Reksoft blog

10.04.2012 by Svetlana Vronskaya

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Russia has climbed 20 positions in the Global information Technology Report 2012 made public at the World Economic Forum.

The Russian Federation is one of the Best Performers in Central Europe this year, rated at 56^th position overall and 32^nd in the Networked Readiness subindex of the report that evaluates the level of infrastructure and digital content, skills and affordability of ICT. This is recognition of the consistent effort in ICT infrastructure development in Russia and its availability to customers nationwide.

While the authors point to the classic feature of Russia’s ICT — infrastructure weaknesses in remote regions — this mainly reflects the fact that Russia is a huge country with enormous variability between geographies, population density, industrial presence and culture.

The second and a more important observation stated in the report is the fact that the Russian Federation maintains pockets of scientific excellence, but unfortunately they do not seem to spill over into the production sector. Moving forward, in addition to continuing to upgrade and develop their ICT infrastructure, Russia needs to improve the quality of its educational systems and build effective innovation systems with the active participation of the private sector.

Improvements in these three areas should go hand in hand with stronger economic impacts associated with higher rates of innovation and the development of more knowledge-intensive activities.

Russia is also listed as a digitally advanced economy. The countries in this list have made significant strides in addressing ICT usability and developing a talent base to take advantage of available technologies, products, and services while improving the speed and quality of digital services.

The full index is available here — http://www3.weforum.org/docs/Global_IT_Report_2012.pdf

26.03.2012 by Svetlana Vronskaya

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Advancing 32 positions in the world rankings, the Russian Federation leads all other Eastern European countries according to the United Nations e-Government Survey 2012.

It might sound surprising, but not if we bear in mind Russia’s long-term plans. In 2006 the Government of the Russian Federation adopted a new version of the e-Russia Federal Target Program (2002-2010) to improve the efficiency of government operations and enhance services for citizens. The past three years have seen progress both in online service delivery in Russia and in legislation set to improve the business environment for IT companies.

Some of the most visible projects are the National Government Portal of the Russian Federation (government.ru) and the Portal of Public Services (www.gosuslugi.ru). Government.ru has been modified and redesigned and now looks very solid and easy to use, with links to all ministries/agencies and rich technical features. The public services portal provides a single point of access to all references concerned with state and municipal services, via the Internet, and provides citizens and organizations with the opportunity to receive these services electronically. According to UN estimates, monthly visits by users of the public services portal range from 200,000 to 700,000, and this is expected to rise further still. Reksoft is proud to be part of the project for co-developing the portal.

The Federal Government is also continuously active in supporting IT and high-tech sectors. Among federal legislative initiatives aimed at helping the IT industry to grow, the most important is the Social Tax reduction from 34% to 14%. Although the criteria to apply the law are still fairly strict (90% of the company’s revenue must come from software development and a number of employees should exceed 30), the positive impact of this tax incentive has already been felt and has brought considerable savings for participants.

There’s also been support for IT from local governments. For example, in St. Petersburg, assistance has come from the Committee of Economic Development, Industry and Trade with reimbursement for education in technology areas, and administrative help with new projects in IT education (like the IT Academy founded by the Russoft association). Another initiative fully supported by St. Petersburg authorities is the development of an IT cluster and its back-up in search of federal funding.

However there remain issues that hinder the further development of e-Government in Russia. As the largest country in the world consisting of eight federal districts, the development of e-government in the Russian Federation can be a slow process. Although the standards for informatization have been crafted and put in place, the majority of federal districts lag behind in implementing modern information management systems.

The new government to be formed by the newly elected president Vladimir Putin will most probably be busy with more urgent matters, but the trade IT associations such as APKIT and Russoft will certainly push the authorities to validate numerous proposals for improvements in the IT environment in Russia.

13.03.2012 by Alexander Kirilkin

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Barcelona’s MWC has been constantly hitting participation records - just imagine these 67,000 visitors this year. But what is truly noteworthy is that despite massive presence of mobile phone manufacturers, MWC stays a unique place to review actual trends in and around telecommunications and specifically in mobile sector. We at Reksoft focus on the mobile solutions and services, so we will follow only those topics that are in the area of our expertise.

Compared with the previous year’s show, this year congress was not too handset driven. In 2012 we have been introduced to a few trends that drop a major call to anyone on the telecom market. Their implications will require renewals of the existing business models and a wider look on cooperation among market players.

Pushing on smartphones usage and a further growth in data traffic consumption set new challenges to operators and make them extremely keen on capitalizing on their current key assets - network and customer data. Challenges for carriers here are quite severe.

According to the latest Ovum estimates, operators lost $13.9 billion in SMS revenue in 2011, as a result of their customers using services like Twitter and Facebook to send messages.

Over-the-top players (OTTPs) create a constant pressure on carriers - remember a TeliaSonera call on charging an extra fee for using free over-the-top VoIP services in its network and throttle bandwidth for users who try to use these services without paying.

M2M and NFC are still in the ‘great opportunity’ mode and implementations require standardization, clear models and functional enrichment.

While normally carriers suggested making their messaging and other services more collaborative by entering deeper partnerships with social networks, as a response to messaging revenue fall-off, this year brought a new potentially big thing. GSMA re-introduced rich communications by launching a new Joyn brand together with a few equipment manufacturers and a dozen of large operators. Joyn aims to become a platform that allows users to send IMs, have presence information, use video, etc. on any mobile device they have.

At the same time operators reflect on how to intelligently control over-the-top players (OTTPs). Since OTTPs are not commonly paying to telco operators for using their networks, new billing solutions are to be introduced to make offerings attractive for OTTPs as customers.

With metadata analytics, the customer experience, and over-the top business models as main topics, the congress also presented latest trends in data analytics, which would allow turning user data into the new operator currency.

Smartphone usage and M2M were presented as the key examples of the opportunity available to operators. Long awaited NFC manifested a slow growth but no significant breakthrough is still visible.

Cloud models have been less on show this year, most probably because they became a common practice. Interesting trends in emerging markets underlined the potential for feature phone-based solutions and showed how the scarcity of fixed internet in their regions has led to an immense opportunity for mobile internet growth.

Reksoft has been serving customers in telecommunications for the last 20 years and possesses a specific focus on mobile solutions and services. Reksoft provides a spectrum of software solutions in messaging, security, roaming, traffic optimization, mobile device management and verticals specific areas to the market for telecoms in the CIS countries . Among Reksoft clients are leading CIS telecoms - Megafon, VympelCom (Beeline), Kyivstar, and Tele2.

29.02.2012 by Anna Datsko

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Last week, several senior Russian politicians attended a meeting at the Novosibirsk Technology Park Science Campus with a view to improving the efficiency of public administration through information technology, and other related issues. Also present were representatives from a range of science- and technology-based spheres, including Valentin Makarov, President of RUSSOFT, leading IT association that promotes the interests of Russian software companies.

e-government

One of the most significant government initiatives of the last few years is the development of an e-government strategy. It was no surprise then that extending the maximum potential capabilities of modern information technology to improve the efficiency of the State was on the agenda. The large-scale computerization of government agencies was hailed as ‘a significant resource for strengthening the national economy, increasing investment attractiveness of the country and, of course, the most important condition here – an effective modernization of the social sphere, [with] qualitative changes in health, education, and the social protection system.’

Ministers calculate the under the new system, government agencies perform from 50 to 100 thousand requests a week online. This means that tens of thousands of people have been saved from running around the chain of command.

One other function of the widespread introduction of information technology will be to provide simpler and more transparent communication between citizens and the power structure; this is a real and very effective anti-corruption measure. Electronic government initiatives have been undertaken by several Russian software providers, including Reksoft, who have performed a number of important projects for the Federal Migration Service.

RUSSOFT and global markets

RUSSOFT president Valentin Makarov’s suggestion of creating a single body which would be responsible for the support of Russian firms’ foreign economic activity was accepted at the meeting. This body would also include a fund to support high-tech imports and exports to improve access to global markets, and make it easier to bring high-tech hardware and equipment into Russia.

The main tasks now are to identify which products should be supported and why. As so often with government funds, the devil is in the detail: isolating appropriate products involves nurturing relationships with specific developers and manufacturers.

But Russian software companies will be happy that their adventures in outsourcing will be strengthened by this commitment from the government. It suggests that Russia’s economic dependency on its energy reserves is giving way to an emphasis on high-tech exports. Ministers expressed their willingness to fully support the whole spectrum of IT technologies, especially as demand for high-quality, advanced design has consistently increased both in Russia and abroad, in corporate and public life.

Tax relief

One of the main topics under discussion was related to extending tax relief for IT companies to create a more favourable taxation environment. Currently, the tax burden is lightest on those companies with operations within Russia’s designated Special Economic Zones (SEZ). This follows a similar strategy to that applied in India and China. Elvira Nabiullina, Russia’s Minister of Economic Development and Trade, was urged to look into the possibility of extending the range of exemptions and creating additional SEZs.

Prior to the meeting, however, the Ministry of Finance had sounded a note of caution, noting that further tax relief could ‘create a non-competitive environment’ for those businesses working in the same industry but outside industrial parks, who would not receive the same level of government support. This is a difficult balancing act for the government, and keeping both sides happy is not easy. Thirteen such specialised sites, including the one in Novosibirsk, have already been set up and since 2007, 5.5bn roubles (just under $200m) in investment has been delivered via direct government funding.

In a similar story, Natalia Kasperskaya, CEO of InfoWatch, brought up the need to further reduce the threshold number of IT employees needed to trigger savings in social tax. This proposal was accepted, and will protect smaller IT start-ups in their most vulnerable state. Start-ups in the high-tech sector will be able to receive government subsidies for five years, since many projects involve products that take years to be developed such as complex corporate systems.

All in all, it was a positive meeting for the Russian software industry at a time when its leading members are consolidating their leading position on the world stage.

27.01.2012 by Andrei Maiboroda

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At the recent Think Tank IT Transformation conference in Berlin, Reksoft held a roundtable discussion entitled Cultural Difficulties in International Software Projects. The discussion was attended by more than 20 CIOs from leading German companies.

We listened as the participants enthusiastically shared their experiences of building successful – and not so successful – cooperation in various cultural contexts.

Aside from traditional outsourcing locations such as India, the Philippines and China, roundtable participants also drew on their experience of a wide range of Eastern European countries, including Romania, the Czech Republic, Russia, Ukraine, and Armenia.

Each country, we heard, offered its own challenges in communication and understanding.

Cultural aspects of working with different locations of outsourcing

• Czech Republic is considered a very safe choice, after some initial issues with trust
• Armenia performs well and punctually, thanks to the presence of a bilingual German manager in the country
• Romania boasts a high level of skilled development, but suffers from pirated software and unstable politics
• Chinese development is fine, but issues emerged with English-speaking and non-transparent communication, such as problems with late reporting
• Russian companies boast high staff qualifications, but not always transparent communication. Though sometimes slow to report problems, Russian companies will work around the clock to get the project ready on time, demonstrating, in the words of one participant, ‘a fantastic commitment to meet project deadlines’.

In response to the anecdotes from the roundtable, and based on our 20 years of industry experience, we made 5 recommendations for working with Russian software development companies.

1. Put a face to the name
   Aim to visit your outsourcing partner 2-3 times a year to establish effective relationship. Nothing beats face time.
2. Build a team scheme
   Establish and maintain an effective, bilingual communication scheme. That way everyone knows who’s doing what.
3. Provide a smooth transition
   Appoint a bilingual transition manager to interface between German and Russian teams. This keeps things ticking along nicely.
4. Loosen your tie
   Informal communication is the key to cooperation. Nothing binds two teams together like it.
5. Put it in writing
   Russians are resourceful and can work from verbal instructions, but a written agreement ensures everyone is on the same page.

16.01.2012 by Igor Kravchenko

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The way Russian outsourcing companies’ make their money from overseas markets – their export income structure – has undergone nothing short of a paradigm shift.

In accordance to annual RUSSOFT survey, last year, custom software development projects made up an overwhelming proportion of their revenue – 72%. Such projects are generally outsourced by Western companies to resolve a single specific non-core-business issue and are typically extremely narrowly defined. What used to be known as offshore programming was essentially software development to order, like a takeaway pizza with particular toppings stipulated by the client, and it seemed like it was a comfortable and undisputed leader-for-life.

But 2011 has not been kind to leaders-for-life, and this year, the share in revenues of custom software development plunged by almost a quarter, to 49%. Taking its place meanwhile, the share of software solutions development and adoption considerably increased, from 11% to 30%.

One important reason that lies behind the transition from custom programming to client specifications to more difficult projects based on program engineering is the improved positions of Russian service companies in international rankings. Western companies see them as global market leaders and are confident in entrusting their complex systems to them for enhancement.

But perhaps most significant of all is the Russian e-government state initiative, begun in 2009 and now coming of age as it moves into its mature phase. Quite simply, those companies invited to become involved in this huge and lucrative project have made great strides in strengthening their capability to build complex.

I believe it’s no exaggeration to say that what we’re building now is a unique project, not just in Russia but on a worldwide scale. It has huge export potential, because no one has done anything like this in the same way before. Perhaps it’s because as a country we started the e-government experience a little later that we were fortunate to be able to use the very best global practices from the beginning, rather than trial and error.

As befitting such a huge country, even the pilot projects were vast: 9 million people in five different Russian regions were the first beneficiaries of Reksoft’s Territory project for the Federal Migration Service, which entailed the development of a mechanism for providing public services online after first standardizing them in an electronic format. And when Reksoft followed this up by winning the award for Best Interactive Federal Service in the Top 10 Public Sector Projects this year, it only cemented the company’s position as an expert in building the most complex systems.

In Russia today, e-government touches just as many people as gas and oil. More than 300 services provided by 56 federal agencies, including the pension, tax and migration agencies, have been made accessible to the population via online portals in a little over three years. For those companies that have worked to make this possible, the shift from custom software development to more complex program engineering has proven exciting, profitable – and irreversible.

14.11.2011 by Sergey Kuznetsov

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Possibly, the greatest merit of this Software Engeneering conference in Russia is very little advertising and PR actions on the part of large industrial vendors like IBM, Microsoft, Oracle, etc.

SECR is a kind of cartel-type elbow rubbing of professional software developers. That is exactly the place for discussing issues common for the business.

However, there is no way to discuss all the problems of the industry over just three days. This probably is the reason why the conference is of a fragmentary and perfunctory nature and, consequently, not very interesting for profound professionals. As a rule, they hold more representative special-purpose events.

Neither is it very interesting for beginners who can hardly practically benefit there. This is why, as a rule, those attending SECR include professionals of long standing and wide outlooks. There is no way for one to bet they will come again next year. Yet this year, the conference took place indeed. There was not a single technical blunder and there was stable WiFi. Contributors were interesting. Discussions were held in good new formats and covered important matters.

Good luck, CEE-SECR 2012!

Central & Eastern European Software Engineering Conference in Russia, CEE-SECR, Oct 31 – Nov 3, Moscow

Some facts: bank day and 3 main days, about 300 participants,
about 80 talks and discussions in the following areas:

27.10.2011 by Elena Lysyakova

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The Forbes magazine has published a list of 50 Russians who changed the world and became successful not only in Russia but at international market as well.

Along with the most brilliant art and sports figures, the list contains names of scientists who achieved outstanding results in physics, mathematics and other exact disciplines and the founders of half a dozen IT companies. Venture fund investors are mentioned in the list as well.

The story of Max Levchin who, despite being just 36, owns a considerable fortune earned while developing and promoting various Internet services, is among the most glaring examples of success. In 1998, Mr. Levchin and his partners founded Fieldlink, the world's best known electronic payment system, later renamed PayPal, Inc. The project having been purchased by eBay, Mr. Levchin launched another soon to become well-known project named Slide, a photo exchange service intended for social networks, which was later acquired by Google.

The example of Mr. Levchin's success in an IT business abroad is no exception. The ABBYY FineReader text recognition system and the world-renowned Lingvo electronic dictionaries were developed by Russian entrepreneur David Yan. His compatriots also developed the Acronis software. Ratmir Timashev and Andrei Baronov created various games for social networks. There were also others like them.

What is worth noting is that the ages of the scientists Forbes named as the best vary depending on the fields they work in. While all those chemists, biologists and physicists are over 50, the Russian IT scientists named among the 10 rating the highest are way younger.

14.10.2011 by Galiya Sayfutdinova

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According to analysts at PMR, the Russian telecommunication services market has returned to and grown beyond its pre-crisis level. Stable growth is forecast for the near future and the market may be worth up to 30 billion euros by 2012.

PMR published a report on the Russian telecom services market for 2010 and made forecasts for 2011-2012. They estimate that the market grew by 17.3% to 27.3 billion euros in 2010.

In 2008 the market was worth 26.2 billion euros, which dipped during the 2009 crisis by 11.4%. Prior to this, the market had demonstrated a steady annual increase, sometimes exceeding 30%.



Analysts predict market growth of about 7% to 29.1 billion euros in 2011, and 5.7% to 30.8 billion euros in 2012. The main drivers of this rise will be growing Internet services in both fixed and mobile networks.

In comparison with Central and Eastern Europe, Russia enjoys a number of strategic advantages for growth. PMR drew attention to its vast area, huge potential for infrastructure development, and territorial coverage." Because of this, almost all providers of wired and wireless technologies will have a chance to carve out a niche here.

Russia’s overall economic growth continued to be one of the drivers for telecom services market growth in the country, according to PMR. Demand for these services crept up after the 2008 crisis. And in 2010 the operators have also increased investment in new networks and improving the quality of service.

Reksoft, being a leading provider of software development services for Telecom, also sees a significant demand growth from this vertical.