IT market of Kazakhstan

Digital Kazakhstan

Main article: Digital Kazakhstan

Internet regulation in Kazakhstan

Main article: Internet regulation in Kazakhstan

ICT market of Kazakhstan

Main article: Kazakhstan ICT market

Internet of Things, IoT, M2M (Kazakhstan market)

Main article: Internet of Things, IoT, M2M (Kazakhstan market)

Smartphone Market in Kazakhstan

Main article: Smartphones (Kazakhstan market)

Processing of personal data in Kazakhstan

Main article: Processing of personal data in Kazakhstan

Online Education (Kazakhstan Market)

Main article: Online education (Kazakhstan market)

2024

Kazakh Ministry of Ministry of Digital Development named 3 main export IT products

In 2023-2024, the volume of exports of digital solutions of Kazakhstan in the field of public services (GovTech) reached 1.36 billion tenge, or $2.7 million at the exchange rate as of November 26, 2024. E-government products are shipped to countries such as Tajikistan, Togo and Sierra Leone. This was announced at the end of November 2024 by the Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan Zhaslan Madiev.

Our digital developments in the field of GovTech are reaching the international level. The main exported products are Smart Data Ukimet, Smart Bridge and Gov.kz, Madiev said.

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Freepik

Smart Data Ukimet is an information and analytical platform designed to collect, store and comprehensively analyze data accumulated in information systems of state bodies. All personal and sensitive information of citizens and businesses goes through the encryption procedure and, in the form of a depersonalized array of information, enters the data lake. In turn, Smart Bridge is an information and communication service in the form of the Service Showcase platform, aimed at simplifying the processes of integrating information systems between government agencies and private business. Gov.kz is a single platform for Internet resources of state bodies.

Madiev also said that at the end of 2023, the volume of exports of IT services in Kazakhstan reached $529 million, while in the first half of 2024 this figure amounted to $306 million. Products of Kazakhstani developers are delivered to 86 countries around the world. In order to expand the sales market, long-term partnership programs are being developed with well-known global companies. It is said that Kazakhstan is one of the 30 most digitized states on a global scale and ranks eighth in terms of online services.^[1]

The number of IT companies has grown by 16% in three years

By the end of 2024, the number of IT companies in Kazakhstan reached 18,683 - this corresponds to an increase of about 16% over a three-year period. The country's authorities actively support the development of IT technologies and services. Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan Zhaslan Madiev spoke about the situation in the industry on November 26, 2024.

According to him, the average monthly salary of IT specialists in the country for three years increased more than one and a half times - by 54%: by the end of 2024, it reached 673 thousand tenge, or about $1350 (at the rate of November 26, 2024). This reflects "high demand for skilled personnel and competitive working conditions." Approximately 187 thousand people work in the IT sector of the republic, which is 12% more than three years ago.

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Freepik

It is noted that rapid growth is demonstrated by the Astana Hub international technology park, created in 2018. It is the center for the development of IT startups in Kazakhstan, uniting more than 1.5 thousand participants, of which 1102 are local companies, and another 437 are foreign.

One of the key areas of development of the IT sector in Kazakhstan is the strengthening of human resources. The Tech Orda program has been launched, aimed at preparing more than 20 thousand. IT professionals by 2025: this initiative stimulates education in private IT schools. In general, the creation of an innovative infrastructure and the active support of private IT companies and startups have become the priority tasks of the state. In this context, Kazakhstan is actively developing state support measures to stimulate various initiatives in the IT sphere, opening up new prospects for technological entrepreneurship and international cooperation.^[2]

In five years, the volume of exports of IT services in Kazakhstan has grown to $600 million

Information technology exports from Kazakhstan reached $600 million in five years, which is 20 times more than in the previous 5-year period. Growth indicators were announced at a meeting of the country's leadership with representatives of large technological business in November 2024.

It is noted that a certain contribution to export is made by the American company EPAM Systems, which in 2024 exported services worth more than $40 million through the Astana Hub technopark.

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Prime Minister of Kazakhstan Olzhas Bektenov stressed that Kazakhstan should become a territory of total digitalization and accelerated development of artificial intelligence, the country has great potential.

EPAM Systems is represented in seventeen cities of Kazakhstan, where about one thousand specialists work. The company's training center has trained more than five thousand professionals in the field of information technology.

As part of the Tech Orda education program, the company has taught over seven hundred students programming skills in Java, Python and Data Engineering technologies. In 2024, three hundred more students were selected for training.

The company plans to participate in the creation of an artificial intelligence laboratory at the National Center for Artificial Intelligence of Kazakhstan. The project aims to develop research initiatives and create new technological solutions.

The Government of Kazakhstan instructed the Ministry of Digital Development, Innovation and Aerospace Industry to strengthen support for joint projects in the field of digitalization.

Development of export of IT services is part of Kazakhstan's digital transformation strategy aimed at diversifying the economy and creating high-tech jobs^[3]

UAE will build data centers in Kazakhstan

In May 2024, it became known about the conclusion of an agreement for the construction, data centers which was concluded by Kazakhstan and the UAE. The corresponding memorandum on investment cooperation was signed by Minister of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan Bagdat Mussin the chairman of the board of the investment holding "" Samruk-Kazyna Nurlan Zhakupov and UAE Investment Minister Mohamed Hassan Alsuwaidi.

According to the latter, this agreement emphasizes the UAE's commitment to further strengthen relations with Kazakhstan. In turn, Nurlan Zhakupov noted that the creation and development of data centers is crucial for the technological development of Kazakhstan. They serve as the basis of innovation and contribute to the economic development of the country, he added.

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Embassy of Kazakhstan in UAE

The goal of the cooperation is to create a basis for investment in data center projects that will be implemented in Kazakhstan. A number of initiatives are planned to facilitate effective cooperation and knowledge sharing.

The UAE and Kazakhstan are long-standing partners in the field of IT projects. So, in February 2024 between Kazakhstan and the company Presight AI Ltd. (UAE) signed an agreement on a project to create a supercomputer in Kazakhstan and build an appropriate data center.

The main goal of creating a data center in the Ministry of Ministry of Digital Development of Kazakhstan is the introduction of a national language model based on neural networks and using the computing power of a supercomputer in 2025. Details of the new data center, such as location and investment, have not yet been determined by May 2024.

Earlier in 2024, President of Kazakhstan Kassym-Jomart Tokayev at a government meeting stressed the importance of digitalizing the economy and distributing artificial intelligence technologies, and also announced the start of work on the creation of a high-performance supercomputer.^[4]

2023: The volume of services in the field of computer programming in Kazakhstan for the year increased by 41.1% to 1.1 trillion tenge

At the end of 2023, in Kazakhstan, the volume of services provided in the field of computer programming, as well as consulting and other related services, reached 1.1 trillion tenge (about $2.3 billion at the exchange rate as of September 18, 2024). This is 41.1% more compared to the figure recorded in 2022. Such figures are given in the materials of the Finprom resource, which TAdviser got acquainted with in mid-September 2024.

The largest volume of services in the sector under consideration fell directly on software development - 599 billion tenge ($1.25 billion). Year-on-year growth was 60.3%. This is followed by consulting and practical services in the field of information technology (79.2 billion tenge, annual growth - 2.5 times) and software support (72 billion tenge, plus 86.7% year-on-year).

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From a territorial point of view, the most services in the IT sector were provided in Almaty - in the amount of 579.3 billion tenge ($1.21 billion), 52.2% more than a year earlier. Astana is on the second line - 402.5 billion tenge ($0.84 billion), plus 25.2% per year. Next, Karaganda (17.3 billion tenge, plus 0.7%), West Kazakhstan (16 billion tenge, annual growth of 3.8 times) and Kostanay (11.4 billion tenge, plus 78.7%) of the region come with a noticeable margin. The least services in the sector were provided in Ulytau (192.1 million tenge), Turkestan (542.1 million tenge) and Zhetysu (1.2 billion tenge) regions.

According to the results of the first half of 2024, the volume of services in the field of computer programming, consultations and other related services in Kazakhstan reached 611.3 billion tenge ($1.28 billion) - 29.2% more than in the same period of 2023. Most of the costs fell on the development and testing of the program code: 265.9 billion tenge. This is followed by consulting services in the field of information technology (50.3 billion tenge), as well as support for software, software products, databases, Internet resources and information systems (45 billion tenge).^[5]

2022: Kazakhstan IT services market volume reaches KZT772 bn

The volume of services provided Kazakhstan in the field, computer programming consulting and other related services, at the end of 2022 amounted to 772 billion tenge (approximately 114.8 billion at the rubles average exchange rate ruble to tenge for 2022 according to the data) CENTRAL BANK OF THE RUSSIAN FEDERATION against 646 billion tenge for 2021. Of these, services worth 2.6 billion tenge (or 386.6 million rubles) were provided in rural areas. countries

In the regional context, the most services fell on the cities of Almaty - 380.5 billion tenge (approximately 56.58 billion rubles), Astana - 321.5 billion tenge (47.8 billion rubles) and Karaganda region - 17.1 billion tenge (2.5 billion rubles). The least services were provided in the Ulytau region (a total of 124.2 million tenge, or 18.5 million rubles).

In the structure of computer programming services, the largest volume fell on software development, which amounted to 373.7 billion tenge (approximately 55.6 billion rubles at the average Central Bank exchange rate in 2022).

58.2 billion tenge (or 8.7 billion rubles) was allocated for the management of information and communication infrastructure within the framework of the formation and development of state electronic information resources and systems.

The least services were provided in the field of cybersecurity - only 8.3 billion tenge (approximately 1.2 billion rubles).^[6]

2020-2021

Kazakhstan introduced a digital tax for foreign Internet companies

At the end of November 2021, deputies of the Senate of the Parliament of Kazakhstan adopted amendments obliging foreign Internet companies to pay tax for money earned in the country. The digital tax will be officially introduced from January 1, 2022. From that day, foreign Internet companies selling their goods and services in Kazakhstan will have to pay value added tax (VAT). Read more here.

Kazakhstan IT market valued at $1.35 billion

By the end of 2020, the volume of the IT market in Kazakhstan exceeded $1.35 billion, and the number of companies operating in the country representing this industry amounted to more than 10 thousand. Such data in November 2021 was cited by ComputerWeekly in an article on the development of information technology in Kazakhstan.

The publication says that the IT sector of Kazakhstan receives great state support, providing ample opportunities for the digital transformation of the state and commercial sector. The main of this large-scale development was the Digital Kazakhstan program, launched in 2018, as well as local technology centers created to support startups.

The IT market of Kazakhstan at the end of 2020 is estimated at $1.35 billion

Pavel Koktyshev, who previously worked as Deputy Chairman of the Board of the National Infocommunication Holding "Zerde," and by November 2021 the head of the fintech hub of the International Financial Center of Astana (AIFC), noted that the IT sector of Kazakhstan is an ever-growing ecosystem, including technologies for the public sector, smart city and finance.

The government provides huge financial and non-financial support to the IT industry, and the largest projects are being implemented for the needs of the state, he stressed.

Within the framework of the AIFC, there is a technopark of IT startups Astana Hub. Its chief operating officer, Abay Absamet, says the launch of the Digital Kazakhstan program and the creation of Astana Hub, the first platform for developing IT products for the non-state market segment, have become a big incentive factor.

By November 2021, 558 Astana Hub residents enjoy tax and other benefits. For two and a half years, they earned a total of 166 billion tenge ($383 million) and attracted $111.7 million in investments, grants and loans. Thanks to tax breaks, IT companies saved $34.4 million, these are good results that need to be developed, Absamet noted.

By November 2021, 558 Astana Hub residents enjoy tax and other benefits

The main objectives of the program were to accelerate the pace of economic development of the Republic of Kazakhstan and improve the quality of life of the population, as well as create conditions for the transition of the economy to a fundamentally new trajectory - the digital economy of the future, he added.

The article notes that the digitalization of the public sector has brought some success. More than 90% of public services in Kazakhstan by November 2021 are available digitally, they are used by about 10.7 million people every year, saving Kazakhstanis about $21.5 million.

The Government of Kazakhstan intends to increase the export of IT solutions to $500 million and train up to 100 thousand highly qualified IT specialists by 2025. In 2020, exports were measured at $33.6 million, and in January-September 2021 - $117.3 million, Absamet cites data. Such results were achieved through the creation of a catalog of IT products and a program for adapting such solutions to the needs of the markets of the USA, Europe, Southeast Asia, the CIS and the Baltic countries. In addition, Astana Hub interacts with large technology companies such as MTS, Yandex, Mail.ru Group, Sber and Huawei, he said.

Aidana Aituarova, CEO and co-founder of Cerebra, which develops AI-powered software for early stroke detection, says costs to enter the IT market in Kazakhstan are relatively low.

Because the IT market is mostly not mature enough, there are many opportunities to quickly build solutions, test, test and bring to commercial access without intense competition, "she said.

Mainly custom software solutions, proprietary products and equipment are exported from Kazakhstan

According to Pavel Koktyshev, by November 2021, Kazakhstan, if we talk about the IT industry, mainly custom software solutions, proprietary products and equipment are exported, and in the future the list will be replenished with scalable services, IT outsourcing services, freelance, etc.

Kazakhstan's IT companies have strong engineers, says Doszhan Dzhusupov, CEO of Parquor, which provides smart parking as a service. The fact that the founders of Yandex came from Kazakhstan is evidence of the high level of Kazakhstani IT specialists. The economic efficiency of R&D is the main force of Kazakh IT companies, he added.

IT companies in Kazakhstan receive many preferences from the government, which helps us develop rapidly, "says Zhandos Kerimkulov, CEO of EGISTIC, which offers a set of digital applications for agricultural management, ranging from procurement and search for personnel to leasing equipment and consulting services. - For example, EGISTIC is a member of the Astana-Technopolis special economic zone, which allows us to be exempted from a number of taxes. It is also relatively cheap to create IT products in Kazakhstan. The salary requirements for our programmers are not so high, because they work more on enthusiasm and for practical experience.

Koktyshev added that the Kazakhstan market gives startups the opportunity to pilot their developments and interact with large local and international corporations, and also opens up opportunities to enter neighboring markets like Russia, China, etc.

According to Absameta, the main problem for Kazakhstani IT startups is their orientation to the domestic market. Aituarova from Cerebra noted that for her company, the greatest difficulties are related to legal aspects, since Cerebra software works with medical data, so certification is required in each country.^[7]

2016

Kazakh e-commerce market grew by $100 million over the year

Since 2014, the Kazakh e-commerce market has grown by $100 million, its volume in 2015 is $800 million. Slightly more than 7% were revenues from online purchases from the total retail market, the volume of which experts estimate at $1.67 trillion, reports forbes.kz.

Konstantin Gorozhankin, President of the Association of Kazakhstani Internet Business and Mobile Commerce (AQIB), notes: "E-commerce is the only segment of the economy that shows growth in the current crisis due to lower resource prices." In 2015, experts noted the intensive development of online lending services, against the background of a decline in lending in the banking sector. So, the MoneyMan.kz for the year grew 4 times.

Data centers and clouds standardized in Kazakhstan

National standards for data centers and clouds are approved and will be applied in Kazakhstan from January 1, 2017.

The national holding "Zerde" within the framework of the application of the information and communication platform "electronic government" developed such standards as ST RK TIA-942-A "Telecommunications infrastructure of data centers," ST RK DSP-IS 0101_1.0.0 "Compatible clouds" and ST RK DSP-IS 0102_1.0.0 "Architecture for cloud management." On October 13, 2016, the Scientific and Technical Commission of Technical Regulation and Metrology approved them.

From January 1, 2017, according to the order of the Committee for Technical Regulation and Metrology of the Ministry of Investment and Development of the Republic of Kazakhstan, the standards come into force.

2014: Expert RA Kazakhstan

The revenue of leading Kazakh companies in the field of information and communication technologies in 2014 increased by 12%, but this is the merit of individual large players,^[8] believes^[9] experts of the rating agency RAEX ("Expert RA Kazakhstan"), which compiled the ranking of IT companies.

According to IDC, in 2014, the IT market of Kazakhstan in dollar terms decreased by 17.4% mainly due to a decrease in the supply of equipment and licensed software by 19% and 18%, respectively.

The market was poorly affected by the devaluation of the national currency and deteriorating external conditions - a decrease in oil and metal prices, the devaluation of the ruble and the decline in the Russian economy. These factors will put pressure on the market in the short term, experts say^[10].

Most participants in the RAEX survey tend to negatively assess the current market situation, which is a direct reflection of the situation in the economy. A number of companies demonstrate weak growth or decline in sales volumes, the reasons are most often associated with anti-crisis measures of potential customers and a decrease in investment.

According to the publication millioner.kz, in terms of revenue, the companies Logician"," Asia-Soft"" and "were in the top three. ERAM Revenue figures for the year first spirit rose 9% and 43%, respectively, while the third fell 45%. In total, seven companies entered the ranking.

According to the study participants, at present, cloud technologies, solutions for processing large amounts of data and mobile applications are developing dynamically, first of all. These trends were noted earlier, and are also characteristic of the global IT industry. Given this vector of development, the IT services sector is one of the most promising, due to stability and resistance to external imbalances. In addition, software development and IT services are the most promising sectors for the development of Kazakhstani companies.

Among the customer sectors, which, according to IT companies and experts, are the main drivers of growth, the state and quasi-public sectors, as well as the key oil and gas complex for the economy, are still most often noted. Financial institutions and telecom are mentioned a little less often. At the same time, the state affects the IT market not only as a customer, but also through economic development programs.

In particular, the Information Kazakhstan-2020 program creates rather large prospects for demand growth, the purpose of which is to create conditions for the transition to the information society.

The most significant factor restraining the growth of the IT market is uncertainty against the background of an external unstable economic situation. In such conditions, business, the state and consumers are forced to adjust budgets and expenses, both current and planned in the future.

2012: Expert RA Kazakhstan

According to a study by the Rating Agency Expert RA: "For the second year in a row, the IT market has maintained high growth indicators, while the dynamics is improving. The volume of sales of IT companies that took part in our study increased by 38% in 2012 and reached KZT48.8 bn. 9 out of 11 ranking participants showed revenue growth, which indicates a positive mood in the industry. Obviously, in the last couple of years, the market has recovered from the crisis and started to recover rapidly. "

2011: J’son & Partners

In October 2011, J'son & Partners predicted that the total IT market of Kazakhstan in 2011 will amount to $750^[11].

2010: IDC

• Kazakhstan's IT market, the largest information technology market among Central Asian countries, increased by 32% in 2010. It will also maintain a significant growth rate over the next few years. This was announced by IDC.

Philippe de Marcillac, IDC Vice President, said: "We have every reason to believe that the strategy and investment of the Kazakh government can put the country on a par with the growing economies of the BRICS and VISTA countries in terms of potential for growth."

In general, the economy of Kazakhstan is also developing rapidly. GDP growth in 2010 was 7%, the government outlined ambitious goals for the growth of this indicator for the coming years. According to the country's innovation program, one of the key components of the "economy of the future" is the ICT sector.

In addition, the Kazakh government is aware of the need to transform the methods of using modern electronic technologies and services. IDC Manager in Kazakhstan Andrey Beklemishchev says that "government support and readiness for change determine the main drivers of the country's IT market growth for the next five years.

Also, IDC materials say that Kazakh IT users are closely following international IT trends and are very interested in new technologies.

• In the first half of 2010, shipments of laptops in units increased by 157.3% compared to the same period in 2009^[12].

In general, in the first two quarters of 2010, the IT market in Kazakhstan, according to IDC estimates, increased by 81.3% in unit terms and almost doubled (an increase of 89.2%) in monetary terms compared to the same period in 2009.

The Kazakh IT market is noticeably "skewed" towards hardware, which accounts for about 80% of sales.

Market Structure by Segment

Equipment deliveries

According to IDC, as of 2010, the equipment market in Kazakhstan occupies a leading position and accounts for 79% of the entire IT industry. As the standard of living in the country grows, the demand for equipment is shifting to more expensive segments, and the positions of the "gray" market are gradually decreasing.

Today in Kazakhstan there are about 30 companies specializing in the sale of hardware. However, the main market is divided between several large hardware suppliers, such asLogicom, White Wind, Alser and Arghims. The share of one "White Wind" of the total sales in the republic is 25-30%.

IT services

As for IT services, this market segment is in second place after hardware. According to IDC, this segment occupies 14 % of the Kazakh IT market. According to the Agency for Statistics of the Republic of Kazakhstan, among all types of services among Kazakh users, advisory services on software development and maintenance are in particular demand. This is followed by services related to the repair, supply of computer equipment and the development of Internet sites. Most of Kazakhstan's IT companies specialize in services, the profit from them is 43.8% of the total income level in the IT market.

2009

According to the results of 2009, a decline was recorded in the IT market of Kazakhstan: the volume of sales of the PC segment decreased by 25.5% in unit terms compared to 2008 and by 35.6% in monetary terms. Moreover, it fell below the results of 2006.

Notes