How did import substitution of IT affect business of foreign vendors? A look from Russia

Foreign vendors try not to hand over positions in the Russian market, however a number of the companies are forced to change the strategy of business. In particular, some foreign producers try to issue the product in domestic "wrapper", someone gives the products and technologies to the OEM-supply channel. Independent Russian divisions to which the rights to production of software and the equipment under a new trademark are assigned are created.

Vasily Babintsev, the marketing director of DIRECTUM company, notes that the share of the western companies in a segment of the state corporations and OGV decreases, and this process is noticeable.

Foreign vendors should get out of the situation, creating joint solutions with the Russian companies, to build in the products domestic developments. And such offers already are, - Babintsev says

According to Galina Akhmerova, the deputy CEO of BARS GROUP for commerce and business development, significant compression of the market in dollar expression reduces volumes of divisions of the global companies working in Russia.

It becomes more difficult to foreign companies to work at the Russian market - the register of domestic software is replenished and begins to influence really purchases of import software in state structures and the companies with state participation, - she is sure.

Tagir Yapparov, the chairman of the board of directors of IT Group also speaks about small reduction of a share of foreign vendors in a state segment. According to it, in the field of state procurements business of most the foreign companies having "vis-a-vis" in the register of domestic software, not really strongly, but was reduced. Last year they were focused on the commercial sector and also developed and supported the partner solutions created by the Russian companies on the basis of foreign platforms and components.

Ivan Taranenko, the head of department of complete solutions of Gendalf Group, considers that import substitution in Russia affected negatively business of many foreign companies, and especially those which are focused on a public sector. At the same time, global change of strategy or leaving from the market, according to it, did not happen.

Mostly it is connected with the thought-over and rather soft strategy of our state on import substitution. Strategy considers realities and allows to pass gradually when preserving a trend to domestic developments. Together with it gives the chance in complex cases to remain on foreign software and the equipment, - Taranenko notes.

According to the sales director EDMS THESIS of the company Haulmont Aleksandra Nazarova, import substitution negatively affected business of foreign vendors in Russia and it, according to him, the obvious fact.

Of course, such changes could not but influence their vision and the strategy of further activity in the territory of the Russian Federation. Some vendors together with large Russian integrators began to create "offal", based on the known foreign systems. Examples set. This step allows to be engaged in implementation of the planned projects long ago so far, but cardinally does not change a situation, - Nazarov considers.

Vladimir Andreyev, the president of DocsVision company, tells that in 2015 many import vendors fixed significant growth in income – customers aimed "buy for the future", understanding that they on import substitution of means will hardly give them in adequate volume, and hoping to win a situation estimation period, development of strategy and plans. Last year, according to Andreyev, they already fixed recession of sales.

The strategy of the foreign companies in general is identical – to strengthen market promotion of the commercial consumers who are on the periphery of import substitution policy and to be integrated with the Russian products if not in reality then to all appearances, trying to become the producer "a domestic product, - the president of DocsVision is sure.

Maxim Bolyshev, the associate director of department of banking software of RS-Bank of R-Style Softlab company, says that for the IT companies interaction with state structures brings a notable profit share. According to him, import substitution could not but affect the general indicators of business of the western companies in Russia.

They can lose the main thing – an opportunity to participate in tenders on delivery and implementation of the products in state institutions. With respect thereto some foreign vendors changed the strategy of business in Russia. As one of measures they create the Russian divisions as independent legal entities and assign them the rights to production of software and the equipment under a trademark of these new organizations", - Bolyshev tells.

About same also Igor Litvinov, the head of department of system architecture of LANIT-Integration company speaks (enters into group of LANIT):

The foreign companies rather seriously treat this process. Practically all started OEM programs (original equipment manufacturer; sale of the equipment under a name and a brand of other organization) and a beydzh-inzheniring (release of the same product under different trademarks). But many were not limited to it and now seriously study a question of transfer of production to Russia and possibilities of the conclusion of special investment contracts which among other give the status of domestic manufacturer.

Similar data are provided by Alexander Belov, the director of the department of system engineers of Compulink Group:

The western companies were forced to give the products and technologies to the OEM-supply channel. It and financial losses since "for a brand" you will not expose a margin any more. It and risk to grow up on behalf of the OEM-partner of the strong regional player with own production. Meanwhile, exactly it is the import substitution policy purpose. Therefore even we move to situations with OEM-resale of the western products by the Russian companies in the necessary direction. If only the got profit on resale went for own development and creation of production base.

Evgenia Naumova, the chief of the department of corporate sales in Russia of Kaspersky Lab company, on the example of the market of cybersecurity, says that customers leave foreign anti-virus products for protection of workstations and file servers, mail servers, Internet gateways.

Both the Russian, and foreign companies adapt to import substitution. Domestic suppliers develop strategies on transfer of users to the Russian analogs with the minimum costs for technical works and training. The foreign companies look for alternative ways to remain in our market. One of such options - cooperation with the Russian producers, selling the solutions as OEM, or presetting them on assembly steps of the hardware systems, - she considers.

According to Elena Golovanova, the advisor to director general "MVP "Svemel", practice shows that foreign vendors try not to hand over positions in the Russian market. Considerable financial resources help them to use all opportunities for fixing of the positions in the software market. The foreign companies actively use mechanisms of certification of software on security requirements that considerably increases trust to such software products.

Implementation by foreign vendors in development processes of software of national standard 56939-2016 "Data protection. Development of the safe software. General requirements" ensures safety too and it is designed to support trust to foreign software. Though the standard will become effective only on June 1, 2017, - she adds.

Lev Matveev, the chairman of the board of directors of SearchInform, says that foreign vendors can sympathize: they lost large emerging market.

But, personally my opinion: not we became the initiator of this game in "not free market". Therefore foreign partners received the logical response to actions of own government, - Matveev considers.

Ilya Viger, the CEO and the co-founder of VR Concept, considers that import substitution affected positively how foreign customers began to treat the Russian market of software. According to him, the foreign companies working in the Russian Federation paid attention to the Russian developments.

Vladimir Kotov, the deputy CEO SoftBalance, adds that many clients of the company having parent organization abroad in branch passed (or pass now) to domestic software.

Some experts do not notice changes in business of the foreign companies in connection with the import substitution policy pursued in Russia. According to Vladimir Vertogradov, the managing director of NORBIT (LANIT group), they and now successfully implement plans.

Vladimir Vertogradov remembers how in one of an interview the CEO of SAP CIS Pavel Gontarev said: "To us in SAP earlier, and now it is necessary to prove in each transaction that our solutions suit the customer better".

Sergey Galeyev, the CEO of Addreality company, adds that import substitution on foreign vendors had no special impact also in the field of Digital Signage. However here, according to him, it first of all is connected with the fact that the share of the Russian Digital Signage market for the foreign companies makes only 1.8%.

The CEO of Ascon Group Maxim Bogdanov notes that despite sanctions and import substitution policy in the different industries, any foreign company did not leave the Russian market of engineering software. Ascon and other Russian developers still work in the conditions of the high competition, he says.

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