The largest SAP solution support outsourcers in Russia. TAdviser 2024 rating

In a new survey on the largest solution support outsourcers SAP in, Russia read about trends in this segment, learn how experts assess its prospects for the rest of the decade from 2024.

With the departure of SAP from Russia, product updates from the vendor were unavailable, there was also no way to solve any problems through SAP technical support. Russian integrators have to maintain stable operation of systems and refine solutions in accordance with customer needs. In parallel, the import substitution process is unfolding, but experts warn that it cannot be called an easy walk.

The new rating of the largest outsourcing companies providing support services for solutions of the German company SAP in Russia includes 11 integrators. The leader of the rating was IBS with revenue of more than 1 billion rubles. The top three also included ITPS and Sigma.

The total revenue of all participants in the rating amounted to 6.7 billion rubles.

TAdviser estimates the volume of the Russian outsourcing market for supporting SAP solutions at the end of 2023 at 14 billion rubles, with an increase of 15%.

Market participants give a variety of signals, trying to build long-term forecasts of its dynamics before the end of the decade.

According to Sergey Khayurov, director of the SAP Basis competence center of Jet Infosystems, in 2023 the revenue of system integrators in the SAP support segment increased due to the arrival of new customers from among those who were left without service due to the vendor's departure. In addition, large players were forced to reconsider approaches against the background of the economic situation due to the growth of salaries, the retraining of specialists from SAP to 1C.

In our opinion, a large amount of transition from SAP to other solutions in the enterprise segment is not expected. Therefore, against the background of the rise in the cost of IT services, an increase in their volume (due to the 4th support line) and wage growth, we will observe the positive dynamics of this segment at the level of at least 10%, the expert predicts.

Sergey Solomakhin, Director of SAP Solutions at SIGMA, considers it unlikely that the revenue of system integrators in this area will continue to grow, taking into account the pace of import substitution. In addition to SAP's exit from the market, the Russian public sector is now regulating the amount of costs for foreign software, which also limits the possibility of increasing revenue through SAP technical support. This dynamics will continue in the future due to the policy of import substitution of foreign software - the market volume will decrease. The share of SAP software will gradually decrease and, ultimately, may remain with only some private companies. But even they can begin to reorient to import-substituted solutions when the transition to Russian software becomes widespread.

At the moment, the expert recalled, according to the decree of the President of the Russian Federation of March 30, 2022 No. 166, government agencies and state-owned companies that have critical information infrastructure facilities are obliged to use domestic systems. But gradually, this trend is likely to continue to spread. Later, import substitution will reach companies for which, due to their industry specifics, there are now no analogues to SAP solutions.

According to Dmitry Fedorochev, Director for the Implementation and Development of Corporate Information Systems (CIS) ITPS, there is a slight decrease in activity in the SAP support segment due to the lack of new large implementation projects. The main direction - the development and support of existing solutions - allows us to talk about the stability of the segment, despite the departure of the vendor. Enterprises continue to use existing systems, developing them, which creates additional tasks for consulting companies.

The economic situation certainly has an impact on the IT market. Customers, for example, strive to optimize costs. However, despite the influence of the political and economic situation, in the future 3-5 years, the segment will remain stable, the expert is sure.

Artem Redkov, director of support and premium services at TerraLink, believes that the segment is not subject to explosive growth and is rather moving to the conservation stage.

Some of the companies that decided to stay on SAP until 2028-2030 will continue to develop solutions, thereby increasing the scope of work for integrators. Others will gradually import substitution, which will lead to a reduction in the market volume.

If by the end of 2022-2023 the market volume can reach ₽12-15 billion, then by 2028 expert TerraLink expects a decline of up to ₽10 billion.

Most companies have already decided on the choice of their integrator and the desire to support the remaining SAP systems, and revenue is expected to grow only among those players who have been able to prove themselves well.

The business continues to turn to large integrators who are able to carry out the fourth support line (replacement of the vendor) to solve critical problems. The need for expert services is growing, since not all integrators can provide the level of expertise that can help the client stabilize the system and give it the opportunity to exist even taking into account the increase in business data and the number of integrations in it.

In the next 3 years, the demand for consulting should grow in the field of building a composable architecture, testing import-substituting solutions.

Artem Redkov expects that closer to 2028 the volume of request for SAP support will begin to decrease, so it is important to build support and services for Russian solutions in time, because now vendors are in their infancy, and if integrators can offer a qualitatively new level and end-to-end support for import-substituting solutions, this will increase revenue.

A comprehensive assessment was proposed by Maria Burenkova, head of sales at TIMIDEA GROUP. According to her forecast, the volume of the Russian segment of SAP solutions and its local alternatives may reach revenue of 20-25 billion rubles by 2028.

The main drivers will be strengthening state support for domestic IT solutions, the development of cloud technologies, and the improvement of local products.

Difficulties will be associated with the high cost of switching to import-substituting products, resistance from business due to the need to restructure processes, as well as information security risks. Thus, the expert believes, the market will grow, but its structure will change: instead of SAP solutions, the main share will be occupied by Russian analogues and hybrid support schemes.

Following the results of 2022-2023, the SAP solutions support segment in Russia has undergone significant changes. After SAP officially announced its departure from Russia in 2022, Russian companies began to actively look for alternatives, including localizing technical support and switching to domestic counterparts. In 2023, there was an increase in interest in transferring SAP systems to the cloud infrastructures of Russian providers, which is associated with problems with the purchase of equipment and an increase in information security requirements. The volume of requests for such services increased by about 30% over the year.

Until 2028, the dynamics of the SAP solutions support and replacement market in Russia will be characterized by the growth of the local solutions and services market, import substitution of ERP systems, an increase in the role of cloud solutions, technological and personnel challenges.

Taking into account the departure of SAP and the business needs to support and develop ERP systems, there will be an increase in the number of partners providing custom support services for SAP systems, and there will be more companies developing analogues of SAP for different industries.

It is assumed that the SAP support market in Russia will grow by 10-15% per year due to the active migration of customers to local solutions and an increase in the competencies of vendors.

In the coming years, there will be a gradual abandonment of SAP in favor of Russian developments (for example, 1C ERP, Galactica). The process is complex and long-term, but by 2028 the share of companies that have completely switched to domestic software can reach 50-60% (depending on the industry).

Demand for cloud ERP systems will continue to grow due to easier access to technology and reduced infrastructure costs. Russian providers (for example, T1 Cloud) are already recording a 30% increase in interest in the clouds, and this trend will intensify due to the transition to flexible and secure platforms.

The shortage of personnel capable of servicing SAP systems will continue in the coming years, which will slow down the pace of migration. This will also lead to an increase in the costs of training specialists and the creation of specialized training programs.

The segment is dominated by large integrators. Only they have enough resources for large technical support teams, as well as for complex expensive projects to develop new software for import substitution.

In the future, a situation may arise when it will become unprofitable for large players to maintain large SAP teams due to low demand, then small companies tied to specific customers will prevail in the market. It is also possible that technical support teams will be fully within the enterprise that uses SAP products, such a configuration can already be found in the segment.

The supply structure remains stable. Some integrators, indeed, are reoriented to work with Russian software. They launch pilot projects, gain competencies and gain experience. Market leaders maintain their position while continuing to develop and support SAP solutions while exploring the possibilities of working with domestic products.

The reorientation will last about three more years. Then the niche will finally be occupied by companies with the highest specific gravity of the examination. IT integrators are expanding their expertise by expanding their network of partnerships with Russian vendors. At the same time, no one stops working with foreign software and equipment. The demand for services for servicing imported solutions is still increasing and has not yet reached a peak.

At the same time, the future is still outside SAP, and most integrators are looking at Russian solutions or trying to develop their own. Large integrators, supporting current SAP solutions, are slowly training teams to develop, support work with domestic products, and this should bring results in the next 2-3 years.

In terms of the number of personnel in support and development, Russian vendors are much inferior to SAP, and the need for refinement and updating of products is constantly growing due to the growth of Install base, and here vendors and integrators can work for each other. Integrators may not take the initial volume of questions and problems with the client, analyze, reconcile and trace them and, if there is a problem in the product, will issue a detailed problem to the vendor so that the developer can only prepare a solution to fix the problem.

There have been no visible changes in the SAP business user structure. Some companies are even starting projects to move from legacy SAP solutions to newer ones. So far, no large company has been able to fully replace SAP ERP.

As Artem Redkov said, customers have problems with keys and licenses, with access to fixes issued by SAP, there are big problems with localization, which now the business has to implement independently or resort to the services of contractors. However, the company has learned to solve all these difficulties in one way or another.

Sergei Khayurov noted that problems at the level of code errors in the already implemented functionality come to the fore. Functional support includes the adaptation of the system in a very short time, which is necessary due to changes in legislation, including tax, or as it was after changing the retirement age, etc.

There are difficulties with the introduction of functionality for labeling goods. This is especially true for retailers who are required to label shoes, clothes, food and other products. In general, the expert stressed that almost everything is clear with difficulties - they are known, and now large IT companies are thinking about how to work with this, "the expert said.

The problems faced by SAP users have remained the same, says Dmitry Fedorochev. Current areas of support include the same aspects as before, but approaches to solving problems have adapted to the current conditions. Changes occurred rather in the methods of their solution: instead of contacting the vendor, users now rely on the support of integrators.

As Sergey Khayurov said, in the context of SAP import substitution in the market, it is worth highlighting several trends. Thus, the specialists of "Jet Infosystems" recorded a large number of migrations to 1C, which began long before 2022. And the departure of the vendor only spurred demand. For example, many transitions occur from SAP HCM to 1C: Payroll and HR Management. But the plans of some companies to switch from 1C products to SAP, on the contrary, have been canceled or suspended.

In addition, import substitution will be positively affected by the share of companies that are now actively working on the transition from SAP to 1C. They are characterized by a low degree of customization of processes, and they do not belong to the enterprise segment. And there are many such companies.

Former branches of foreign companies should not be overlooked either. They have historically used SAP, but centrally. Now we see how they localize SAP systems or migrate to 1C. In this matter, everything decides which option is more profitable, - said the expert.

According to him, today there is no full-fledged replacement for the SAP system on the market. There are point implementations of solutions from such manufacturers as 1C, Galaxy, Turbo ERP, etc. However, there is no talk of a comprehensive alternative yet. In the next five years, other systems will appear on the market, for example, ERP, database, etc., but it will take more time to work out the integration between solutions. Therefore, if we talk about a full-fledged migration from SAP products, then at best this is a question of 5-10 years, says Sergey Khayurov.

According to our data, 60% of Russian companies in enterprise continue to use SAP. At the same time, 10% of the market is trying to reorient itself to other solutions, the expert noted.

Sergey Solomakhin also testifies that at the moment there are no systems on the Russian market that can be fully called analogues of SAP products. However, domestic IT companies are actively working in this direction, including SIGMA.

For example, we develop our own ERP system, relying on the best practices in this area. In general, SIGMA is engaged not only in SAP, but also in 1C, custom development, has many of its own products. Over time, we will definitely replace SAP in full, the expert is sure.

According to him, each enterprise builds its own priority for the transition from SAP products to domestic counterparts. The most active transition from SAP to 1C is in the direction of human resources and payroll systems.

Widely known 1C products on the market are rapidly developing in both functionality and performance. In modern conditions, Russian solutions in some cases even surpass foreign ones, - said Dmitry Kichko, vice president of Borlas for consulting.

Artem Redkov said that now there are active requests from customers and appropriate work is underway on testing methodologies for new products: everyone wants to understand whether the new vendors will withstand the load that SAP solutions could withstand, whether the integration bus will withstand it. In addition, it is important to understand what bottlenecks will appear in the behavior of the system under load, what point of failure of the system under load, all this, from methodology to the installation of tools, is in high demand.

What we are now seeing and working out in the market is the need to evaluate and test existing solutions. They are all imperfect and cannot fully replace what SAP gave, but it turns out to grope for the composable architecture, the expert said.

He noted that at this stage the market is trying to make a single solution from the products of several vendors, using their strengths and closing bottlenecks in terms of integration with new products. As for ERP systems, many customers look towards such vendors as 1C, Galaxy, Global ERP. Many ERP solutions have recently changed a lot in terms of the platform technology stack, are actively developing and meet the needs of the market.

TerraLink focused on three main solutions in terms of the development of this area: GlobalERP, 1C and Galaxy. Based on these products and integration buses, specialists build composable solutions, while they should be more flexible and easy to provide business functionality, and improvements should not take years.

Inhouse systems appear on the market, but they are not focused on the mass market. As practice shows, such systems always develop towards the needs of the internal customer. This leads to the fact that the entire market is forced to wait for the development of its requirements.

Companies that have the opportunity not to rush to switch to domestic solutions will go in this direction without haste, assessing the experience of the first five-year implementation plan. For the most part, companies evaluate the replacement of all SAP binding with solutions from Russian vendors, and are gradually choosing core ERP systems.

Of course, you can stay on SAP for decades, and we see examples of companies where SAP 4.6-4.7 systems work, but these are units, this is no longer a market, the expert stated. - Therefore, integrators need to develop practices in business consulting, and technical architecture, and services, and support, but already under the vendors of the Russian Federation.

As Dmitry Fedorochev said, during import substitution, business customers really set the task not only to replace, but also to maintain the current functionality, to leave the current performance, without increasing the cost of supporting solutions.

Some companies are forced to gradually switch to domestic software. They automate specific processes and expand functionality or take small subsidiaries as pilot projects to form a working solution and further replicate it. Others are developing current solutions, including on SAP, while looking at the market in terms of monitoring the development of Russian solutions and major successful import substitution projects.

During import substitution, customers face a shortage of personnel in the market, incomplete functionality of current Russian ERP solutions, weak performance on big data. Taking into account these factors, some customers consider the development of their own ERP, but it must be understood that the development cycle is more than one year (Western ERPs reached the current level within 30-40 years) and requires billions of rubles of investment.

Based on the experience of other countries, we summarize that the market will overcome difficulties by launching more than a dozen systems on Russian software into operation in 3-7 years, "said Dmitry Fedorochev.