Interview of TAdviser with the managing partner and founder of AT Consulting company Sergey Shilov

Sergey Shilov: In information technology field there came times of changes – the market, obviously, completely regenerates. The basic reason is in economic factor. First, money for IT began to be selected much less. Secondly, priorities seriously changed.

How did the market till 2014 look? It developed in many respects due to marketing of large western players it seems HP and IBM which were focused on sales of the products – hardware and the software. All sales went through large system integrators which core business saw distribution of the western technologies.

Customers bought expensive products, and rather often decisions on purchase were emotional, without the accurate weighed approach – why we buy this solution, but not another. Very few people really asked himself a question what benefit for business will be brought by this or that project.

At the moment the situation exchanged cardinally. If to speak about customers, they spend money only under tough performance indicators of each project. At the same time many big companies or state institutions which are engaged in work with a retail segment really depend on IT and continue to spend money. But each project miscalculates, and in customer company there is always a specific person who is responsible for obtaining business results.

So if to speak about drivers of the market, they are in area of an economic benefit from these or those investments.

The western vendors cannot seriously influence sales any more. First of all due to the lack of money at customers, and in the second – owing to political aspects. Marketing efforts of the foreign companies are strongly leveled today.

Besides, in 2015 we saw considerably bigger demand for custom development. I would not tell that the boom of sales of domestic software is observed, but even more often the companies address development to order which is conducted based on Open Source and which is executed by the Russian companies. It serves as a substitute of investments into licenses of expensive foreign products.

Summing up the result, one may say, that money for IT even in rubles is spent less. Priorities cardinally changed. Money goes for development to order, services in completion of the implemented systems or implementation of simple solutions.

If to speak about the forecast for 2016, I think that all these trends will remain. There is no spare cash in the market. But the companies which provide services and are capable to give to customers business result using IT, will prosper.

Sergey Shilov: If to look at what happened to Chief information officers in the western market at the beginning of the 2000th, then it is possible to draw a conclusion: the average term of professional life of the Chief information officer in the company did not exceed two years. Requirements were very tough. It was the heaviest and risky position among all others. At us now the same.

During growth of the market of CIO worked at the positions long. Now they are very often changed. Requirements are ultraboundary. The chief information officer needs to understand all technologies, adequately to protect the position and at the same time to be the expert in business questions. Often he is asked to make promises that there will be a business result in a situation when it has not enough powers. So rules of the game became not absolutely transparent.

The Chief information officer's life is very heavy now. Budgets are limited, tasks – are not limited. Due to the crisis phenomena, it became much more difficult to prove purchase of expensive software or the equipment. And if the company nevertheless goes on such step, responsibility completely lays down on the Chief information officer's shoulders. And as I already told, it can not always provide efficiency of the solution owing to the objective reasons.

Sergey Shilov: Because we competently build project accounting in the company, we can effectively control expenses. We provide to customers first of all IT services – our business is not started on iron which suffered more than other segments. There is a lot of factors, but if in brief: the business model of AT Consulting allows to adapt quickly and effectively to changes in the market, including the most dramatic.

Still moment. We always worked for business result, contacting first of all to business customers, and already then to Chief information officers. At the same time we understand importance of Chief information officers, they are really key players in the market.

Till a certain moment our strategy was perceived by the market as exotic. It was cheaper to sell to Chief information officers expensive solutions with a good margin, but not to suffer with business result. Now AT Consulting time has come. Some more years we will be beneficiaries of these changes.

Sergey Shilov: We sell our services in achievement of results not to the top officials, but deputies who are responsible for finance, marketing, sales. Of course, too we interact with Chief information officers because differently it is impossible to implement anything.

Sergey Shilov: This strategy is not unique if to take the western market. In the Russian market it not that it is unique, but is very rare. Many try to declare this strategy, but in reality it is very difficult to support it. There are small commands which are engaged in it, but these are collectives up to 50 people.

Sergey Shilov: Very seriously all industries whose daily transactions do not depend on IT sank. If the companies or state institutions are not engaged in retail, do not service a mass segment, then they tried to cut down expenses on information technologies to the maximum. If you service 10 clients, then can write everything in the diary. Well and vice versa, retail banks, telecoms, Internet and business, Treasury, Rosreestr and others – all of them very much depend on IT. They reduced IT budgets too, but is not so considerable: for 10-15% in rubles.

Sergey Shilov: Besides, because Rosreestr and tax aytizavisima. But there is also one more nuance – till 2014 at many state institutions the IT budget was distributed on regions. Now there was a centralization. Therefore in reality the market sank stronger, than by those estimates which are published.

Sergey Shilov: Larry Ellison great told – the industry of IT is more subject to a fashion, than a fashion. We have a complete asymmetry of information. Only the few people really understand technology pluses and minuses. In difference, for example, from the fashion industry where any can pass an opinion on any subject of clothes. Any cannot pass an opinion on IT.

All IT industry is filled with type abbreviations ERP CRM, ECM in which everyone tries to enclose sense, but not everyone understands what stands behind these terms in reality. Some idea is on sale. As any smash hit, the idea is drawn sooner or later and stops being popular.

If to speak about Big Data is same BI which is present 10 years at the market. Strictly speaking, it a little in what differs from Big Data. The only difference is an analysis of unstructured data. There is an opportunity through Facebook, for example, to look for the additional information. Banks when try to make the decision on the credit, can analyze your posts in social network and draw a conclusion as far as you correspond to a profile of the good client. It abruptly, but in fact, behind it does not cost any new technologies.

Therefore Big Data will never die, it just will be called in a different way. Besides in BI all already invested a fantastic sum.

If to speak about marketing cliches, then all of them leave over time or change. A lot of money was spent for ERP, and now this segment fell. It is already commodity, in it there is no secret for anybody, everything is clear to all. But so far the ERP market still big, including due to support.

Sergey Shilov: So far import substitution is that customers spend for the western products much less. But it is connected not with policy, and with their high cost. There are state agencies in which more attention is paid to import substitution. AT Consulting works in a public sector since 2009, and I can tell that all this story preference was given to development to order by the Russian programmers, but not purchase of the western solutions.

Sergey Shilov: Yes, it is the truth. At the moment we do projects for state agencies on PostgreSQL and free software products of Ruby, etc. This quite strict requirement. Just nobody spends money for licenses. Anybody.

Feature is that all our customers buy development to order. Nobody leaves some practices in our intellectual property. We have own solutions and products, but we receive the main revenue from custom development based on Open Source.

Sergey Shilov: Of course, the western vendors are in very difficult situation. Their Russian colleagues so far also did not feel changes to the best. I do not see the companies which were won. "Forecast", for example, lost. The western players in general fell into a terrible state. The market was reduced several times, and for them it is shock, Russia entered in top-3 among the countries buyers of software and the equipment.

Sergey Shilov: The most popular idea – creation of OEM-products. Look for the Russian partner who does the "Russian" solution based on vendor.

Sergey Shilov: No, same it is quite easily calculated. It is more popular for those who trade in iron. And in a case with software – if you say that it Russian, and will become clear then that it not so, will be scandal. Why do we need it?

Sergey Shilov: In my opinion, they are waited by different destinies. I can tell, the company has perspectives when it is market. Thereby it is possible to motivate personnel. It is much more difficult to captive companies to motivate people. The only exception – SberTech which shows permanent growth. But as soon as stagnation as soon as the parent company begins to feel bad begins, employees begin to work worse at once. In it a problem.

Sergey Shilov: No. Those realities that were in the market of information technologies till 2014, will not return any more. Many players in crisis – it is unclear whether they will survive.

Besides, the complete opacity reigns in the industry. Look at any rating. How many companies in the market have the audited reporting? There is no trust to digits.

Thus, in purchase of any companies in IT in present conditions there are no perspectives. We in general always were for organic growth and never bought the company. We employ, we raise people, we invest in their development. Now after the difficult period in the market a certain number of players who will cost a certain money and who will learn to earn this money in fair competition will take shape.