD 40 billion by 2010. | | | | companies that were favored by investment funds |
| The true cash cow of the Russian IT sector has been | | | | were mature and successful IT businesses, says |
| its IT outsourcing (ITO) sector. RUSSOFT reported | | | | CNews Analytics. Currently the situation has been |
| that Russian software exports grew by almost 54% | | | | changing, as more and more funds look seriously into |
| and reached USD 1.5 billion in volume in 2006. During | | | | smaller prospective companies. |
| the past five years the Russian ITO services market | | | | In May 2006 the Russian Ministry of Economic |
| grew 30-40%. Russia is just behind India and China in | | | | Development and Trade announced the winners of its |
| terms of best off-shoring locations in market volume. | | | | tender for management of five state and private |
| RUSSOFT singled out that over 50% of the market | | | | venture funds that have been created in Russia. The |
| volume was generated by Moscow and St. | | | | state plans to co-invest in the funds managed by |
| Petersburg companies, with others located mainly in | | | | private companies. According to the tender terms, |
| Novosibirsk, Nizhniy Novgorod and Yekaterinburg. | | | | 25% of the venture fund capital will be federal funds, |
| NeoIT company estimated that this year the growth of | | | | 25% regional, and 50% private capital. The winners of |
| outsourcing industry will reach 40-45%. | | | | the tender are large Russian investment companies, |
| Intel Russia President Steve Chase recently was | | | | including Alliance ROSNO Asset Management, Troika |
| quoted by Reksoft IT Quarterly as saying that the | | | | Dialog and Monomakh, reports CNews Analytics. |
| outsourcing market "is going to reach a billion dollars | | | | These funds are aimed at increasing investments in |
| this year. People know you have to be in Russia | | | | innovation, lowering risks of private investors and |
| because it's a very fast growing market." The US IT | | | | creating venture capital in Russia. |
| giant has invested $700 million in Russia in the last 15 | | | | While interest in high tech companies is growing, many |
| years, while other companies like Boeing, Motorola, | | | | investment funds are somewhat cautious and start |
| Google and HP added their R&D centers in | | | | considering companies seriously only when a |
| Russia. | | | | company's turnover hits USD 5-10 million, and |
| As the Moscow Times reported, Epam and Luxoft, | | | | capitalization grows. Yet, local investors constitute a |
| the leading Russian outsourcing companies, employ | | | | major share of those who invest in small and start-up |
| about 5,000 people and their total revenues in 2006 | | | | IT companies. |
| reached USD 148 million, a 45% growth y-o-y. When | | | | |