IT market of Kazakhstan

Digital Kazakhstan

Main article: Digital Kazakhstan

Internet regulation in Kazakhstan

Main article: Internet regulation in Kazakhstan

Internet of Things, IoT, M2M (Kazakhstan market)

Main article: Internet of Things, IoT, M2M (Kazakhstan market)

Smartphone Market in Kazakhstan

Main article: Smartphones (Kazakhstan market)

Processing of personal data in Kazakhstan

Main article: Processing of personal data in Kazakhstan

2022: Kazakhstan IT services market volume reaches KZT772 bn

The volume of services provided Kazakhstan in the field, computer programming consulting and other related services, at the end of 2022 amounted to 772 billion tenge (approximately 114.8 billion at the rubles average exchange rate ruble to tenge for 2022 according to the data) CENTRAL BANK OF THE RUSSIAN FEDERATION against 646 billion tenge for 2021. Of these, services worth 2.6 billion tenge (or 386.6 million rubles) were provided in rural areas. countries

In the regional context, the most services fell on the cities of Almaty - 380.5 billion tenge (approximately 56.58 billion rubles), Astana - 321.5 billion tenge (47.8 billion rubles) and Karaganda region - 17.1 billion tenge (2.5 billion rubles). The least services were provided in the Ulytau region (a total of 124.2 million tenge, or 18.5 million rubles).

In the structure of computer programming services, the largest volume fell on software development, which amounted to 373.7 billion tenge (approximately 55.6 billion rubles at the average Central Bank exchange rate in 2022).

58.2 billion tenge (or 8.7 billion rubles) was allocated for the management of information and communication infrastructure within the framework of the formation and development of state electronic information resources and systems.

The least services were provided in the field of cybersecurity - only 8.3 billion tenge (approximately 1.2 billion rubles).^[1]

2020-2021

Kazakhstan introduced a digital tax for foreign Internet companies

At the end of November 2021, deputies of the Senate of the Parliament of Kazakhstan adopted amendments obliging foreign Internet companies to pay tax for money earned in the country. The digital tax will be officially introduced from January 1, 2022. From that day, foreign Internet companies selling their goods and services in Kazakhstan will have to pay value added tax (VAT). Read more here.

Kazakhstan IT market valued at $1.35 billion

By the end of 2020, the volume of the IT market in Kazakhstan exceeded $1.35 billion, and the number of companies operating in the country representing this industry amounted to more than 10 thousand. Such data in November 2021 was cited by ComputerWeekly in an article on the development of information technology in Kazakhstan.

The publication says that the IT sector of Kazakhstan receives great state support, providing ample opportunities for the digital transformation of the state and commercial sector. The main of this large-scale development was the Digital Kazakhstan program, launched in 2018, as well as local technology centers created to support startups.

The IT market of Kazakhstan at the end of 2020 is estimated at $1.35 billion

Pavel Koktyshev, who previously worked as Deputy Chairman of the Board of the National Infocommunication Holding "Zerde," and by November 2021 the head of the fintech hub of the International Financial Center of Astana (AIFC), noted that the IT sector of Kazakhstan is an ever-growing ecosystem, including technologies for the public sector, smart city and finance.

The government provides huge financial and non-financial support to the IT industry, and the largest projects are being implemented for the needs of the state, he stressed.

Within the framework of the AIFC, there is a technopark of IT startups Astana Hub. Its chief operating officer, Abay Absamet, says the launch of the Digital Kazakhstan program and the creation of Astana Hub, the first platform for developing IT products for the non-state market segment, have become a big incentive factor.

By November 2021, 558 Astana Hub residents enjoy tax and other benefits. For two and a half years, they earned a total of 166 billion tenge ($383 million) and attracted $111.7 million in investments, grants and loans. Thanks to tax breaks, IT companies saved $34.4 million, these are good results that need to be developed, Absamet noted.

By November 2021, 558 Astana Hub residents enjoy tax and other benefits

The main objectives of the program were to accelerate the pace of economic development of the Republic of Kazakhstan and improve the quality of life of the population, as well as create conditions for the transition of the economy to a fundamentally new trajectory - the digital economy of the future, he added.

The article notes that the digitalization of the public sector has brought some success. More than 90% of public services in Kazakhstan by November 2021 are available digitally, they are used by about 10.7 million people every year, saving Kazakhstanis about $21.5 million.

The Government of Kazakhstan intends to increase the export of IT solutions to $500 million and train up to 100 thousand highly qualified IT specialists by 2025. In 2020, exports were measured at $33.6 million, and in January-September 2021 - $117.3 million, Absamet cites data. Such results were achieved through the creation of a catalog of IT products and a program for adapting such solutions to the needs of the markets of the USA, Europe, Southeast Asia, the CIS and the Baltic countries. In addition, Astana Hub interacts with large technology companies such as MTS, Yandex, Mail.ru Group, Sber and Huawei, he said.

Aidana Aituarova, CEO and co-founder of Cerebra, which develops AI-powered software for early stroke detection, says costs to enter the IT market in Kazakhstan are relatively low.

Because the IT market is mostly not mature enough, there are many opportunities to quickly build solutions, test, test and bring to commercial access without intense competition, "she said.

Mainly custom software solutions, proprietary products and equipment are exported from Kazakhstan

According to Pavel Koktyshev, by November 2021, Kazakhstan, if we talk about the IT industry, mainly custom software solutions, proprietary products and equipment are exported, and in the future the list will be replenished with scalable services, IT outsourcing services, freelance, etc.

Kazakhstan's IT companies have strong engineers, says Doszhan Dzhusupov, CEO of Parquor, which provides smart parking as a service. The fact that the founders of Yandex came from Kazakhstan is evidence of the high level of Kazakhstani IT specialists. The economic efficiency of R&D is the main force of Kazakh IT companies, he added.

IT companies in Kazakhstan receive many preferences from the government, which helps us develop rapidly, "says Zhandos Kerimkulov, CEO of EGISTIC, which offers a set of digital applications for agricultural management, ranging from procurement and search for personnel to leasing equipment and consulting services. - For example, EGISTIC is a member of the Astana-Technopolis special economic zone, which allows us to be exempted from a number of taxes. It is also relatively cheap to create IT products in Kazakhstan. The salary requirements for our programmers are not so high, because they work more on enthusiasm and for practical experience.

Koktyshev added that the Kazakhstan market gives startups the opportunity to pilot their developments and interact with large local and international corporations, and also opens up opportunities to enter neighboring markets like Russia, China, etc.

According to Absameta, the main problem for Kazakhstani IT startups is their orientation to the domestic market. Aituarova from Cerebra noted that for her company, the greatest difficulties are related to legal aspects, since Cerebra software works with medical data, so certification is required in each country.^[2]

Kazakh authorities develop ICT industry development concept

At the end of March 2021, the Ministry of Digital Development, Innovation, Aerospace Industry of the Republic of Kazakhstan presented the concept of "Digital Lifestyle (DigitEL)," which defines a vision for the development of the ICT industry and the digital sphere throughout the country.

The main idea of ​ ​ the concept is to ensure "high-quality, thoughtful, effective and transparent" interaction of the population and the business community with the state. For this, a mechanism for digital transformation in state bodies and optimization of state functions will be launched, solutions for infrastructure development in ICT, digital data management, etc. will be worked out, the document says.

It describes current (by March 2021) modern trends and key technologies of the future. Among them are artificial intelligence, IoT and 5G.

Kazakh authorities present ICT industry development concept

The ministry listed several reasons and conditions that interfere with the development of the Kazakh IT industry:

• there are gaps in the legislation of the country, in particular, there are no rules governing the process of digital transformation, reengineering and assessing the digital maturity of the public sector and the industry as a whole;
• one of the problems is the low use of digital tools in the manufacturing sector, which is due to a lack of understanding of business opportunities and the potential for using digital technologies;
• misunderstanding by individual government agencies and individuals of the benefits of digitalization carries a huge risk for the development of the country as a whole;
• in Kazakhstan, in many sectors of the economy, there is an acute problem with the availability of highly qualified ICT specialists;
• there is a problem with the use of unlicensed software. According to the results of the study, the BSA "Global Software Survey" (BSA Global Software Survey), the level of use of unlicensed software in Kazakhstan in 2019 was 74%.^[3]

2016

Kazakh e-commerce market grew by $100 million over the year

Since 2014, the Kazakh e-commerce market has grown by $100 million, its volume in 2015 is $800 million. Slightly more than 7% were revenues from online purchases from the total retail market, the volume of which experts estimate at $1.67 trillion, reports forbes.kz.

Konstantin Gorozhankin, President of the Association of Kazakhstani Internet Business and Mobile Commerce (AQIB), notes: "E-commerce is the only segment of the economy that shows growth in the current crisis due to lower resource prices." In 2015, experts noted the intensive development of online lending services, against the background of a decline in lending in the banking sector. So, the MoneyMan.kz for the year grew 4 times.

Data centers and clouds standardized in Kazakhstan

National standards for data centers and clouds are approved and will be applied in Kazakhstan from January 1, 2017.

The national holding "Zerde" within the framework of the application of the information and communication platform "electronic government" developed such standards as ST RK TIA-942-A "Telecommunications infrastructure of data centers," ST RK DSP-IS 0101_1.0.0 "Compatible clouds" and ST RK DSP-IS 0102_1.0.0 "Architecture for cloud management." On October 13, 2016, the Scientific and Technical Commission of Technical Regulation and Metrology approved them.

From January 1, 2017, according to the order of the Committee for Technical Regulation and Metrology of the Ministry of Investment and Development of the Republic of Kazakhstan, the standards come into force.

2014: Expert RA Kazakhstan

The revenue of leading Kazakh companies in the field of information and communication technologies in 2014 increased by 12%, but this is the merit of individual large players,^[4] believes^[5] experts of the rating agency RAEX ("Expert RA Kazakhstan"), which compiled the ranking of IT companies.

According to IDC, in 2014, the IT market of Kazakhstan in dollar terms decreased by 17.4% mainly due to a decrease in the supply of equipment and licensed software by 19% and 18%, respectively.

The market was poorly affected by the devaluation of the national currency and deteriorating external conditions - a decrease in oil and metal prices, the devaluation of the ruble and the decline in the Russian economy. These factors will put pressure on the market in the short term, experts say^[6].

Most participants in the RAEX survey tend to negatively assess the current market situation, which is a direct reflection of the situation in the economy. A number of companies demonstrate weak growth or decline in sales volumes, the reasons are most often associated with anti-crisis measures of potential customers and a decrease in investment.

According to the publication millioner.kz, in terms of revenue, the companies Logician"," Asia-Soft"" and "were in the top three. ERAM Revenue figures for the year first spirit rose 9% and 43%, respectively, while the third fell 45%. In total, seven companies entered the ranking.

According to the study participants, at present, cloud technologies, solutions for processing large amounts of data and mobile applications are developing dynamically, first of all. These trends were noted earlier, and are also characteristic of the global IT industry. Given this vector of development, the IT services sector is one of the most promising, due to stability and resistance to external imbalances. In addition, software development and IT services are the most promising sectors for the development of Kazakhstani companies.

Among the customer sectors, which, according to IT companies and experts, are the main drivers of growth, the state and quasi-public sectors, as well as the key oil and gas complex for the economy, are still most often noted. Financial institutions and telecom are mentioned a little less often. At the same time, the state affects the IT market not only as a customer, but also through economic development programs.

In particular, the Information Kazakhstan-2020 program creates rather large prospects for demand growth, the purpose of which is to create conditions for the transition to the information society.

The most significant factor restraining the growth of the IT market is uncertainty against the background of an external unstable economic situation. In such conditions, business, the state and consumers are forced to adjust budgets and expenses, both current and planned in the future.

2012: Expert RA Kazakhstan

According to a study by the Rating Agency Expert RA: "For the second year in a row, the IT market has maintained high growth indicators, while the dynamics is improving. The volume of sales of IT companies that took part in our study increased by 38% in 2012 and reached KZT48.8 bn. 9 out of 11 ranking participants showed revenue growth, which indicates a positive mood in the industry. Obviously, in the last couple of years, the market has recovered from the crisis and started to recover rapidly. "

2011: J’son & Partners

In October 2011, J'son & Partners predicted that the total IT market of Kazakhstan in 2011 will amount to $750^[7].

2010: IDC

• Kazakhstan's IT market, the largest information technology market among Central Asian countries, increased by 32% in 2010. It will also maintain a significant growth rate over the next few years. This was announced by IDC.

Philippe de Marcillac, IDC Vice President, said: "We have every reason to believe that the strategy and investment of the Kazakh government can put the country on a par with the growing economies of the BRICS and VISTA countries in terms of potential for growth."

In general, the economy of Kazakhstan is also developing rapidly. GDP growth in 2010 was 7%, the government outlined ambitious goals for the growth of this indicator for the coming years. According to the country's innovation program, one of the key components of the "economy of the future" is the ICT sector.

In addition, the Kazakh government is aware of the need to transform the methods of using modern electronic technologies and services. IDC Manager in Kazakhstan Andrey Beklemishchev says that "government support and readiness for change determine the main drivers of the country's IT market growth for the next five years.

Also, IDC materials say that Kazakh IT users are closely following international IT trends and are very interested in new technologies.

• In the first half of 2010, shipments of laptops in units increased by 157.3% compared to the same period in 2009^[8].

In general, in the first two quarters of 2010, the IT market in Kazakhstan, according to IDC estimates, increased by 81.3% in unit terms and almost doubled (an increase of 89.2%) in monetary terms compared to the same period in 2009.

The Kazakh IT market is noticeably "skewed" towards hardware, which accounts for about 80% of sales.

Market Structure by Segment

Equipment deliveries

According to IDC, as of 2010, the equipment market in Kazakhstan occupies a leading position and accounts for 79% of the entire IT industry. As the standard of living in the country grows, the demand for equipment is shifting to more expensive segments, and the positions of the "gray" market are gradually decreasing.

Today in Kazakhstan there are about 30 companies specializing in the sale of hardware. However, the main market is divided between several large hardware suppliers, such asLogicom, White Wind, Alser and Arghims. The share of one "White Wind" of the total sales in the republic is 25-30%.

IT services

As for IT services, this market segment is in second place after hardware. According to IDC, this segment occupies 14 % of the Kazakh IT market. According to the Agency for Statistics of the Republic of Kazakhstan, among all types of services among Kazakh users, advisory services on software development and maintenance are in particular demand. This is followed by services related to the repair, supply of computer equipment and the development of Internet sites. Most of Kazakhstan's IT companies specialize in services, the profit from them is 43.8% of the total income level in the IT market.

2009

According to the results of 2009, a decline was recorded in the IT market of Kazakhstan: the volume of sales of the PC segment decreased by 25.5% in unit terms compared to 2008 and by 35.6% in monetary terms. Moreover, it fell below the results of 2006.

Notes