The Russian software developers association (Russoft) revealed the results of the latest Russian IT market research.
In 2008, the total Russian export of software development and services was worth $2.65bn, second only to India. Russian companies continued to explore the high-technology development niche, which demands in-depth knowledge in mathematics and related sciences. Combined revenue for all Russian software companies from the sale of software products, software development services, system integration and IT support services reached approximately $5.5bn.
2008 saw a reduction in the growth rate for exporting software and services, with total exports only growing by 21%. This is the lowest increase for any researched year so far, although it remains one of the highest export growth rates in the world. The compound annual growth rate (CAGR) from 2002 to 2007 was 44.3%. For 2009, a still lower growth rate is expected - between 8% and 13% - after which export rates are expected to start climbing again, to between 18% and 20% in 2010.
Export structure has continued to evolve, especially relating to the increased rate in sales of programming products and turnkey solutions. According to figures for 2008, sales growth reached 26%, and the export of products and turnkey solutions was worth $800m. The export of software development services as a whole rose by 16%, to $1.45bn.
The downturn has diminished acute personnel problems. According to results from spring 2008 to spring 2009, the average industry wage for software specialists has decreased by about 20%.
Personnel attrition rates will remain low at 9%, according to 2008 statistics. The low rate of employee turnover is one of Russia's main competitive advantages on the global IT services market.
As expected, 2008 saw the significance of Russia's export market for software development and services continue to grow. The portion of respondents mentioning the completion of projects in Russia as a main industry trend grew still more than in previous years - from 55% to 87%. The significance for respondents of CIS countries' markets also increased.
The saturation of the Russian IT market is prompting Russian software companies to focus on new markets. The most important overseas markets for Russian companies remain the US and Europe.
From spring 2008, total declared investments in start-ups and small high-technology companies increased significantly. There was a rise in both public sector investment (through state corporations and venture funds) and private sector investment (by overseas corporations in particular). The next few years should see a whole range of new providers of solutions and programming products that began as start-ups between 2007 and 2008.
Russoft president Valentin Makarov noted that the events of the last year have brought the industry a number of benefits, prompting companies to optimise their structure and reduce costs, especially those relating to office rental space and personnel. The devaluation of the ruble against the dollar also had a positive effect on the competitive ability of Russian exporters.
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