Enterprise Software (Russian Market)

Segments

• CRM (Russian market)
• Enterprise Management Systems (Russian ERP Market)
• EDMS (Russian market)
• Russian HR-tech market
• Business Intelligence (Russian market)
• LMS (Russian market)

2022

Russian companies have spent a record on the purchase and development of software. Leading regions

Russian companies in 2022 spent a record on the purchase and development of software - expenses reached 310 billion rubles, which is 2.7 times more than 5 years ago. Analysts of the audit and consulting network FinExpertiza disclosed such data on September 6, 2023.

According to the study, the investments of the corporate sector in the development of a new and purchase of software in 2022 increased by 13.2% compared to 2021, or 36.2 billion rubles. On average, one company accounted for 3.8 million rubles of expenses.

In the industry, the main investments in the creation and purchase of computer software in 2022 were made by enterprises in the field of information and communications (this is directly the field of IT, as well as telecommunications, television and radio, publishing, production of various content; 131.3 billion rubles), manufacturing industry (61.2 billion rubles), wholesale and retail trade (35 billion rubles), professional, scientific and technical activities (this includes jurisprudence, audit, consulting, engineering and technical design, scientific research and development, advertising; 27.5 billion rubles), as well as the transport industry and warehousing (14 billion rubles).

After the departure of Western vendors such as SAP, Oracle, Microsoft and others, which accounted for a significant part of the Russian software market, the largest Russian companies, for which computer security and stable functioning of the IT infrastructure are an indispensable condition for work, significantly increased the demand for domestic software, says Elena Trubnikova, President of FinExpertiza. - The crisis situation created a window of opportunity for Russian developers and gave impetus to the active development of the domestic IT industry. The increase in computer software costs is also associated with the modernization of the existing IT infrastructure and long-term digital transformation programs implemented by Russian corporations. The national software market, additionally stimulated by measures of state support for the IT industry, is actively developing, the process of replacing Western software is gradually accelerating. In this regard, we expect a further increase in corporate spending on computer software.

Among the Russian regions, Moscow holds the undisputed primacy in terms of total corporate expenses for the creation and purchase of software. The largest number of enterprises are concentrated in the capital, their total spending on software amounted to 189.9 billion rubles - about 61% of all-Russian corporate investments in For 2022. This is followed by St. Petersburg (45.1 billion rubles), Moscow region (10.9 billion rubles), Krasnodar Territory (10 billion rubles), Tatarstan (7.2 billion rubles), Tyumen region (7.1 billion rubles), Krasnoyarsk Territory (3.6 billion rubles), Sverdlovsk region (3.1 billion rubles), Novosibirsk region (2.5 billion rubles) and Bashkortostan (2.3 billion rubles). These are economically developed regions with a large number of enterprises.

The study for 2022 also says that on average, large and medium-sized companies spend over a million rubles a year on software in a quarter of the regions (21). In most entities (47), the costs for each enterprise range from one hundred thousand to a million rubles. And in 17 regions, the corresponding spending does not reach 100 thousand rubles. On average, companies in the republics of Kalmykia (0.4 thousand rubles per company), North Ossetia (1.9 thousand rubles) and Dagestan (3 thousand rubles) spend a minimum of money on software.

Named regions with the highest corporate software costs

Half of Russian companies could not renew licenses for foreign software

Half of Russian companies in 2022 could not renew licenses for foreign software. This is stated in a survey by the A2:Research Research Center, the results of which were released at the end of May 2023.

Almost a third of entrepreneurs complained about problems with technical support (32%) and payment for services (31%), and every tenth complained about the lack of stable work of foreign software. First of all, the problems affected state organizations and large commercial companies. According to Pavel Kalyakin, General Director of MyOffice, during 2022 the number of applications for the introduction of domestic software instead of foreign software increased sixfold. The greatest threat is the use of foreign software at critical information infrastructure (CII) facilities: the lack of updates is fraught with risks in the field of information security ( IS), explained Mikhail Nazarov, ESA PRO Service Director.

Half of Russian companies in 2022 could not renew licenses for foreign software

The tangible consequences were due to foreign manufacturers who remotely blocked the operation of their devices and software, said Roman Karpov, director of strategy and technology development at Axiom JDK, in a conversation with Vedomosti. If the National Payment Card System (NSPK) had not transferred the Mir payment system from Oracle Java to the Russian Java platform in advance, the transactions of the departed Visa and Mastercard could not have been serviced in the Russian Federation, he notes.

The A2:Research survey also showed that for 58% of entrepreneurs it is important that the software used in their companies be developed in the Russian Federation. Also, 57% of respondents said that they had already switched to domestic software in 2022.

As part of their research, A2:Research analysts interviewed 1,200 entrepreneurs and top managers from retail, production, transport, telecom, IT, etc.^[1]

Software Market Trends

The company Sissoft"" analyzed the structure of demand for software 2021 and examined changes in the preferences of software customers. Analysts of the company note that 2022, in terms of sales, will only strengthen existing trends. The company announced this on January 24, 2022.

The main driver in the software market is still business changes associated with the pandemic. Everyone understands that in the medium term (at least 2-3 years), companies will have to work in fundamentally new conditions in terms of operating hours, employee motivation, security, and IT infrastructure maintenance. This fact forced the business to reconsider its approaches to the purchase and use of software products again.

Geographical "blurring" of commands and a hybrid format of work will lead to the fact that vendors that support the remote work infrastructure and offer appropriate solutions will increase their share in the software market: from managing remote desktops and mobile devices, to software for dedicated teleconferencing and teamwork.

New manufacturers are entering the niche, offering solutions with fresh licensing systems and more attractive prices. Therefore, in the segment of tools for remote work, competition will only intensify, and the buyer will have greater opportunities to choose software in terms of quality and price.

The unambiguous and long-term trend that is observed is an increase in demand for products related to information security. {{quote 'This trend will be intensified by the course of import substitution. We see that in recent years, Russian manufacturers of information security solutions have become leaders in the local market, especially in large companies, enterprises with state participation and among state customers, "explained Ilya Panteleev, General Director of Sissoft. }}

In 2021, such solutions were especially in demand as: firewalls the latest generation, subsystems of control and protection against, confidential information leaks subsystems of control of privileged users - employees who have access to servers to critical information systems. Business digitalization also leads to the fact that type protection subsystems become relevant attacks , DDoS helping to ensure the constant availability of the service for both employees and customers, - said the Dmitry Kovalev head of the information security department of Sissoft.

Subsystems of user control and monitoring will also be in demand in terms of scope of work, efficiency, time and behavioral analysis in order to be able to control the situation and build graphs of connections and main communications. This will be useful when identifying internal violators, - said Dmitry Kovalev.

Sissoft analysts record a steady trend towards the creation of internal development units in companies in various industries. If earlier such a strategy was chosen by financial organizations, now retail is actively going into development.

Development costs are rising, and companies are tempted to 'save' development providers' profits and 'keep' them. In addition, in-house IT development structures are often more flexible and can respond more quickly to changes in sales channels. There are companies that need to be equipped with the solutions necessary for development, testing, and command management. This trend creates an increased demand for relevant products, - said Ilya Panteleev.

The vast majority of industry customers are interested in products that implement this technology, such as Autodesk solutions. In the medium term, we see the use of products of this family not only for the design of buildings, the creation of construction estimates, but also at the stage of support and repairs during operation. This is a strong trend for years to come, - explained Alexey Pazhiltsev, head of the department for work with key vendors of Syssoft.

Sissoft experts identified five main trends for 2022

• The number one trend is the increase in software consumption associated with remote work, information security and the involvement of "remote" employees in the life of the company.
• Trend number two - uncertainty in the timing of equipment deliveries, which will indirectly affect the needs of the business in the supply of complex project software.
• Trend number three - the growth of the software segment, solving the problems and management of IT projects, organizing development and testing due to the emergence of internal departments to create their own digital products in all industries.
• Trend number four - the development of the market will be determined by state programs for import substitution and the introduction of specific technologies, for example, BIM.
• Trend number five - Russian and foreign IT products will rise in price, taking into account rising inflation and labor costs of software developers.

In 2022, we changed the approach to developing business areas, betting on a more detailed study of the tasks and problems of companies that they face. This is our response to the market's needs for strong expertise and a reliable technology partner. This approach gives customers confidence that cooperation will be effective: as a result, companies will jointly determine the priority task, and the software provider will find a solution for it and implement it. This is the path all resellers will take sooner or later. Only in this way in 2022 it will be possible to achieve high-quality sales growth, "sums up the president of Sissoft Maxim Tikurkin.

The study of software sales took into account transactions carried out with individuals and legal entities in the period from January 1, 2021. Excluded subcategories that demonstrated high growth due to the "low base effect." The results are adjusted for the company's marketing and commercial activities to eliminate factors associated with business growth. To draw conclusions about the change in customer preferences, the data of the Customer's Voice surveys conducted by Sissoft in 2020 and 2021 were taken into account.

2020: Growth in the volume of Russian corporate software by 6.7%, to 61.43 billion rubles - IDC

The volume of Russian corporate software at the end of 2020 reached 61.43 billion rubles, which is 6.7% more than a year earlier. In American dollars, sales of such software decreased by 4.5%. Such data on June 24, 2021 were cited by IDC analysts.

They linked the differences in market dynamics in rubles and dollars with the devaluation of the Russian currency. Positive dynamics in rubles were achieved due to a less prolonged lockdown compared to many countries and, as a result, less negative consequences for the Russian economy, the study explains.

The Russian corporate software market added 6.7% over the year

In the past [2020], thanks to a short lockdown, many organizations in Russia worked without serious restrictions, and the pandemic became a catalyst for digital transformation, says the research program manager, IDC Russia and. - As CIS Natalia Vinogradova a result, demand for corporate application software in the country has been robust.

At the same time, as the analyst noted, with the growth of geopolitical risks, more and more Russian customers are starting to invest in alternatives to Western solutions and platforms.

The share of the largest functional market - enterprise resource management solutions (ERM) - increased in 2020. Demand for customer relationship management (CRM) and industrial applications (OMA) solutions has been robust throughout the year. The volume of investment in supply chain management ( SCM ) applications has not changed in 2020 compared to the previous year.

The leading positions in the market are occupied by SAP and 1C - in terms of the share of the domestic market for business automation software in monetary terms, the latter lags behind SAP by 3.2 percentage points. Over the year, the Russian company increased its market share, which was facilitated by the policy chosen by the state on import substitution in IT.

In general, market shares at the end of 2020 were distributed as follows:

• 42,4% — SAP
• 39.2% - "1C" (versus 36.7% in 2019)
• 7,4% — Microsoft
• 4,8% — Oracle
• 3.6% - "Galaxy"

Data for 2020, IDC

According to the head of 1C Boris Nuraliev, the price of a license from a Russian company is much lower than that of SAP, therefore, in the number of automated jobs annually, the share of 1C exceeded 80% (as of June 2020). At the same time, 300 thousand are programmed in the 1C language. IT professionals.

The leading vertical markets in corporate software spending were manufacturing, retail, resource industries and construction.^[2]

See also

• Office Software (Russian Market)
• Russian Software (Domestic Software)
• Software developers in Russia

Notes