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1C Joint Stock Company

Company

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1C Company  is the Russian company specializing in distribution, support and software development and databases of business and house appointment.

Owners:
Nuraliyev Boris Georgiyevich
Baring Vostok Capital Partners - 9%
In 2011 Baring Vostok Private Equity Fund IV invested in the new company based on which 1C consolidated assets: these assets became deposit 1C, and the fund deposited money and received about 9%. The others 91% control 1C Ltd. In the complete property of closed joint stock company there was only a business connected with licensing and work with a state secret.

Content


1000 employees in 2013
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Assets

Owners

+ 1C Joint Stock Company

The founder and the permanent director of 1C is Boris Nuraliyev.

Assets

Partner network

Main article: Partner network of 1C

Affiliated and joint ventures

For June, 2015 more than 200 affiliated and joint ventures are a part of the 1C group. The network of the franchisee 1C exceeds 6700 firms. Among joint ventures of group:

Some joint ventures 1C

Name Activity - class= "odd" 1 1C-Rarus Distribution / Subdistribyyution, large implementations, industry solutions - class= "even" 2 1C: Northwest Business development and a partner network in S-Z the federal district - class= "odd" 3 1С:Мультимедиа Yekaterinburg Regional distribution of games and programs for the house - class= "even" 4 1C Rating Development and distribution of application solutions for Kazakhstan - class= "odd" 5 1C: Vietnam Development and distribution of application solutions for Vietnam - class= "even" 6 1C: Wireless Development of programs for mobile phones - class= "odd" 7 1C-Bitrix Standard system of creation of the websites - class= "even" 8 1S:UTS3 Training of specialists according to 1C: Enterprise for partners - class= "odd" 9 1C-Softklab Development, edition, localization and distribution of computer and video games - class= "even" 10 1C-Praton, 1C:Accounting service Stavropol Rendering professional services on accounting under the name of 1C:Accounting service - class= "odd" 11 1CAir (1СиЭйр.ру) Предоставление системы "1C: Enterprise" in lease. - class= "even" 12 1C-KPD Implementation of electronic document management systems and corporate portals - class= "odd" 13 1C Gendalf, 1C Profile, 1C-Ladomir, 1C - the Ural center, the Prime the Region, 1C-Galex, 1C-Forus, 1C – the Central Siberia, 1C Yumans, 1Ñ-Yakutsk, 1C - the Far East Regional distributors - class= "even" 14 Alager Distribution of the computer equipment

From Boris Nuraliyev's interview in the summer of 2015[1]:

Part of our business model — joint ventures, their about 200. Totally they give more revenue, than central 1C. Earlier we divided shares in legal persons 50/50, now we keep 51%, to the partner — 49% that allows us to attribute completely to group progress of joint ventures at consolidation according to IFRS. At the same time it is important to us to save in entrepreneurs feeling of the drive and a wheel in hands — that the person understood that it is his business and he bears responsibility. A role of central 1C in the joint venture — a task of general strategy and that help which is necessary for development of joint business: money, council, reputation, technologies, areas, contacts, access to sales network.

History

2019

The agreement with YarGU of Demidov about strategic partnership in the field of training

On June 6, 2019 the rector of the Yaroslavl state university of P.G. Demidov Alexander Rusakov and the director of 1C Company Boris Nuraliyev signed the agreement on strategic partnership. Read more here.

The agreement with Qiwi on joint development of IT solutions for the financial technical-companies

On June 6, 2019 QIWI and 1S companies announced strategic partnership. The companies together will be engaged in development of IT solutions for optimization of operational processes of the financial technical-companies. The corresponding memorandum is signed by the CEO of QIWI Sergey Solonin and the director of the company of 1C Boris Nuraliyev. Read more here.

2018

Creation of the joint venture with Galaktika

On July 30, 2018 the Russian developers of corporate information systems, 1C Company and Galaktika corporation, announced creation of joint venture with equal shares of ownership. The main objective of the created joint venture – it is more effective to satisfy requirements of the enterprises of defense industry complex which consider it expedient to use at the same time the systems of 1C and Galaktika (in more detail...).

Agreement with Sberbank on integration of products and services

Sberbank and 1C company signed on May 24, 2018 the agreement on cooperation in the field of integration of the products and services for corporate financing, financing of investment and export activities and also other banking activities and services. The agreement was signed by the senior vice president of Sberbank Anatoly Popov and the director of the company of 1C Boris Nuraliyev. Read more here.

1C buys a controlling stake of Smartway

On January 15, 2018 it became known of sale of a 51 percent share of Smartway of 1C company. The cost of the transaction does not reveal, but the informed source of the Kommersant newspaper estimates it at 150 million rubles. Read more here.

2017

Overview of TAdviser: What approaches to business of 1C and Galaktika differ in

1C or Galaktika? Than are similar also what the main Russian ERP vendors differ in

Boris Nuraliyev: Large enterprises do not hesitate to implement 1C any more, now it is fashionable

The founder and the director of 1C Boris Nuraliyev considers that his company overcame reputation of the supplier of ERP only for the small enterprises and became the strong contender to solution providers for big customers.

«
There is a legend that 1C - only for the small enterprises. Partially it is caused our past as 1C began with the small companies, and is partially warmed up by our competitors. Actually, we now seriously compete in the market of automation of large enterprises, the largest holdings - Nuraliyev at a press conference at the St. Petersburg International Economic Forum (SPIEF) in May, 2017 said.
»

Projects of 2016 at large customers it cited expansion of use of products of 1C in Russian Post, Gazprombank, Transmashholding, Bashkirenergo, Unimilk as an example.

Boris Nuraliyev, founder and director of 1C
Boris Nuraliyev, founder and director of 1C

Boris Nuraliyev also noted that he became 1C fashionable". In it he sees, including, an import substitution merit. The director of 1C says that on this wave in large holdings appeared responsible for import substitution which need to report.

«
If earlier they hesitated that they implement "1C: Enterprise", for them it was not so a parabottom as implementation of a large foreign system, then now it became easier to receive consent to the publication of the fact of the project, - he told.
»

At the same time, Nuraliyev specifies, import substitution is not a key factor when choosing solutions of 1C by customers in Russia: "really after all nobody will buy our systems only because they domestic".

Instead of foreign during the period from 2015 to February, 2017 follows from reports of partners on nearly 200 cases of the choice of ERP solutions of 1C that such factors as the cost of licenses, implementations and maintenances, compliance of functionality to the price, existence in the market of a large number of specialists in 1C and partners are on the first place, Boris Nuraliyev told.

The CEO of 1C told TAdviser that in total sales of the company big customers occupy not a really big share as it is still a little of them.

Nuraliyev at the same time noted that, 1C does not aim to be displaced in a segment of large business: the company sets as the purpose to cover all range of clients, including so small with what earlier did not even work. For the last in 2017 1C released a special application of "SP of 6%" for delivery of tax statements, he told.

Creation of 1C of International for growth in foreign markets

In May, 2017 1C announced creation of joint venture with Sergey Andreyev, from 1999 to 2017 working as the CEO of ABBYY. The new company under the name 1C International began to be engaged in development and promotion of group of products "in 1C: Enterprise" (1C: Enterprise) in foreign markets. Sergey Andreyev became her head. Read more here.

Hit under the Ukrainian sanctions

On May 16, 2017 the president of Ukraine Petro Poroshenko the decree enacted the decision of the National Security and Defense Council (NSDC) on sanctions against the Russian companies and their affiliated enterprises in Ukraine. In total in the sanctions list there were 468 legal entities, from them 81 – connected with the IT field. Among the companies which fell under sanctions, turned out Russian and the Ukrainian legal persons of 1C and "Multimed_a Ukra§n's 1C" and also a number of their large distributors and representatives in Ukraine: Eurosoftprom, Skayline Softver, SUNLINE, "1C-Telur Module", Alpha Côme Soft, "1C-Rarus Ukra§n's Software", Pershy of b_t of 1C. Read more here.

The SSU announced shadowing of the Russian intelligence agencies the Ukrainian companies by means of software of 1C

On April 27, 2017 the Security Service of Ukraine (SSU) declared danger of use of the software of 1C company as it, allegedly, allows to keep shadowing for benefit of the Russian intelligence agencies, RBC with reference to Ukrainian Pravda writes.

«
We urge our entrepreneurs to be circumspect and  to deliberately make solutions on  those software products which you use in  the activity —   the chief of staff of the head of the Security Service of Ukraine Alexander Tkachuk reported at a briefing in Kiev.
»

The Security Service of Ukraine convicted the local company of sale of the Russian 1C software product
The Security Service of Ukraine convicted the local company of sale of the Russian 1C software product

On the website of the SSU it is noted that administration, updating and  support of software of 1C is performed from  the territory of the Russian Federation,  including through  remote access to  the equipment of the Kiev representative office of the Russian company.

«
The next fact of existence of the hidden control of intelligence agencies of the Russian Federation of  a situation in  the public and  private sector of economy of Ukraine  and also behind  the enterprises which are located in  territories so-called "the LPR/the DPR is detected — said in the Security Service of Ukraine.
»

According to Alexander Tkachuk, the SSU exposed the company which illegally sold products of 1C in  territories of the self-proclaimed Donetsk and  Luhansk people's republics (the DPR and  LPR). At the Kiev office of the company field investigators detected documentation confirming the facts of "illegal sale of this software product in  temporarily occupied territories", said in the SSU.

This commercial structure which was engaged in distribution of software of 1C is entered  by the National Security and Defense Council in  the sanctions list. The name of the company is not revealed. It is noted only that it is legally registered and  actually is in Luhansk.

On April 26, 2017 the SSU reported on  "exposure" of the management of eight firms which sold and  used the prohibited spy software  of an izrossiya.[2]

Besides, Alexander Tkachuk said that FSB could obtain data from Ukraine using the program for monitoring of workers Stakhanovite. In more detail about it here.

2016

Growth of revenue by 3.6%

In 2016 revenue of 1C group according to TAdviser made 37.300 billion rubles, having increased by 3.6% in relation to 2015. In a ranking "TAdviser100: The largest IT companies in Russia" at the end of 2016 the 1C group took the 7th place.

Sales growth "1C: Enterprise" - 15.5% in rubles, outsourcing growth

In 2016 the sales volume of 1C group with the affiliated, joint and retail enterprises, with elimination of intra group turnovers grew by 6%, the founder and director of the company Boris Nuraliyev at the St. Petersburg International Economic Forum in May, 2017 told.

Sales of a key product of 1C in 2016 grew by 15.5%, Nuraliyev told. At the same time sales of licenses grew by 13%, and subscriptions and services - for 18%.

The director of the company also reported that in 2016 the sales volume of services and subscriptions for the first time in the history of 1C exceeded sales volumes of the licenses softwares "1C: Enterprise" though the overweight and was insignificant. The bias towards services and podpisochny model is an and world trend.

About 200 companies from 2015 to 2017 selected the ERP solution of 1C instead of the "heavy" western systems of a similar class, brought data into 1C. On the diagram it is visible below that 1C: Enterprise receives more and more implementations in the large organizations with a large number of jobs.

Implementations of 1C: Enterprise on number of jobs by years

"Earlier we suggested clients to automate their accounting, now we can automate their primary activity (trade, production) and to take fiscal accounting on outsourcing: accounting, taxes, salary" — quite so Boris Nuraliyev formulated essentially new motion vector of the company.

He reminded that 1C is not only the leading developer, but also the recognized expert in the most data domain of accounting today, including having developed the standard of rendering accounting services. Several years the firm develops two such outsourcing projects: "1C:Accounting service" (for small business) and "1C: Outsourcing", developing at the same time a new partner network on the basis of the fulfilled fraychayzing model.

Dynamics of sales of outsourcing of accounting functions

According to Boris Nuraliyev, outsourcing market of accounting functions in the USA makes 0.35% of GDP of the country, and in Russia — less than 0.01%, such lag tells the potential of growth of this sector of economy about essential potential. At the same time it grows in Russia with average speed about 25% a year, even despite the constraining its opacities of the Russian companies and low qualification of many players of the market.

"We occupy several percent of this market so far, but we can increase the share much, and at the same time the market can grow much too. Just as we created the industry of mass IT automation of the enterprises, we begin to create the industry of mass outsourcing of accounting functions now" — Boris Nuraliyev said.

Share in the market of ERP systems of Russia

According to IDC, for many years of 1C systematically increases the market share by the amount of income in the Russian market of ERP systems.

In 2016 among the leading suppliers of information management systems the enterprise (ERP, etc.) in the Russian market 1C takes the second place from shares in 32.9%. In comparison with 2015 it added 0.2%. SAP from shares in 49% remains the leader here still. Microsoft has 8.8%, Oracle has 4%, Galaktika has 2.2%. 3.2% are the share of other players.

Shares of suppliers in the Russian ERP/ISUP market on sales volumes in US dollars in 2003-2016, %

Commenting partly on a modest gain of a market share of 1C, despite the course towards import substitution announced by the state, the head of 1C Boris Nuraliyev emphasized that in a research money in the Russian currency is considered.

"We have ruble prices and even just to save the share, we should increase significantly in pieces sales" — he says.

1C became the co-owner of Quick Resto

In August, 2016 1C was a part of owners of Quick Resto group, having redeemed a controlling stake. Transaction details - in the separate article:

2013

1C was going to conquer foreign countries

1C develops and prepares for start the affiliate program for the international partners working outside the CIS countries the founder and the director of 1CBoris Nuraliyev reported in the middle of June, 2013.

Within the new program of 1C it is ready to provide them development tools, technical support and to stimulate partners on creation of own products based on the 1C: Enterprise platform and also on their international promotion, he added.

It should be noted that 1C conducts work in a number of foreign countries several years. For example, since 2005 the official representative office in Germany which through partners provides to customers services in development of custom business applications on a basis "1C: Enterprise", to licensing, installation and maintenance of products of 1C in Europe works.

Outside the CIS where the company has partners and representations, on the website of 1C Bulgaria, Poland, Romania, Turkey and Vietnam are registered as other countries. The 1C: Enterprise interface as of June, 2013 is available in 14 languages, in addition to Russian. The last added languages became Azerbaijani and Chinese.

Indicators of sales of the platform outside the CIS at the same time in 1C are not sounded yet. Boris Nuraliyev notes only that still were engaged in 1C in work in the markets of foreign countries "pointwise": global expansion and big investments into this direction was not yet.

"1C Company in success in the territory of the former USSR was resulted by two things: on the one hand, this really good software, and with another – we built the business approach which was not applied in Russia, due to good understanding of local market before", - Boris Nuraliyev says.

The strategy of 1C in Russia and the CIS countries is based on work through a partner network. As of June, 2013 it totals more than 6.5 thousand franchisees. However the model which provided 1C success in these markets, most possibly will not work the same way in international market, believe in 1C. Now the company thinks over different possible models of work with partners in foreign countries.

1C will pass to electronic document management with partners

From 3rd quarter 2013 1C is going to offer all partners of 1C: Franchising network transition to legally significant electronic document management, the founder anddirector of the company Boris Nuraliyev told. The corresponding information letter, according to him, is in process of preparation.

Such document flow, so far - in the test mode, 1C implements from the middle of 2012, exchanging with the franchisee and distributors acts on rendering services and invoices. It is going to be extended also to signing of the contracts.

In October, 2011 became effective the changes in Article 54 of the Civil Code ("Commercial concession") regulating application in Russia of the relations of franchizing. According to them the franchiser had an opportunity to set a number of restrictions to partners: for example, to demand from them a certain quality level of the goods and services connected with its brand and certification of employees.

After change in the law of 1C began renewal of agreements with the franchisee: instead of agreements of information support for accession to network it became necessary to sign the agreement of concession.

Signing of the contracts is performed through the CRM system of 1C: partners submit the application for new agreements via the web interface then considers it and approves partner department. After that automatically the PDF file with the agreement which he signs forms and goes to the partner, sets the seals and sends both copies to the signature to 1C. According to 1C, since 2011 thus about 34 thousand agreements and additional agreements were signed.

The electronic digital signature is necessary for ensuring legally significant electronic document management. 1C issues to her employees own certification center.

2012

90% of the companies in Russia conduct accounting in 1C

According to the research TNS with which results TAdviser got acquainted on April 3, 2013, in 2012 about 90% of the companies in the large Russian cities used products 1C for conducting accounting.

They, according to a research, are followed by systems BEST and Parus, whose shares on number of the Russian companies where they are used, do not exceed 1.4% and 1.2% respectively. From world market leaders of ERP systems in the list it is possible to note Microsoft Dynamics NAV from shares in 0.2%.

Representatives of 1C told TAdviser that their solutions are often used for conducting accounting and in those companies where enterprise management systems of the largest world vendors are installed.

"It is connected with the fact that we as the large Russian company, we can react most quickly to changes of the local legislation and reflect them in our products", - representatives of 1C in a conversation with TAdviser noted.

SAP and Oracle did not comment on results of the research TNS. Microsoft told TAdviser that see the permanent growth of popularity of Microsoft Dynamics NAV in Russia.

"By our estimates, growth of number of new customers of this solution in 2012 was more than 50%. The next version of Microsoft Dynamics NAV on which localization we work today will be available in traditional model (installation in own infrastructure), and in the form of a cloud service based on Windows Azure", - told TAdviser in Microsoft.

1C buys Megaplan

In March, 2012 it became known that 1C purchased 51% Megaplan. The investor of the first round – IQ ONE fund (the main beneficiary - Ulvi Kasimov) - saved a block packet of Megaplan according to the results of the transaction. The StartupIndex investment agency was engaged in the organization and structuring the transaction.

The received investments will allow to strengthen development of a product line and to expand the marketing budget, says the parties.

In plans for 2012 – growth of revenue of Megaplan by 6 times in comparison with 2011 the Parties calculate that strategic cooperation will allow to implement closer integration of products of Megaplan with accounting and management decisions of 1C and as a result to offer partners and users new services and opportunities.

Alexander Volchek, the CEO of Megaplan, says that he draws the conclusion of the transaction with 1C Company the companies unique opportunities for development and promotion of products:

"We observe this revolution in the market of cloud services for small and medium business. We calculate that the received investments and reaching the new level of cooperation with 1C will allow us to implement ambitious plans - grow quicker than this rapidly emerging market".

During 2011 Megaplan implemented a number of strategic initiatives: in addition to products for the organization of joint work and a task management the line of CRM solutions was started, representations in Ukraine, Belarus, Kazakhstan were open, free products for the small companies are announced.

Earlier, became 1C the co-owner of other cloud service - "MyWayhouse". 1C received funds for acquisition of new assets for the account of sale of a share to Baring Vostok investment fund.

The share of 1C in the market of ERP was reduced for the first time in 9 years

At the end of 2012 shares of SAP,Oracle and Galaktika corporation in the Russian market of ERP systems grew up, and 1C and Microsoft – were a little reduced. It follows from the materials provided to TAdviser by IDC analytical company in October, 2013.IDC published the general report on the market for 2012 in August, however then data on alignment of forces of the largest players in it were absent.

According to the estimates of analysts, SAP from shares in 49.9% (in 2011 - 47.8%) remained the leader of the Russian market of ERP systems in 2012. It is followed by 1C which share made 29.2% (in 2011 - 31.6%), and Oracle from shares in 8% (in 2011 - 7.5%). Close top five of Microsoft whose share made 6.8% (in 2011 - 6.9%), and Galaktika from shares in 2% (in 2011 - 1.8%).

It should be noted that the share of 1C showed reduction for the first time since 2004 when IDC began to include the company in the reports on the Russian market of systems for enterprise management. It occurred after 1C put on the market the 1C:Enterprise 8 platform. Then the share of the company made 4.6%. Shares of SAP, Oracle, Microsoft and Galaktika for the same moment made 40.6%, 22.8%, 10.9% and 8.2% respectively.

Since 2004 as show analytical reports, 1C systematically increased the presence in the market, having reached on it a share in 12% in 2006, 22.3% - in 2009, and having occupied already more its third by 2012. In absolute measures as it is possible to count on the basis of reports of IDC, sales of 1C in the market of ERP in 2012 continued to grow.

Shares of the largest players of the Russian market of ERP systems, 2003-2012 <sup id=[3]" src="/images/1/12/Erpshares.jpg" width="500" height="310" border="0" class="thumbimage" />
Shares of the largest players of the Russian market of ERP systems, 2003-2012 [3]

1C told TAdviser that at the current state of the economy consider the result achieved in recent years "in general very quite good". Commenting on decrease in a share of the company in the market in the last report of IDC, 1C notes that in 2011 sales of its platform "1C: Enterprise" on a wave of the postponed post-crisis demand grew intermittently, by 74%. In 2012 to year the postponed post-crisis demand was already exhausted, and in the second half of the year braking of economy became noticeable, stagnation began.

"Respectively, it was less created new businesses, more and more closed earlier created, the gain of the customer base slowed down, especially in a segment of SMB, most for us mass, - the representative of 1C Alexey Kharitonov explains. - The enterprises became stronger to save, the same as in crisis. It brought in a segment of SMB, including, to the fact that on our sales the share of cheap, "basic" versions of the programs "1C: Enterprise" which IDC in the overview does not consider grew.

Change of a situation in the state budget sector became an additional factor, Kharitonov adds: "if in 2011 serious changes in the legislation caused mass transition of budgetary institutions to new software products, including - solutions of the 1C:Enterprise 8 system, sales of 1C in this segment jumped up many times and became one of main growth drivers, then in 2012 the situation was normalized – organic growth from the level of 2010 continued.

Add to the companies that for large business from which demand, according to IDC, is the pacing factor supporting the Russian market of ERP now 1C prepares the solutions of new generation on the 1C:Enterprise 8.3 platform focused on more effective and complete solution of the tasks demanded by large enterprises on more large-scale implementations.

"We calculate that the release of the final version of a system planned in the end of the year "1C: Enterprise management (ERP) 2.0" will allow us to strengthen further positions and to increase a share in this segment of the market", - Alexey Kharitonov says.

Beta "1C:" the company released enterprise management (ERP) 2.0 in September, 2013, and the final version of a product is expected at the end of 2013.

2011

Purchase of My Warehouse service

In May, 2011 1C was a part of owners of Lognex LLC, having redeemed a share from the former co-owner, Ambient Sound Investments investment fund. Further it is going to increase a share of 1C in the project due to the additional investment aimed at the development of the MyWayhouse project. 1C Company intends to participate actively in development of the MyWayhouse project together with its founders and co-owners Askar Rakhimberdiyev and Oleg Alekseev who will continue to perform operational management by Lognex company.

Director of 1C Company Boris Nuraliyev:

"In a technology platform of 1C: Enterprise 8.2 the functionality, held for use solutions of a system as the "cloud" services provided on the Internet including according to the SaaS model is already implemented. Taking into account it we study different options of improvement of our model of business which cornerstone the support on a wide partner network is. Creation of joint venture with founders of Lognex company will allow to use experience of successful SaaS project of "MyWayhouse" for further development both our technologies and solutions, and business of our partners".

Stop of sales 1C: Enterprise 7.7

In July, 2011 products of the line 1C: Enterprise 7.7 are brought out of the price list. Among them: 1C: Enterprise 7.7. Complex delivery, 1C: Accounting 7.7, 1C: Accounting 7.7 (basic version), 1C: Accounting 7.7. Simplified tax system. The basic version, 1C: Entrepreneur 7.7, Solutions for the budget sphere, 1C: Accounting for budgetary institutions, Accounting for managers of budgetary funds, 1C: Ware allowance 7.7 and others.

The trademark of 1C is recognized well-known

In September, 2011 (Rospatent) the trademark of 1C is recognized the decision of Federal Service for Intellectual Property, Patents and Trademarks well-known in the territory of the Russian Federation since January 1, 2006. According to the current legislation, it gives to the trademark termless legal protection and additional opportunities of protection against illegal use. At this time in Russia such status has only 107 trademarks, 1C Company was included into one row with such well-known brands as Intel, Disney, the Bolshoi Theatre, NTV, Gazprom, Sberbank, Coca Cola and Alenka chocolate.

The decision on recognition of the trademark well-known is made by Commission of experts of Federal Service for Intellectual Property, Patents and Trademarks on the basis of documentary confirmations and the sociological survey conducted by Institute of sociology of RAS in 25 Russian cities. Sociological poll showed that 92% of respondents truly identify the image of the trademark with 1C Company, at the same time 73% know that this sign is used concerning programs for automation of the enterprises, 52% associate it with programs for home computers. On June 23, 2011 the trademark of 1C is entered to the List of well-known trademarks in the Russian Federation that is confirmed with Certificate No. 106.

Restructuring and sale of 9% of Baring Vostok company

On October 1, 2011 it became known that the Baring Vostok Private Equity Fund IV fund invested in 1C group. Announced the management of the software company on Saturday at a partner seminar it. About it to Vedomosti[4] one of participants at the event told. The fact of the transaction was confirmed by the representative of 1C Alexey Kharitonov and the senior partner of Baring Vostokelena fund Ivashentseva. According to Kharitonov, Baring Vostok invested in the new company based on which 1C consolidated assets: these assets became deposit 1C, and the fund deposited money and received about 9%. The others 91% control 1C Ltd.

In the complete property of closed joint stock company there was only a business connected with licensing and work with a state secret, Kharitonov specifies. Except for this direction, the new company controls all business of 1C, Ivashentseva adds. Any of the parties does not disclose transaction amount.

1C promises to use the raised funds for further development, acquisitions and expansion of structure of joint ventures. As a rule, Baring Vostok is a long-term investor, and in a case with 1C too, Ivashentseva adds.

Besides 1C and Baring agreed about creation of a pool of the share options of the head company which part will be annually provided to key staff of 1C, partners in the joint businesses and the franchisee playing a strategic role in development of group.

Participants of the IT market and managers of investment companies told about negotiations between founders of 1C and Baring to Vedomosti in 2009. Basic documents according to the transaction were signed, according to some of them, spring of 2011. Two years could be required on reorganization of 1C, the manager of large investment bank assumes: earlier business of the company was dispersed on a set of joint ventures and needed centralization.

Financial indicator of 1C calls only one — dynamics of change of turnover which in 2010 added 20%. In 2010 the aggregate turnover of group 1C was $608 million, the RIA Novosti agency with reference to materials of the company (this assessment to Vedomosti was confirmed by the manager close to participants of the transaction) reported at the end of September, and in 2011 it it is going to increase by 26% to $768 million. Capitalization of main competitors of 1C — SAP and Oracle — for September 30, 2011 made 3.41 and 4.1 indicators of revenue for the last 12 months respectively. If to use the corresponding multiplicators to 1C, then its assessment can vary from $2.07 billion to $2.49 billion, and Baring share cost — from $186 million to $224 million.

The value of the multiplicator decides, on the one hand, by business scale, and on another — dynamics of its growth, the senior analyst of UniCredit Securities Nadezhda Golubeva explains. Revenue of 1C is two orders less, than both at Oracle, and at SAP; on growth rates 1C is at the level of SAP (+19% in 2010), but concedes to Oracle (thanks to purchase Sun Microsystems increased revenue by 33%). "As first approximation" 1C can be estimated at three-four revenues, Golubeva allows.

Start of own cloud of 1cfresh.com

In December, 2011 it became known that for work with applications of 1C from capacities of the company through network of the general access in the pilot mode the website 1cfresh.com was started.

Also it was announced that in 1C the option program in which will probably be able to take part both the staff of the developer, and heads of the main enterprises of a partner network is developed. The largest of them, we will remind, 1C-Rarus and 1S:BIT which are engaged for the last years in absorption of smaller franchisees are.

Rapid growth of revenue

In terms of money a market leader of ERP systems is SAP. According to IDC, in 2011 the share of this vendor in Russia made 47.8%, 1C was in the second place from shares in 31.6%, and on the third –Oracle whose market share made 7.5%.

In December, 2011 1C predicted that growth of revenue in 2011 in comparison with 2010, will be 34% in dollar expression. It was said by the founder and the director of the company Boris Nuraliyev during the traditional December partner conference[4]. In October, 2011 growth of turnover of group was expected for 26% to $768 million[4]

For comparison the previous year growth of 1C was 20%. Revenue of 1C includes the sales volume of all group taking into account results of the affiliated, joint and retail enterprises. Intra group turnover does not enter result of a company performance.

Absolute values in 1C are not called. According to CNews Analytics in 2010 revenue of the company made $608 million (18.4 billion rub). Respectively, in 2011 the group expects to earn over $814 million.

Growth in sales of the 8th version "1C: Enterprise" in 2011, according to Boris Nuraliyev, made 74.5% in dollars (67.9% in rubles). As products of version 7.7 are brought out of the price list in July, 2011 and the share of the eighth version reached 94%, it is possible to say that this indicator approximately reflects dynamics of sales of products for enterprise management in general.

1C consistently finishes software for work on the scheme of lease. According to Nuraliyev, total sales from sales of software as services for last months 2011 reached 21.5 million rubles.

  • For the first nine months 2011 revenue from sales of the 1C: Enterprise system in dollars exceeded the level of the same period of 2010 for 78.7%, the representative of 1C Alexey Kharitonov told.

2010: Sharp sales growth after crisis

Financial indicator of 1C calls only one — dynamics of change of turnover which in 2010 added 20%. In 2010 the aggregate turnover of group 1C was $608 million, the RIA Novosti agency with reference to materials of the company reported at the end of September (this assessment to Vedomosti was confirmed by the manager close to participants of the transaction).

1C does not open data of total sales. According to CNews Analytics, in 2010 turnover of holding made 18.4 billion rubles that is 15% more, than the previous year. In 2010 1C for the first time got to the rating of the largest software developers of Europe prepared by PwC and took in it the 59th place with an indicator of 65 million euros.

The sales volume of 1C with the affiliated, joint and retail enterprises, with elimination of intra group turnovers, US dollars *

File:1с доходы 2005-2011.jpg

* Slanting shading shows proportional extrapolation based on the first 5 months 2011

In 2010 sales of the licenses "1C: Enterprise" grew in dollar expression by 33% in comparison with 2009. At the beginning of 2011 growth accelerated, the first quarter became record on the sales volume of 1C: Enterprise for all years of work of 1C Company, growth in comparison with the same period of 2010 was 47%.

In the Russian market of ERP in 2010 IDC estimated a share of 1C at 26%.

The partner network of 1C: Franchising successfully develops: during 2010 the number of the companies entering it grew from 6500 to 7000. Based on the questioning which is carried out by 1C Company in February, 2011, the sales volume of software products and the services rendered by typical partner company "1C: Franchisee" in a year on average grew almost by 34%.

At the end of 2010 1C Company expected to show growth of revenue by 22% (the similar indicator was-13% the previous year), the director Boris Nuraliyev said it. The absolute measure, according to CNews Analytics, taking into account provided earlier this and the changes which happened in structure of the company will make about $620 million. In the long term 3-4 years of 1C consider the possibility of carrying out the IPO and gradually prepares for this procedure, speak in the company.

Distribution of the imported software products in dollar expression in January — November, 2010 increased by 7% in comparison with the same period last year, still without having recovered from last year's falling (  –50% in January-November, 2009).

The distribution of domestic software measured in rubles, on the contrary, gets stronger. In January-November, 2009 income from it increased by 22%, and during the same period of the 2010th — for 49%. Commenting on dynamics of sales of a flagship product, "1C: Enterprise", Nuraliyev said: "2010 gives the grounds for optimism, but not for euphoria". In 11 months of year of sale of licenses grew by 32% in dollar expression, for 25.2% — in ruble, and December will become, according to the forecasts, the most successful for all sales history of "1C: Enterprise". Income from support of "1C: Enterprise" for last 11 months of year increased by 41.4% in dollars and for 35.7% in rubles. According to IDC the share of 1C increased from 18.7% in 2008 to 22.3% in the 2009th in dollar expression.


2009: Recession of sales of own software for 35%

Revenue from sales of own software of $263 million (according to preliminary data), were reduced by 35%. Taking into account such assessment, slightly less than 14% of all sales in the software market of the Russian Federation fall to the share of the largest Russian software maker.

In 1C sales pattern multimedia segment (-52%) most strongly sank. Sales of business software decreased by 32%, distributions — for 31%. Speaking about the distribution direction of business of 1C, Boris Nuraliyev emphasized that decrease shows a segment of software of general purpose: dictionaries, translators, graphics editors. And here the anti-virus products and solutions connected with information security show sales growth (in 11 months 2009 — for 16% in rubles).

Despite crisis, sales of domestic software also grew: for January-November, 2009 for 25% (in ruble expression). At the beginning of a year in the corporate sector the decrease connected with economy of budgets, but in the end of the year was observed, on the contrary, the number of tenders increased.

Growth in times, hard for the market, was shown by the retail direction of 1C: total revenue of retail franchasing stores in 11 months of this year made 42.6 million rubles (in comparison with 32.4 million for all 2008). Sales of 1C-Softklab dropped by 19%, but remained at the level of 2007 Softwares to business applications ("1C: Enterprise") in 1C observed significant growth since September, 2009, with recovery to pre-crisis level in November-December.

2008

Revenue of the company at the end of 2008 made $406 million.

Fight against piracy

1C Company conducts active fight against piracy, including in regions — through Nekommercheskoye partnyorstvo postavshchikov programmnykh produktov (NP PPP), the associated member of Association of the enterprises of computer and information technologies (AP KIT). So, for example, NP PPP promoted that distribution of software products of 1C on the torrents.ru bittorrent-tracker was prohibited. At the beginning of December, 2007 in Rostov-on-Don the user distributing programs of 1C through a torrent service was condemned — it was the first case of condemnation for distribution of a counterfeit through Network in Russia. In November, 2008 the 16-year-old user living in Moscow was sentenced to one year of imprisonment conditionally for installation of the counterfeit software of production of 1C (1C: Enterprise).

Acquisition Buks and Avalon Style Entertainment

  • On July 17, 2008 1C declared purchase Buks officially — the Russian developer of games whose 52.9% of stocks belonged to investment funds "Finam — Information Technologies" (26.5%) and Norum (26.4%). Buks of analytics then estimated cost at $75-85 million Buk was not integrated into structure of 1C and saved a name and a command. Among the reasons for which the decision to purchase to Buk was made in 1C called the general trends of consolidation in the Russian game market, consolidation of strong teams of developers.

  • On October 30, 2008 1C announced completion of the transaction on acquisition of a share in Avalon Style Entertainment company — the famous Russian developer, the creator of one of the most popular and successful domestic series of car simulators "Four-wheel drives". As commented in the company, the signed agreement became the next step directed to strengthening of positions of 1C as the largest Russian publisher, the developer and the distributor of computer games.

Shareholder meeting defines new strategy

In the spring of 2008 1C shareholder meeting made the decision that the company should follow by creation of the diversified holding holding a leading position in the market of software in the CIS. The company agreed with the slogan "Get big-Or get niche-Or get out" (Become big – either become niche – or clean up) and made a choice for benefit of growth.

"The strategy of creation of large enterprise is a question of ambitions, - the head of 1C Boris Nuraliyev says. – We want to construct the big steady effective corporation competitive concerning other giants, including foreign".

If before 1C preferred all tasks to solve itself, then today the basic principle of the company is formulated as "Rely on own forces and cooperation with leaders". As a result, around strong head office, the group of the joint companies, strong and/or perspective in the sectors of the software market is created. Such model in 1C is considered optimal at the come stage of consolidation of IT market in Russia.

Many directions of business which were a part of head company "1C" earlier are displaid in affiliated and joint ventures:

  • development, the edition and sale of games – in JV 1s: Softklab;
  • the retail direction, the including 47 shops, in "1C: Interest", etc.

It led to reduction of revenue of head office and real situation is reflected now by cumulative indicators of group.

1C creates the companies with different extent of participation, but the joint model of ownership where company management is undertaken by the co-owner, but not the hired manager was the most effective. According to Boris Nuraliyev, the joint companies are more profitable than branches and show more effective growth of business in general. For this reason recently the company tries to transfer the subsidiary companies to structure of joint. Cumulative growth in sales of the subsidiary and joint companies of 1C holding for the first five months 2011 in comparison the same period of 2010 made 27%.

The subsidiary and joint companies of holding are established with different shares of ownership. Recently the scheme in which 1C controls 51%, and the partner - 49% is more often used. Only for the first six months 2011 7 new subsidiary and joint companies were founded. Total number of joint ventures exceeds one hundred. Among them the companies in the Netherlands, Great Britain, Hungary, Bulgaria, Germany, Latvia, the Czech Republic, Slovakia, Ukraine, Moldova, China, Uzbekistan, Kazakhstan, Kyrgyzstan, Belarus, Vietnam.

1C recognizes that the selected model does not correspond to the western theory.

"Everything that at us turned out best of all, just does not correspond to the western templates, - Boris Nuraliyev says. - In the world there is no such franchizing of information technologies anywhere. In one large country there is no such share of one accounting product. In a segment of the integrated ERP systems there is no growth of a share of the local supplier due to reduction of a share of the international vendors anywhere".

For rapid growth it is supposed to use also attraction of the supplementary capital, through share placing at the exchange (10-20%). According to the statement of representatives of the company, at the end of 2011 carrying out the international audit is supposed. For admission to the IPO this procedure should be held three years in a row therefore placement will be able to take place not earlier than 2014. To number of minuses of publicity in the company refer big openness of business, smaller flexibility and more difficult mechanisms of acceptance of business solutions, to pluses – more accurate demonstration of social responsibility of the company and also a possibility of unity of a team of employees and partners due to their possible transition to the status of shareholders of 1C. Now many would like to become co-owners of the company, but there is no mechanism accepted for all yet.

1994: The first franchasing agreements

  • In parallel 1C Company developed the partner network. Instead of discovery of a huge number of branches, the company stopped on franchizing model. The first trial franchasing agreements were signed in the middle of 1994. At that time, in experienced group there were about 50 companies whereas the number of dealers exceeded 600. In passing in to firm development of the system of the programs "1C: Enterprise", with the architecture focused on high degree of adaptivity was conducted.

  • 1995 - Release of 1C: Accounting 6.0 for Windows. Number of staff was 65 people.

  • 1996 - Release of the 1C: Enterprise 7.0 platform.

  • In the summer of 1996 there was the first product of a system — "1C: Trade", and as a result by the end of the year the number of the franchisee increased up to 414. In the same 1996 1C started development and sale of computer games.

  • 1997 - Release of the 1C: Enterprise 7.5 platform

  • 1998 - Number of staff reached 143 people.

  • 1999 - Release of the 1C: Enterprise 7.7 platform

  • 2002 - Release of the 1C: Enterprise 8.0 platform

  • 2004 - Release of the 1C: Manufacturing Enterprise Management 8.0 system

  • 2006 - Release of the beta of the 1C: Enterprise 8.1 platform

  • In 2007 the first release of the 1C: Consolidation program was released.

1992: Release of the Mini-accounting program

  • The idea to create the accounting program arose in 1992. Then financial accounting in the new company the brother of Boris Nuraliyev — Sergey Nuraliyev who professionally was engaged in automation of accounting transactions managed. He developed the automated workplace of the chief accountant of 1C Company. This product in April, 1992 was presented at an exhibition Komtek and attracted extraordinary high interest from the enterprises. Miniaccounting of 1C, unlike traditional computer programs, was rather simple "boxed" solution in installation providing a possibility of replication that quickly made it popular in a business environment.

  • 1993 - Release of the Accounting for DOS program

1991: Creation of 1C company

From approval of the management of institute and Nuraliyev's consent, a part of activity began to be conducted on behalf of 1C Company founded in 1991.

Originally 1C was the name of own search program: no more 1C (second) was required for obtaining the information required. The choice of the company name was extremely successful — in any reference book or the exhibition directory on the first place there was always 1C. Besides, "with" — the only key on the keyboard which writing on Cyrillics and Latin match.

The brother of Boris Nuraliyev is Sergey (at the left) at the beginning of the 90th developed the automated workplace of the chief accountant of 1C company
The brother of Boris Nuraliyev is Sergey (at the left) at the beginning of the 90th developed the automated workplace of the chief accountant of 1C company

In 1991 there was a creation of network of dealers for implementation "Lotus 1−2−3 version 2.2 Russian"

1987-1990: Goskomstat. Background

Since 1987 — Boris Nuraliyev worked at design institute of Goskomstat where held a position of the manager of self-supporting department. Already then Nuraliyev together with the command created a system with natural language queries, similar to modern search engines, within the order for creation of base of statistics of the national economy of the Soviet Union. Then two familiar Nuraliyev — Vadim Rappoport and Yury Krichiver developed the device which called "the electronic teletype". In fact, it was means for connection of the IBM compatible computer to cable communication networks which those years was much. Nuraliyev wrote the program for the device. About 6 thousand such devices were as a result sold.

Signing by self-supporting department of Nuraliyev of the contract for distribution spreadsheets of Lotus 1-2-3 became the next step on the way of creation of the company. At first sight, this task seemed unsolvable: in 1990 the distribution kit of the program cost about $500 dollars while the average salary in the country was about $12. However the enterprises had means as well as the needs for modern software tools of accounting and the analysis what spreadsheets at that time were. Besides, successful sales of the electronic teletype helped Nuraliyev's team to acquire partner base. The self-supporting department became the most profitable at institute. Then also the 1C company appeared.

Principles of work of 1C Company

Are admitted to 1C and the following uniform corporate principles of work work:

  • Be guided by satisfaction of real needs of the mass user.
  • Work it is profitable.
  • Be a reliable and profitable partner, fairly to belong to partners, end users, employees.
  • It is good to work, it is better to do and sell products competitors.
  • Rely on own forces and on cooperation with leaders.
  • Study others experience, but think the head.

Software development

1C delivers the broad spectrum of programs for office and the house numbering now more than 10000 positions from the warehouse. From own developments of 1C Company programs of the 1C: Enterprise system and also products for home computers and the educational sphere are most known.

The 1C: Enterprise system is intended for control automation and accounting at the enterprises of the different industries, types of activity and types of financing, and includes solutions for manufacturing enterprises (complete solution "1C: Manufacturing Enterprise Management 8"), trade enterprises, products for accounting ("1C: Accounting"), for accounting in budget organizations of payroll calculation and personnel management, the various industry and specialized solutions developed by both 1C Company, and her partners.

The key direction of development of a system of programs is development of new generation of management and accounting decisions on a technology platform "1C:Enterprise 8" and implementation in them the extensive functionality intended for the organization of management of the modern enterprise.

1C pays much attention to programs for home computers and the educational sphere. Among the most known own developments — series of the training programs "1C: Tutor", "1C: School", "1C: World of the computer", "1C: Educational collection", "1C: Informative collection", series "1C: Audiobooks" and also games "Il-2 Attack Plane", "Il-2 Attack plane: The forgotten battles" and Pearl Harbour, the publishing projects "Vivisector", "In the Back of the Enemy", "Lock On. Hot rocks", "Blitzkrieg 2" and others. Along with distribution of own products, 1C supports the biggest warehouse in Russia according to domestic house software, being the largest distributor of such suppliers as Buk, Nikita, Nival and others.

Distribution

1C Company actively develops the direction of distribution of business software products. In distribution of programs of other vendors 1C acts as the official distributor of software of Microsoft, Novell, Symantec, Computer Associates, Acronis and other foreign firms and also is a distributor of products of the Russian software companies: PROMT, ABBYY, INEC, Kaspersky Lab and more than 100 others.

Products

In general, products which are turned out by 1C can be classified as follows: technology business platforms, information products, economic programs, telecommunications and databases, multimedia products and programs for the house, training and methodical materials.

Technology platforms

1C:Enterprise 8 includes:

  • 1C: Accounting 8, 1C: Payroll and HR Management 8, 1C:Enterprise 8. Management of manufacturing enterprise, 1C:Enterprise 8. Trade management.

Information products

  • ITS, 1C: CONSULTING. STANDART, 1S: KONSALTING. ISSUER, 1C Elite. Estimate consulting, Taxes and fees in schemes, 1C: Guarantor Legal support, 1C: Standard Complete legislation of Russia and others.

Telecommunications and databases

  • 1C: E-mail, 1C: Archive, 1C: Primary documents.

Multimedia products and programs for the house

  • Games,
  • educational programs,
  • audiobooks,
  • training and methodical materials.

Notes