Rush demand and shock loads. How Russian IT developers survived 2022, having grown by more than 100%

How the developers of Russian IT products grew

TAdviser analyzed the financial results of the 200 largest IT companies in Russia for 2022 and identified among them developers of their own products that managed to increase revenue by more than 100%. There were exactly 10 of them, all of them are given in the infographic and table below.

Annual growth of 100%, and even more so by 200, 300 or 500, is not at all a typical situation for any business, except for startups in the first or second year of life, which are growing from a zero base, or the results of large mergers. Among the analyzed developers there are none.

The lowest base - 338 million rubles of revenue for 2021 - among those analyzed was BaseAlt, which has been operating in the market for more than 20 years and produces open source operating systems.

Formally, the youngest company (it is also the fastest growing) - Isource - was formed in 2020, but not from scratch, but on the basis of Gazpromneft's own products for digitalization of procurement, supply and logistics. In 2021, it has already earned more than 2.5 billion rubles in revenue.

Astra Group of Companies is perhaps the only company on the list active in the field of acquisitions. But among its purchases, mainly, the very startups that are growing rapidly, but so far do not make a dominant contribution to total revenue.

"MyOffice" in the last three years before 2022 showed multidirectional dynamics. Its revenue in 2019 was 773 million, in the next - 460 million, and then 841 million rubles - good growth in 2021, but not exceeding 100%.

Thus, the results shown by 10 developers can be considered really outstanding. But 2-3-4 times growth cannot pass without difficulties and serious business transformation. About how it was, TAdviser asked to tell the heads of IT companies directly.

^{Source: TAdviser 2023}

How the attitude of customers towards Russian IT products has changed in 2022

Anton Shmakov, Technical Director of Astra Group of Companies:

Dramatically. If a year ago some companies were in no hurry to start import substitution programs, search for analogues on the Russian market and preferred to wait out in case foreign suppliers return, now you see a completely different picture. Customers are increasingly choosing domestic solutions that meet corporate standards for security, reliability, and performance. Of course, the current situation spurred the process of import substitution, and we really observe a change in the paradigm of customer thinking not only in the public sector, but also in the corporate market. They clearly saw those risks that previously seemed negligible, and now they themselves initiate projects to transfer their infrastructures to Russian software.

Companies go into import substitution gradually from a weighted position, because they are well aware that they will live long enough in the model of coexistence of inherited import solutions and new domestic products.

We are at the stage of the development of the Russian IT market, when the client supports every undertaking to use domestic technologies, sets excellent tasks, controls the result. In turn, the developers began to offer significantly more mature solutions than a few years ago. The volume of high-quality high-tech production of IT products in the Russian Federation is growing. We understand: nothing develops a product like its mass application and direct feedback.

Elena Bocherova, Executive Director of Cyberprotect:

Much depends on the segment in which the company operates. In our segment - backup and data protection, the situation has changed a lot. Until 2022, the market was occupied mainly by foreign companies, all of them stopped their work in Russia. These solutions are critical for business, any organization that deals with data must have a backup - this is a natural protection against their loss and downtime. Therefore, interest in Russian products has multiplied, sales have increased, and, for example, the number of trials downloaded on our sites, the burden on our presale direction. Along with the growth of interest, the landscape of product requirements has changed, this is the most important point that characterizes this period.

Pavel Kalyakin, CEO of MyOffice:

The events of 2022 led to significant changes in the market landscape and labor market. Many companies, including government agencies, realized the seriousness of the situation and faced a real need to switch to independent import solutions. Previously, the main task of customers was the need to urgently replace certain software products. Now customers are increasingly coming for a comprehensive solution that would take into account all the needs of the customer, often expanding the previously used functions of foreign products. We also see a significant increase in the number of pilot projects that customers are starting: in 2022, about 300 pilot projects were carried out (an increase of 6 times compared to 2021), and only in the first half of 2023 we initiated 192 projects.

Customer maturity is reflected in the formation of an integrated industry approach to the construction of an importo-independent ecosystem - the time for the sale of "box solutions on the shelf" has come to an end. At the same time, the quality of the software has noticeably increased. Many domestic products being developed today are not only not inferior to foreign counterparts, but also surpass them in a number of aspects. Russian manufacturers are more responsive to the requests of specific customers and are focused on solving their main tasks.

Sergey Trandin, General Director of BASEALT:

Customers have become more demanding. The Russian market for IT products is becoming more mature, and the possibilities of choice are expanding. In an effort to prioritize better solutions, customers are tightening their selection criteria. Now they are interested not only in the presence of the software product in the Unified Register, but also in its security, ensuring the life cycle, ON technological independence of the development infrastructure, compatibility with Russian software and equipment, the presence of technical support in the region of client presence, the possibility of training IT specialists and users.

Ivan Chernov, UserGate Development Manager:

Of course, it has changed. First, Russian information security customers saw that domestic solutions exist and can be effectively used. And secondly, we note an increase in the level of confidence in Russian decisions, which is due to an almost radical change in priorities after the flight of foreign vendors, the level of trust in which, on the contrary, objectively decreased. Your code, your own development, your own, and not external decision centers - all this adds advantages to our products in the context of customer trust.

Rustam Rustamov, Deputy General Director of RED SOFT:

In a nutshell - from skepticism to trust. In 2022, the number of RED SOFT customers increased 2.5 times, and the demand for our products - many times.

If earlier Russian software was chosen mainly because of import substitution requirements, today the customer prefers it, because it has proven its maturity and reliability, in conditions when foreign IT giants left the market, leaving whole IT infrastructures "unattended."

Today, the transition to domestic products is massive. A significant part of organizations critical for the country is already at the migration stage, the rest are laying a budget and conducting pilot projects.

In addition to government agencies and state corporations, it is necessary to note the increasing interest on the part of private business and even an ordinary user, who increasingly began to choose Russian-made software. In the current conditions, this is a natural reaction of market participants, since, unlike foreign vendors, Russian IT companies provide uninterrupted technical support and regularly release updates. In addition, domestic software meets information security requirements, which is especially important in the current geopolitical situation.

Another important factor that customers positively assessed in 2022 is the flexibility of Russian developers. We are ready to develop and refine products for the needs and tasks of customers. As an example, a system for "soft" migration RED ADM, which allows you to transfer the IT infrastructure gradually, preserving the heterogeneity of the environment.

What priorities had to be solved due to the sharp growth in sales volumes and the scaling of the business

Anton Shmakov, Technical Director of Astra Group of Companies:

In 2022, an avalanche-like increase in demand and a tenfold increase in pilot projects were noted. It was a challenge for us and we accepted it. We have seriously increased our industry expertise and will continue to move in this direction, to master new segments.

Our business and product strategy has helped us prepare for the challenges we and our customers face. Astra Group of Companies has grown and has noticeably intensified in all directions. This applies to both the state's 3.5-fold growth (since the beginning of 2022 and to date) and the product portfolio. The company has become even more active than before in working to expand the functionality and improve the quality of its software - it must close the maximum system tasks of customers and satisfy a variety of market needs.

Our product development roadmaps have been consolidated, and our infrastructure-as-code approach - automation in action to improve the quality and speed of all services - has been successfully implemented. We continue to work on improving reliability and safety indicators: we develop and integrate all group products with our SMTs, and implement secure development processes.

At one time, we took a course on a product and service approach: it is very important to accompany each client, since any task related to the customer's infrastructure is our responsibility too. And today we see that we are moving in the right direction. Now many IT companies are just starting their first movements in this direction, we began to develop this much earlier.

We launched a large project Astra Consulting, focused primarily on system integrators and the largest infrastructures. Our experts take on the migration and digitalization of turnkey IT systems, ensure their full support. We are ready to design infrastructures based on our software, refine Open Source solutions for specific requests and adapt foreign products for updated systems.

Ivan Chernov, UserGate Development Manager:

UserGate, against the background of sharply increased demand for Russian information security solutions - as one of the few that already have their own finished product - faced the need to forcibly, earlier than the schedule, force a business strategy aimed at transforming a small IT company into a large Russian vendor that successfully imports products of world information security leaders.

Shock loads on technical support, a shortage of inventory of the product, the need to urgently try on universal solutions for unique cases in a serious stream of new customers, an explosive expansion of the staff of developers and backofis - all this had an impact on business processes.

Therefore, UserGate, experiencing rush demand, at the same time took concrete actions to strengthen its positions: rebuilt the strategy, logistics, increased and strengthened the team - including the support, developed a roadmap for bringing products to market, created stocks of NGFW platforms - the flagship of our brand and the driver of the information security market in Russia as a whole - actually became a new company, built the best version of himself, paying a lot of attention and time both to the development of the technological line for the development of current products and to increasing the level of client service.

Elena Bocherova, Executive Director of Cyberprotect:

It is important for customers to get a domestic product that can be built into their infrastructure as comfortably as possible and maintain the usual functions. This caused a large demand for forced development of the solution, taking into account the requirements of users. We rebuilt the roadmap and, most importantly, were able to quickly and multiply increase the staff, most of whom are developers. We received specialists who worked in the departed companies, our HR team, together with direction managers and timlids, worked in an emergency mode - this was very important, because in IT the main asset is people, qualified specialists. So our team has more than doubled this year. It should be noted that the support measures states introduced earlier also helped here, and we also received a RFRIT grant to finalize the product. Everything has turned out, and every day we are moving towards becoming a segment leader and industry standard.

Pavel Kalyakin, CEO of MyOffice:

To adapt the business to the new market situation, we have changed our business strategy and approaches to hiring people. Today MyOffice is focused on working in the Russian market, our main task is to prioritize the fulfillment of current requirements by Russian business. We also decided to significantly expand product teams, service and consulting divisions, as well as strengthen the development team.

Due to the sharply increased flow of requirements from end customers, MyOffice also adapted the structure of software production. We have standardized product release cycles and taken a number of measures to accelerate the release of secure and certified solutions. Usually, it takes 1.5 to 2 years to release a certified product. And thanks to the introduction of secure development processes in the company according to the SSDLC methodology (GOST R 56939-2016), we were able to certify "Mailion. Certified "in just 9 months, which is an excellent indicator of the maturity of processes in our company.

For all categories of our clients, we also offer a full range of consulting services, including audits of the IT infrastructure and data storage, development of consolidation and migration scenarios, management of changes in the IT infrastructure, development of the concept of coexistence of various data formats and documents. We help customers comfortably, seamlessly and without stopping the organization's business processes to go through all stages of the process of switching to domestic IT solutions, including helping to train employees of enterprises to work with new technologies using specially prepared training programs.

Sergey Trandin, General Director of BASEALT:

The sharp increase in sales did not take us by surprise, we prepared for it in advance. Therefore, "emergency measures" were not needed to cope well with the avalanche-like growth in demand for our products.

The company has built a developed ecosystem of partners in advance, including distributors, resellers, cloud providers, system integrators and OEM partners. With companies that have long and successfully collaborated with BASEALT in various areas of activity, we synchronized road maps to provide customers with a full range of services for the purchase, implementation and further use of Alt operating systems. Together with partners, the company is improving the technical presale system convenient for customers and a three-level technical support system. Authorized training centers "BASEALT" operate throughout the country - they are deployed on the basis of universities and CT partners. The marketing and PR departments of BASEALT also release information materials in a timely manner so that customers can receive complete and up-to-date information about our products, their advantages for the state sector and business.

In 2022, we optimized the company's business processes so that departments work as clearly and harmoniously as possible. The staff of the company has also grown.

Rustam Rustamov, Deputy General Director of RED SOFT:

We are faced with unprecedented demand for our software, which has set us the task of increasing the staff in the shortest possible time for a high-quality and timely response to the requests of potential customers. We have significantly expanded the IT team, strengthening technical support.

Moreover, the market situation led to a reduction in the time for refinement of existing solutions and the release of new ones, which required an increase in the number of employees in general in all areas, from highly qualified developers to sales and marketing specialists.

In addition, with the increase in sales of our software, the number of users is constantly growing. To solve the issue of training, we are developing new courses, expanding the network of authorized training centers in which exclusively certified teachers teach.

The most important task not only for our company, but also for the market as a whole, remains the creation of a full-fledged ecosystem of Russian products. Therefore, we continue to pay great attention to the development of the technology partner network, ensuring product compatibility.

The challenges we faced in 2022 required an integrated approach and adaptation to new conditions. RED SOFT successfully coped with them thanks to a strong team, optimization of business processes and effective cooperation with other market players.

What are the expectations for 2023

Anton Shmakov, Technical Director of Astra Group of Companies:

In 2022, the revenue of Astra Group increased by more than 2.5 times compared to the same period. To date, if you look at the period of 6 months from year to year, we maintain the pace.

We have a developed strategy and business model for the development of the group of companies until 2030. It spells out all forecast figures for all markets and systems. We have a lot of them, not only the operating system, but also virtualization, DBMS, VDI, backup, and so on. For each of them, the plans are being fulfilled, we are very pleased. All our product teams produce consistently high results, and even more - we see a synergistic effect from complex sales and joint use cases.

Pavel Kalyakin, CEO of MyOffice:

MyOffice expects a further increase in demand for domestic software products. The main driver of growth will be the desire of organizations to fulfill the order of the Russian Government to accelerate the transition to domestic software. So, without exception, all state structures, as well as owners of CII facilities, are obliged to completely replace foreign software by January 1, 2025. In our experience, the transition of a large organization to domestic software products requires an average of 1.5 to 2 years. We expect further growth in the number of pilot projects. In the first half of 2023 alone, we started 192 new projects, which is approximately 60% of the number of projects completed for the entire last year.

Ivan Chernov, UserGate Development Manager:

I believe that the information security market in Russia will continue to grow, and to a large extent it depends on the gradual realization of the fact that there will be no return to the past, which means that you need to choose Russian solutions here and now. By the structure and dynamics of appeals to our company, we see how those customers who last year still thought about replacing foreign products with ours are actively introducing them today, and the number of requests for piloting our solutions is growing exponentially.

Rustam Rustamov, Deputy General Director of RED SOFT:

The share of Russian software will only grow. We expect that domestic developers will continue to strengthen their positions in the market, as well as use the accumulated experience and competencies not only to develop existing software, but also to create new high-tech products.

Sergey Trandin, General Director of BASEALT:

In the future, we expect more restrained growth rates for IT companies, including BASEALT. Most likely, it will be 15-25%. The first wave of the transfer of IT infrastructures to Russian solutions has passed, now customers have to systematically build and develop the systems built.

Elena Bocherova, Executive Director of Cyberprotect:

It is clear that there will be no such sharp jump in the market, but I think we have prepared for confident growth. We reinvest additional revenues in the development of new areas, form a strong stack of solutions for fault-tolerant infrastructure software with data protection from loss and leakage. Another area that we pay special attention to is the construction of an open ecosystem of Russian software, the development of compatibility between domestic vendors. There is a lot of work ahead, many still continue to use foreign solutions, it cannot be said that the process of switching to Russian is proceeding smoothly, even taking into account the risks of being left without support and updates. But I think that without slowing down the pace of development and maintaining a dialogue with customers, we will occupy a niche of the industry standard in our segment.