Index of articles

Carmel University publications, December 2000

Russia: Software Development

By Timothy H Clinton

Due to the high level of educated Russians, especially in math and engineering, the flourishing of software programming in the Russian Federation is not so surprising. Software seems to be one area where the Russian people tend to excel in the IT landscape. According to McKinsey Global, the Russian software market can, with obvious exceptions, be characterized by small scale operations and lower value products and services. They run the range of customization, localization, translation, distribution and technical support. According to Brunswick Warburg, in 1999, Russia conducted $70 million in offshore programming services with an annual turnover $560-580 million. McKinsey further reports the Russian business of offshore programming is growing at 50-60% per year and is expected to be able to obtain this requisite track record and international certification and become a force in the world offshore programming market, for example, along with India (Lakaeva, US Commercial Service, 2000).

Russian software programmers are attractive to overseas companies due to very well educated programmers and engineers with extremely sound fundamentals who will work for much less than their Western counterparts. They work both abroad and at home for foreign corporations producing new algorithms and code for use in proprietary software. Russia has been known recently as a software offshore programming haven, usually in and around the academic institutions of Russia, helping to alleviate the much needed programming demand from countries around the world. This trend may lead to export led growth in the future as approximately 50% of domestic production is sold abroad. Russian programmers can make significantly more money and have steady incomes, unlike most in Russia today, while they work for almost 40% less than their Western counterparts. The current situation is a win-win solution, but still falls short of elevating the worldwide shortage of IT savvy professionals.

A great indication of the relative strength of the Russian programmers was proven in 2000 at the International Collegiate Programming Contest World Finals put on by the Orlando, Fl. based Association for Computing Machinery. At this competition, a team from St. Petersburg won the event, and another 4 teams from Russia placed in the top 15. All of these teams placed better than the teams sent from Cornell, Harvard and Duke.

Within the last two years, Russian IT companies have entered the turn-key Internet software solutions market combining widely spread database management systems (DBMS) with more sophisticated object-oriented DBMS and e-business technologies. These include web publishing (content management), e-commerce applications (web catalogs, ordering and payment systems, back integration to ERP and B2B systems, and Internet banking), BackWeb push technology and others. The companies offering e-business solutions for clients represent 1) software development centers of mature IT companies; 2) ISPs units that provide value-added services to its subscribers; and 3) independent web application/design companies. The number of the latter is growing fast and they present a considerable competitive threat to IT majors who are rather slowly entering Russian e-commerce solutions market (Nazarova and Lakaeva, US Commercial Service, 2000).

What stops the majority of Russian programmers from starting their own software businesses is their lack of market understanding and how technology works in the new economy. So in the mean time most are working for major international firms, such as Motorola, HewlettPackard, Philips, Microsoft and Intel helping to produce some of the most complex and contemporary code used in today's technology environment.

 Previous article
Back to the index of articles Next article 

Read comments on this article posted by Intelligence-Soft web site visitors:

No visitor's comments on this article are posted so far.
Use the form below to become the first who posted his/her opinion here.

Post your own comments on this article:

Share your thoughts about the article above with other visitors of Intelligence-Soft web site but please respect them and follow our Rules of posting visitor's comments.

Nickname:      Real name:*
Country/City:      E-mail:*
*Your real name and e-mail address will not be shown to other visitors. We ask you to provide your name and e-mail in order to identify the author of the posting for your possible future requests, for example, if you decide to change or remove your comment one day. Read our Privacy statement to learn how we handle your personal data.

 Previous article
Back to the index of articles Next article 

Project Management  ||  Software Department  ||  Mobile application development  ||  Business Model
News  ||  Offshore Development  ||  Articles  ||  Testimonials  ||  Contacts  ||  Post Your Project
Site map  ||  Privacy statement

Valid HTML 4.01!     Valid CSS!