Ranking of TAdviser: 50 most profitable representative offices of the foreign IT companies in Russia
In October, 2019 TAdviser for the second time made a ranking of offices of the foreign IT companies in Russia on the basis of the volume of their revenue and came to a conclusion that business of large foreign vendors grows in the country.
The list of TAdviser included 50 suppliers of computing and telecommunication equipment, digital equipment, the software and also IT services and data centers. Their local legal entities were ranged on total revenue in rubles on the basis of the analysis of the accounting records for 2018 which are contained in base " circuit.focus ".
At some IT companies more than one legal person in Russia, revenue-generating from IT act. In this case their turnovers were summed up.
At the list there are only those companies, whose financial results of activity for the specified period were published in open access. This time in the list there were vendors on which revenue for 2017 is publicly unavailable: in particular, Oracle and Hewlett Packard Enterprise (HPE). On them data for 2018 appeared.
It is important to make the clause at once that the indicators provided in a ranking do not reflect whole revolutions of business of these companies in Russia: many contracts are signed directly with their foreign offices. So, for example, in ZTE say that data on their company "not complete" as do not reflect revenue under contracts between the Russian customers and directly the headquarters in China. Or, for example, Microsoft at which business in Russia is performed via the partner channel: partners, to offer customers products and services of the company, sign the agreement directly with Microsoft Ireland Operations Limited (MIOL).
Earlier the top manager of one of the largest integrators working with a large number of vendors expressed to TAdviser opinion that, the more importance the foreign IT company gives to the Russian market in terms of business development, the she will carry out bigger sales volume through local office.
In total through the Russian offices of the foreign IT companies which are present at a ranking in 2018 there passed about 967 billion rubles. The total turnover of legal persons on whom there are data both for the 2018th, and for 2017 grew almost by 27% in relation to 2017. In 2018 their consolidated revenues were about 946 billion rubles, in 2017 - about 746 billion rubles.
The most profitable representative offices of the foreign IT companies in Russia
|Name||Revenue in 2018 (thousand rubles)||' Revenue in 2017 (thousand rubles)'||Dynamics|
|1||Apple (OH"Apple Rus")||197,249,077||151,926,499||29%|
|2||Huawei (Huawei Technical Company LLC)||132,309,675||61,726,741||114%|
|3||LG Electronics (LG Electronics of RUS LLC)||81,828,000||76,190,361||7%|
|5||Google (LLC Google)||59,843,818||45,219,802||32%|
|6||SAP CIS *||37,583,191||34,112,076||10%|
|7||Siemens (Siemens LLC)||36,186,630||36,886,050||-1%|
|11||HP Inc. (Eychpi Ink LLC)||24,809,532||15,805,204||56%|
|12||Honeywell (JSC Honevell)||15,286,287||8,913,228||71%|
|13||Xerox (Kseroks SNG (Xerox) LLC)||13,915,470||13,002,928||7%|
|14||Nokia Networks * (without the created joint venture with Rostelecom)||13,637,090||7,681,138||77%|
|15||HPE (Hewlett Packard Enterprise LLC)||11,394,771||nd||nd|
|17||Canon (Canon Ru LLC)||11,060,564||10,670,286||3%|
|18||IBM (Ibm Vostochnaya Evropaaziya LLC)||10,252,215||10,927,296||-6%|
|19||Emerson (Emerson LLC)||9,539,258||8,243,151||15%|
|21||Orange Business Services (Oranzh Business Servisez LLC)||9,056,819||8,376,857||8%|
|22||Panasonic (Panasonik Rus LLC)||8,282,689||8,567,320||-3%|
|23||Kyocera (Kyocera Document Solutions Rus LLC)||8,062,033||7,244,798||11%|
|24||Microsoft (Microsoft Rus LLC)||7,970,873||9,246,070||-13%|
|25||Comparex (Comparex LLC)||7,863,049||6,640,590||18%|
|27||Luxoft (Luxoft LLC)||6,757,024||6,461,045||4%|
|28||Accenture (Accenture LLC)||5,943,582||3,476,090||70%|
|29||NCR ("En. Si. Are.", NCR A/O")||5,427,633||4,776,647||13%|
|31||Ingenico (Ingenico LLC)||5,082,447||5,339,621||-4%|
|32||Sony Mobile (Sony Mobayl Kommyunikeyshnz Rus LLC)||4,381,165||5,801,786||-24%|
|33||Ericsson (JSC Ericsson Corporation)||4,903,205||5,003,746||-2%|
|34||ZTE (ZTI-Svyaztekhnologii LLC)||4,242,688||8,418,050||-49%|
|35||Alcatel-Lucent (Alcatel-Lucent Ltd) *||4,006,896||2,820,180||50%|
|36||Atos (Atos of Atos LLC)||3,806,501||2,921,316||30%|
|37||Gemalto (Zhemalto LLC)||3,696,487||2,953,206||25%|
|38||SAS (SAS Institut LLC)||3,145,385||3,008,907||4%|
|39||Ricoh (Rico Rus) (RIKO Rus LLC)||3,108,976||2,933,212||9%|
|40||Nikon (Nikon LLC)||2,483,333||2,562,003||-3%|
|41||Konica Minolta (Konica Minolta Business Solyyushnz Russia LLC)||2,814,237||2,408,537||16%|
|42||NEC ("Nek Neva Communications Systems")||2,805,578||2,172,756||29%|
|43||Sharp Electronics (Sharp Electronics Russia LLC)||2,299,408||1,122,448||120%|
|44||Siemens Industry Software (Indastri's Siemens Software LLC)||2,296,550||1,982,880||15%|
|45||Teradata (Teradata LLC)||1,909,673||1,275,257||40%|
|46||Acronis (Akronis LLC)||1,880,062||1,793,551||4%|
|47||Eaton (Eton LLC)||1,793,953||1,472,651||21%|
|48||Axis Communications (Axis Communications LLC)||1,712,060||1,518,606||12%|
|49||Dassault Systèmes (Dasso Sistem LLC)||1,406,556||871,149||61%|
|50||Fujitsu (Fujitsu Technology Solutions LLC)||1,320,854||1,121,773||17%|
|Total (without the companies on which there are no data on revenue for 2017)||948,634,876||748,182,918||27%|
|-1 XLIFFService: Sequence contains no elements
Overwhelming number of the companies at the end of 2018 showed growth of turnovers in rubles in the list. But there are also exceptions: for example, at the Russian office ZTE revenue was reduced by 49%, Sony Mobile – for 24%, Microsoft – for 13%, IBM – for 6%.
As well as the previous year, the list for 2018 heads Apple. Revenue of her Russian legal person grew by 29%, to 197 billion rubles. At the same time on the first place there could be Samsung Electronics if in its revenue indicators of one more Russian legal person - Samsung Electronics Rus Company LLC were considered. However its financial statements and, respectively, revenue were unavailable in base " circuit.focus ".
On growth rates Huawei became the leader. Her local company showed dynamics in 114%, having reached turnover in 132 billion rubles. Revenue for 2018 became record for the Russian division. According to TAdviser, growth of an indicator was promoted by sales increase of mobile devices.
In the foreign companies, as a rule, do not comment on financial performance of local businesses. And this time foreign vendors did not surprise: those whom TAdviser addressed preferred to refrain from comments. TAdviser also asked questions to suppliers of IT, integrators and distributors about a business impact of foreign vendors in Russia of the developed political and economic situation, including sanctions. If to judge by replies of some vendors, then to them, despite policy, in Russia as though all is also good to live.
So, the vice president of Oracle in Russia and the CIS Oleg Zhukov in October, 2019 told TAdviser that volumes of business of their company in Russia do not decrease, and on the contrary, even increase. It is a little cases when customers refuse the software of Oracle owing to the conditions shown to them by import substitution policy, according to Zhukov.
According to a research TAdviser, state agencies and state companies spent for purchases of licenses and technical support services of products of Oracle in 2018 more than 13.3 billion rubles that is 19% more, than in 2017, and is a record for the last five years  (more detailed).
According to Zhukov, Oracle is going to increase business volume further. In particular, he expects to increase in 2020 financial year (comes to the end on May 31, 2020) year-on-year sales in Russia of cloud services by 40%.
In particular speak about positive dynamics of business and the cloud direction also at the Russian office Microsoft.
| ||Business of Microsoft corporation in general grows in Russia together with IT market. At the same time growth rates of a segment of cloud services are much higher in comparison with other segments. According to IDC, in 2018 the cloud market in Russia grew more than by 20%. At Microsoft this segment grew a little more. In the Russian market of public cloud services the share of Microsoft, according to IDC, makes about 11%, - told TAdviser at the Russian office Microsoft.|| |
Added to the companies that the logic of business development of Microsoft in Russia in general matches about universal, having provided data on growth of total sales and profit of corporation in 2018 financial year (on July 1, 2018 - on June 30, 2019). Revenue of corporation made $125.8 billion, having increased by 14% in comparison with 2018. Net profit was $39.2 billion — 137% more, than according to the results of 2018 financial year
Huawei said that their company continues to develop, actively investing in research activity and making a contribution to formation of specialists ICT.
| ||So, in Russia there are two R&D-центра the companies, in the next plans opening of three more. Moreover, this year in Russia the training program in area 5G for customers, partners and students started. Its task is preparation of 10 thousand specialists within the next 5 years. At the moment more than 1500 people took part in the program, - say at local office of the company.|| |
ZTE says that, adhering to strategy on vigorous and stable operating activities, their company is focused on main customers and products. ZTE continues close cooperation with the Russian operators, acting as the supplier of complete solutions for their networks.
And, for example, the head of Cisco in Russia Jonathan Sparrow in an interview of TAdviser in May, 2019 noted that political realities complicate work in Russia of the western companies. According to him, on this background Cisco tries to be flexible and when it is possible, to provide good discounts.
The purchasing director and to business development of Marvel Distribution Pavel Surin also considers that the developed political situation nevertheless influenced negatively business of foreign vendors of IT in Russia. The attitude to the market of the Russian Federation was changed about "quickly growing market with big perspectives" on "slowly growing market with big problems". The negative impact is expressed in restriction of investments into market development, in more strict procedure of authorization of projects and final customers, in restriction of financing as payment deferrals for key customers.
However to leave Russia in spite of the fact that business volumes are a small share from global market here, none of leaders gather, Surin says.
| ||First, even several percent of sales volume for big corporations are much in the conditions of the severe global competition. Secondly, it is easy to leave, but it is heavy to return: leaving is a loss of clients, the developed infrastructure, reputations of the reliable supplier, at last, - the representative of Marvel Distribution explains.|| |
Pavel Surin added that in a sense, a situation more favorable for Asian, in particular, Chinese suppliers though those also follow policy of restrictions which are introduced by the USA. But it is hardly a decisive factor in the competition, he believes, after all the product should correspond to a certain technology level to become a powerful alternative.
| ||If to consider the Chinese producers, then in automotive industry is not so though it is unknown that will be tomorrow, and Asian and American vendors already in many segments play the IT industries as equals. Though, of course, still there were hi-tech niches where the western suppliers surely are in the lead, - Surin notes.|| |
It is at this conjuncture difficult to work, first of all, to small and medium-sized companies, the purchasing director and to business development of Marvel Distribution added. The market does not promise fast return from investments any more, it is difficult to get a financial support from the western financial institutions for start of business in Russia.
The Croc integrator also notes that change of world market conditions affected also the Russian IT market. The geopolitical factor promotes growth of a share of Asian producers in the Russian market, speak in the company, including, thanks to attractive conditions for partners and end customers.
| ||And solutions of Asian producers supplement technologies of the western suppliers rather. For this reason we continue to develop the balanced service portfolio and solutions on the basis of multivendor approach, providing to clients Croc parity access to technologies and IT solutions practically of all global manufacturers. And it can be not only widely famous suppliers of the IT equipment and software, but also niche players, - told TAdviser in the company.|| |
Added to Croc that the market in general passes to multivendor diversification, producers rebuild the solution portfolios in connection therewith a trend.
Judging by dynamics of indicators of local offices and expressions of representatives of the large companies, despite the become complicated political and economic situation vendors in Russia still have growth points. In many respects it is promoted by the general course towards digitalization stimulating demand for IT solutions. And from the technology point of view one of key drivers of growth is, for example, cloud computing. At the same time, now foreign IT suppliers for successful work in Russia need more flexibility: both concerning clients, and in ability to quickly make the correct decisions in the conditions of uncertainty and high volatility of ruble.
The list of TAdviser included 50 suppliers of computing and telecommunication equipment, digital equipment, the software and also IT services and data centers. Their local legal entities were ranged on total revenue on the basis of the analysis of the accounting records for 2017 which are contained in base " circuit.focus ". In addition to turnover, dynamics of turnover in relation to 2016 is also reflected in the list.
At some IT companies more than one legal person in Russia, revenue-generating from IT act. In this case their revenue was summed up.
At the list there are only those companies, whose financial results of activity for the specified period were published in open access. On some companies they were unavailable. For example, there are no data from HP Enterprise (Hewlett Packard Enterprise LLC) while HP could appear in the middle of the list: in 2015 revenue of this legal person made 3.6 billion rubles.
In total through the Russian offices of the foreign IT companies in 2017 there passed about 600 billion rubles. Their total turnover grew by 10.6% in relation to 2016 if to consider turnover only of those companies on which there are data both for 2016, and for 2017. In 2016 consolidated revenues of these legal persons were about 483 billion rubles, in 2017 - about 535 billion rubles.
The most profitable representative offices of the foreign IT companies in Russia
|' №'||Name||Revenue in 2017 (thousand rubles)||Revenue in 2016 (thousand rubles)||Dynamics|
|1||Apple (Ltd. Apple Rus)||151,926,499||123,565,067||22|
|2||LG Electronics (LG Electronics of RUS LLC)||76,190,361||82,415,311||-7|
|4||Samsung Electronics (Samsung Electronics Rus Kaluga LLC)||54,086,597||47,654,923||13|
|5||Google (LLC Google)||45,219,802||29,916,891||51|
|6||Siemens (Siemens LLC)||36,886,050||40,609,702||-9|
|7||SAP CIS *||34,112,076||27,202,597||25|
|10||Dell (Dell LLC)||19,535,126||14,428,366||35|
|11||Xerox (Kseroks (CIS) LLC)||13,002,928||12,321,942||5|
|12||IBM EuropeAsia(Ibm Vostochnaya / LLC)||10,927,296||11,950,988||-8|
|13||Canon (Canon Ru LLC)||10,670,286||10,474,826||1|
|14||Microsoft (Microsoft Rus LLC)||9,246,070||9,894,346||-6|
|15||Panasonic (Panasonik Rus LLC)||8,567,320||8,376,579||2|
|16||ZTE (ZTI-Svyaztekhnologii LLC)||8,418,050||13,010,823||-35|
|17||Orange Business Services (Orange Business Services LLC)||8,376,857||9,269,168||-9|
|18||Emerson (Emerson LLC)||8,243,151||9,072,017||-9|
|20||Nokia Networks *||7,681,138||nd||nd|
|21||Kyocera (Kyocera Document Solutions Rus LLC)||7,244,798||6,393,691||13|
|22||Comparex (Comparex LLC)||6,640,590||7,674,746||-13|
|23||Sony Mobile (Sony Mobayl Kommyunikeyshnz Rus LLC)||5,801,786||9,245,430||-37|
|24||Ingenico (Ingenico LLC)||5,339,621||4,879,145||9|
|26||Ericsson (JSC Ericsson Corporation)||5,003,746||4,999,215||<1|
|27||SAS (SAS Institut LLC)||3,008,907||2,376,093||26|
|28||Ricoh (Rico Rus) (RIKO Rus LLC)||2,933,212||2,812,740||4|
|29||Atos (Atos of Atos LLC)||2,921,316||2,199,556||32|
|30||Alcatel-Lucent (Alcatel-Lucent Ltd)||2,820,180||3,132,638||-9|
|31||Nikon (Nikon LLC)||2,562,003||3,130,945||-18|
|32||Konica Minolta (Konica Minolta Business Solyyushnz Russia LLC)||2,408,537||2,340,332||2|
|33||NEC ("Nek Neva Communications Systems")||2,172,756||nd||nd|
|34||EMC (EMS Information Sistemy Si — Ah-Es LLC) *||2,098,251||2,049,463||2|
|35||Siemens Industry Software (Indastri's Siemens Software LLC)||1,982,880||1,998,190||- <1|
|36||Acronis (Akronis LLC)||1,793,551||1,459,000||22|
|37||Lenovo (Lenovo Eastern Europe / Asia)||1,432,189||1,935,560||-27|
|38||Ingram Micro (Yim Engineering Servisez LLC)||1,364,848||nd||nd|
|39||Avaya (Avaya LLC)||1,348,288||1,014,142||32|
|40||Fujitsu (Fujitsu Technology Solutions LLC)||1,121,773||1,008,317||11|
|41||Eaton (Eton LLC)||1,092,100||1,472,651||11|
|42||Amdocs (Amdoks Solyushnz Ltd LLC)||932,459||608,499||53|
|43||Intel (Intel Teknolodzhis LLC) *||886,818||nd||nd|
|44||Toshiba (Toshiba Rus LLC)||872,297||883,573||-3|
|45||Dassault Systèmes (Dasso Sistem LLC)||871,149||nd||nd|
|46||Linxdatacenter * (Svyaz VSD LLC)||869,137||919,154||-5|
|47||Hitachi Vantara (Hitachi Vantara LLC)||856,374||769,281||11|
|48||Juniper Networks (Dzhuniper Netvorking Solyushnz LLC)||431,567||271,528||58|
|49||HP ("A.O. Hewlett Packard") *||399,015||4,391,695||-91|
|50||Genesys (Genezis Telekommunikatsionnye Laboratorii LLC)||368,882||nd||nd|
|-1 XLIFFService: Sequence contains no elements
Data retrieveds cause a number of questions. For example, how essential part of the Russian business of foreign IT suppliers passes through their local legal persons? As you know, contracts are signed and directly with foreign offices of vendors. The exact answer to this question can hardly be received. Vendors, as a rule, are not eager to open local financial performance, connecting it with domestic information policy.
The top manager of one of the largest system integrators working with a large number of the vendors presented in the list considers that, as a rule, the more importance the foreign IT company gives to the Russian market in terms of business development, the she will carry out bigger sales volume through the Russian office, "differently she just here will not survive".
The interlocutor of TAdviser assumes that about 90% of revenue of the largest foreign IT companies can pass through their Russian legal persons.
One more question – as far as revenue development of the Russian offices reflects dynamics of business of these companies in Russia in general. Heads in two distributors from among the largest and in one of the largest integrators which TAdviser addressed studied the list. The companies noted that in general on those partners with whom they interact it is estimated possible to speak about the close compliance of revenue development of their Russian legal persons reflected in the list of TAdviser, dynamics of sales of these partners in Russia.
Among the companies which respondents of TAdviser representatives of distributors and integrator, for example, such as Apple, Schneider Electric, IBM, ZTE, Kyocera, Sony Mobile, Nikon, Konica Minolta, Ricoh (Rico Rus) mentioned.
Opinions of respondents of TAdviser of representatives of the companies were shared concerning Cisco. In one of the largest distributors agreed that the reflected revenue development of the Russian offices Cisco is close to dynamics of their business in Russia while the representative of integrator to whom TAdviser communicated, assumed that growth was, but, most likely, it is less, than data of offices. Cisco advances the servers, the expert says, but in this area he does still not know of large projects.
Separately the head from integrator selected Huawei on which there are no open data for 2016 and, respectively, there are no data on dynamics. The interlocutor of TAdviser believes that Huawei probably had very high growth of business. According to him, affected it as growth of quality of the ICT equipment of this supplier for the last few years – servers and DWH, and his effort on sales increase against the background of import substitution policy. Huawei also has a line of the engineering equipment.
At the expense of the flexible price offer, readiness to strongly beat down the price, the Chinese producer progressed in the competition to the largest world vendors, the representative of integrator notes.
In present economic conditions the price of products purchases the increasing value for customers, the interlocutor of TAdviser from integrator notes. And if customers in many sectors are not ready to transfer critical business processes to servers of Huawei, then for auxiliary are ready to use it.
Concerning IBM, in particular, in one of the largest integrators agreed with negative dynamics of sales, without having excluded that upon drop in sales it is even more, than at the Russian legal person. A considerable part of revenue of the similar IT companies in Russia is the share of the equipment while IBM from "iron" by and large had only expensive servers with a long sales cycle. Such servers, certainly, are necessary, but not in that quantity and not to the so many companies to provide stable growth, the interlocutor of TAdviser believes.
Besides, the expert considers, a part of turnover of IBM up to "gland" was drawn on itself by the Russian company Yadro which at first was an OEM partner of IBM, and then announced the line of the equipment.
Sales of solutions APCS could become one of drivers of growth of business Schneider Electric in Russia, the expert from integrator believes: many different plants with respect thereto demand and for an APCS grows, traditionally being expensive product are under construction.
Despite a difficult economic and political situation in Russia, income of most the Russian offices of 50 foreign companies in 2017 showed growth, and cumulative dynamics of growth on all the companies on which data for 2017 and 2016 are available, is calculated by two-digit digits. Proceeding from communication with experts who are mentioned above it is possible to draw a conclusion that growth showed business of the largest foreign companies in Russia in general.
The aggravated political situation and uncertainty in 2018, on the one hand, and a course of state structures and state companies towards import substitution, on the other hand can negatively affect dynamics of growth of business of the foreign ICT companies in Russia. Also the general rise in price of IT products against the background of depreciation of the ruble can make a negative contribution. A certain advantage on this background will be had by the foreign companies having local production and ready to price flexibility.
At the same time, the increasing number of the enterprises in Russia, including, not connected with the state, start at themselves processes of digital transformation. It promotes additional increase in demand for an ICT products in general and on products of foreign suppliers in particular. Also the fact that not in all segments of ICT of so far rather competitive Russian solutions should help foreign suppliers.
Everything together it can level some of the negative factors having an impact on IT market in Russia and in total to bring to the foreign companies positive dynamics of local business in 2018.