Software developers in Russia

Software export from Russia

Main article: Software export from Russia

2024: The total turnover of Russian software developers for the year increased by 19.4% and reached 1.98 trillion rubles

At the end of 2023, the total turnover of Russian software developers reached 1.98 trillion rubles. This is 19.4% more compared to 2022. The demand for domestic software is growing against the background of active import substitution and the departure of foreign suppliers from the Russian Federation. This is stated in the materials of the Russoft association, published on June 25, 2024.

In 2023, sales of Russian software abroad decreased in ruble terms by 13% - to 471.5 billion rubles. At the same time, the volume of software sales in the domestic market rose on an annualized basis by 35.3%, reaching 1.51 trillion rubles. Due to such dynamics, export revenues began to have a smaller impact on the indicator of total turnover than in 2022.

Total turnover of Russian software developers

Now we have a unique opportunity - not to try to replace one product with another, but to redesign information systems. The main priority is to identify and eliminate the points of failure on which their performance depends. The main vector of changes is an increase in confidence in the IT infrastructure, - emphasizes Sergey Gruzdev, General Director Aladdin R.D.

According to estimates, sales of custom software development services in the Russian market amounted to approximately 205 billion rubles in 2023. For comparison, a year earlier this figure was estimated at 265 billion rubles. In 2023, its own software solutions accounted for 65.8% (a year earlier - 78%) of income from work in the domestic market of product companies and 35.9% of the revenue of service companies (10.6% in 2022). Total sales in this segment amounted to 865 billion rubles, which is 35% more compared to 2022.

One of the key drivers of the development of the IT industry in Russia is products and technologies for e-commerce (e-commerce). Business strives for digitalization and prefers more flexible solutions that allow unlimited development and scale, regardless of the companies that provide products. At the same time, Sergei Trandin, General Director of BASEALT, believes that to achieve full-fledged technological sovereignty, Russia needs not only IT products, but also completely domestic technologies to create and develop its own IT solutions.

The materials of Russoft say that in 2024 the growth of the domestic software market may be at around 32%. Thus, the total turnover of Russian software developers will increase to 2.61 trillion rubles. In addition, according to analysts, sales growth rates in the domestic market can be expected to continue.

2024 is fundamentally important for the Russian IT market as the year of formation of long-term strategic trends that will determine the development of our industry for years to come. We stand in the way of forming strategic directions of technological development and transformation of the industry, "says Vladimir Lavrov, General Director of Softline Group of Companies.

It is also noted that in 2024 exports will begin to grow due to the promotion of Russian software in friendly markets - in the CIS countries, as well as South and East Asia. Andrey Sviridenko, Chairman of the Board of Spirit and CEO of VideoMost, emphasizes, that small Russian companies ready to supply software to reduce the dependence of friendly countries on world monopolists, found themselves in a situation where revenues from Western exports fell to zero, and business development in the Middle East, South America and Africa requires additional investment in finding partners, establishing ties, localizing products, opening local legal entities, etc. In addition, there are problems with making payments.^[1]

2023: Software sales in Russia amounted to 1.5 trillion rubles

The total turnover of Russian software developers in 2023 reached 2 trillion rubles against 1.6 trillion rubles a year earlier. This assessment was announced to the market at Russoft in early March 2024.

According to the association, software sales on the Russian market in 2023 amounted to 1.5 trillion rubles, an increase from 1.1 trillion rubles in 2022. The volume of software supplies abroad decreased from 544 billion to 413 billion rubles.

The total turnover of Russian software developers in 2023 reached 2 trillion rubles

President of Russoft Valentin Makarov noted that the total income of Russian software companies in 2022-2023. increased by 35% and 30%, respectively, and in 2024 the growth rate may be 25-30%.

As import substitution projects are implemented, income growth will decrease due to the relatively small volume of the Russian market. Within five years, when everything is imported, growth may stop, - said Makarov.

According to him, Russian software developers should focus on the global market and the BRICS countries, in particular, "otherwise we will pupate within ourselves, develop for ourselves, replace yesterday and try to make the best products in the world at 1% of the world market - and this cannot be done."

Alexander Shibaev, General Director of the software developer, including for mobile devices, IW Group, is confident that the markets of friendly countries are open for domestic solutions.

I think that IT companies that develop software as part of import substitution will not be able to effectively enter European and American markets with them and compete with the decisions of global players. As for friendly countries, here Russian manufacturers have good chances, and you need to aim there, "he said.

Software sales on the Russian market in 2023 amounted to 1.5 trillion rubles

General Director of Naumen Igor Kirichenko believes that in 2025-2026. the main projects for import substitution of IT solutions should end. However, not all market participants agree with this forecast. According to Dmitry Odintsov, Development Director of Trukonf (developer of corporate communications tools), by the end of 2023, only 33% of Russian customers use only Russian video conferencing solutions . Another 30% work with both Russian and foreign products, and 31% - only foreign communication software. In the public sector, import substitution in the field of VKS is indeed actually completed - Russian solutions account for 95% of the communication software used, Odintsov said in early March 2024.

By this time, according to Igor Kirichenko, half of the customer companies have little digital transformation strategies and are now busy correcting them. In the future, these strategies have yet to be implemented using the products of Russian software developers.

According to Interfax, market participants agree with the need to master foreign markets, especially since the situation favorable for Russian developers has developed in the markets of friendly countries (primarily the BRICS countries). The point is that Russia has proven its ability to ensure the solution of import substitution problems. And friendly countries, in turn, are now interested in reducing dependence on "unfriendly" IT vendors. By 2024, the alternative to their solutions can be mainly products of Russian companies, the agency notes with reference to the participants in the IT industry.^[2]

2022

Growth of the share of Moscow companies in the Russian IT market from 28% to 36%

At the end of 2022, St. Petersburg IT companies accounted for 21% of software sales in Russia against 24% a year earlier. At the same time, the share of Moscow developers, on the contrary, increased during this time - from 28% to 36%. Such data are given in the study "Russoft," published in December 2023.

As noted in Russofte"," in terms of IT revenue Moscow St. Petersburg and are out of competition, for objective reasons, no other subjects can compete with them. The estimated value of the total product of the Moscow software industry was estimated by experts at 600 billion rubles at the end of 2022, and St. Petersburg at 350 billion rubles.

As for the volume of sales of software products in Russia, the share of Moscow firms (with the exception of software development centers created by companies from other cities) here increased in 2022 by 5.4 pp and amounted to 57.7%. At this time, St. Petersburg companies reduced their share in terms of sales volumes by 4.4 percentage points. - up to 13.5%.

Petersburg really began to lag behind Moscow in revenue in the development industry. Here there was an overlap of two processes - the departure of foreign and international-oriented developers, as well as a sharp increase in revenue from state development tasks solved by large Moscow ecosystem players, such as Sber and Rostelecom, - quotes the publication "Business Petersburg" Deputy General Director for Strategic Facilities "OBIT" Mikhail Telegin.

In addition, among other reasons for the situation in St. Petersburg, experts call the fall in the salaries of highly qualified specialists after the departure of large development companies from the Russian market. This prompted experienced employees to move to Moscow in order to maintain their income level at the same level.

According to Valentin Makarov, President of NP Russoft, St. Petersburg suffered the most from anti-Russian sanctions imposed after the start of the Russian military special operation in Ukraine. The expert noted that St. Petersburg has always been the "capital" of software development of foreign corporations in Russia, almost half of all Russian development centers of world corporations (Intel, Oracle, etc.) were present here. The departure of many of them in 2022 caused more damage to the urban software industry than to other regions, where foreigners were also present - because the software industry of St. Petersburg was mainly focused on exports, mainly to countries that have now become "unfriendly," Makarov said.

In St. Petersburg, the programmer culture is quite well developed, and therefore, if we continue to monitor and develop this, then, accordingly, it is quite possible that we will keep this level, "says Sergey Zhitinsky, CEO of IT company Git in Sky. - And people who want to work as programmers, which is important for them: so that colleagues are at some proper level, in order to do interesting things together. And if St. Petersburg will provide this personnel level, then these companies will be formed here. It doesn't matter who owns them, it doesn't even matter who works in them. And people who live in St. Petersburg will work in these companies, and there are a lot of smart people in St. Petersburg, as historically happened.

The founder of Itglobal.com Group of Companies Dmitry Gachko says that traditionally a fairly large number of software companies were present in St. Petersburg. They worked both directly from the Russian Federation and in the format of development centers. However, most of them either left Russia or try not to glow in the public field, he said.^[3]

How the business of software developers is growing in Russia in comparison with the economy. Schedule

The business of software developers in the Russian Federation is growing significantly faster compared to the Russian economy. This is evidenced by data from the Higher School of Economics based on Rosstat calculations. The figures were released in early July 2023.

The growth in revenues and investments of Russian software manufacturers is largely due to state support for the IT industry. The main document that laid the vector for ensuring the accelerated development of the information technology industry in Russia is the decree of the President of the Russian Federation of March 2, 2022 No. 83 "On measures to ensure the accelerated development of the information technology industry in the Russian Federation." It is in this document that measures have been identified that allow IT companies to actively develop and work fruitfully. To ensure the implementation of this decree in 2022, many changes were made to the legislation of the Russian Federation.

In early July 2023, the Vedomosti newspaper reported that the Ministry of Digital Development was discussing with the Ministry of Finance an indefinite extension of the current 0% income tax rate for IT companies. The tax maneuver for IT companies, whose developments are included in the register of domestic software, was approved by the president in the summer of 2020 and is valid from 2021. Initially, for companies in perpetuity, a preferential rate of 3% on income tax and 7.6% on PHY tax was in effect. In July 2022, the income tax rate was reset to zero, but only until the end of 2024. The condition under which a company can take advantage of benefits is that it should receive 70% of revenue from the development of software and software and hardware systems, online advertising or online subscriptions.

The discussion of the issue of tax benefits was confirmed to the publication by the president of the Russoft association Valentin Makarov: "We talked with the Ministry of Finance and the Federal Tax Service, we presented arguments, and Ministry of Digital Development showed statistics. It turned out that the profit of IT companies went not to dividends, but to R&D, to increase intangible assets and to increase wages, "he said. Makarov believes that the need to extend the benefit was proved. "Now you need to prepare official papers with justification^[4]

Growth in the total turnover of Russian software developers by 6.7% to 1.66 trillion rubles

The total turnover of Russian software developers in 2022 increased by 6.7% compared to 2021, to 1.66 trillion rubles. Such data association "Russoft" led in June 2023.

As the researchers noted, the growth was recorded, despite a sharp decrease in foreign sales, which decreased by 27% in ruble terms (to 544 billion rubles) and by 21% in dollar terms (to $7.95 billion. Sales of software companies in the domestic market increased significantly than their exports collapsed: revenue from work in Russia rose by 37.1% - to 1.117 trillion rubles.

Russoft's materials emphasize that the decline in the growth rate of the total turnover of Russian software developers was not only due to export problems in the markets of "unfriendly countries." To a greater extent, the decline in this indicator was influenced by the termination of work in Russia by a number of foreign companies and software development centers. "If you exclude their indicators, then for all other companies there will be an increase in total turnover by at least 13%, the association said in a statement.

At the same time, Russoft notes that the departure of foreign IT companies and the closure of their software development centers by them has greatly stretched. In some cases - until the end of 2022. As a result, according to the association, the income of these centers decreased by 11% in ruble terms, and in dollars - by only 4%. At the same time, their staff decreased by about half.

According to analysts, a large-scale reorientation from foreign markets to domestic markets is taking place throughout the software industry. If we consider individual companies, then, as a rule, a significant reduction in exports is accompanied by the same large decrease in turnover. Of the 240 software companies surveyed by Russoft, 11 had a reduction in exports by more than 40% in 2022 with a share of foreign sales in revenue of at least 10%. Of those 11, only 4 managed to increase turnover. More often, for some companies, exports decreased by tens of percent or several times, and for others, sales in the domestic market also increased or even more.

The export of computer services, according to the Central Bank of Russia, decreased in 2022 by a comparable amount with a drop in total foreign sales of software companies - by 19.6% to $5.11 billion. These statistics reflect only part of the export revenues of software developers, although significant. The reduction in turnover was reported by 9.6% of the surveyed companies. The smaller share of companies with a drop in turnover in the last 10 years was only in 2017 and 2021, the study noted.

Service companies suffered the most from the change in the situation in 2022. Their total revenue decreased by 6%, and export revenues - by 32% (in ruble terms). Grocery companies, which receive the main income from the sale of replicated solutions, have much better indicators: although their exports sank by 29%, the total turnover did not fall, but increased by 16%. The revenue of development centers for foreign companies did not decrease as significantly as expected when summing up preliminary results based on announcements of the termination of work in Russia.

After the mass exodus of foreign developers and the active implementation of the import substitution program with the support of the state, the demand for domestic software products has grown at least significantly. Moreover, there are all the prerequisites for the fact that such a situation will continue for several more years, - comments on the industry results of the year, CEO of IVA Technologies Stanislav Iodkovsky. - That is why many Russian developers were forced to adjust their plans for international expansion and literally throw all their efforts to satisfy demand in the domestic market.

Skolkovo will support developers of IT solutions that replace foreign software

On November 29, 2022, the Skolkovo Foundation announced the launch of a competition to support particularly significant projects (OZP). These primarily include projects aimed at replacing foreign ON the Russian solutions. More. here

66% of developers and programmers do not have a specialized higher education

According to the resume database of the Russian online recruiting platform hh.ru for 2022, 66% (or 170 thousand) of developers and programmers among men do not have specialized higher education, the presence of specialized higher education is found only in every third. Such data from TAdviser on September 26, 2022 were shared by HeadHunter based on the results of a study, in which data from the resume of 813 thousand developers and 2.7 million of all those employed in IT were analyzed. Read more here.

Interest of Russian developers in Microsoft software continues to decline amid growing demand for Linux

Russia In development under OS Microsoft Windows and over the DBMS MS SQL year, it has significantly decreased, and under and - Linux PostgreSQL continues to increase. TAdviser Representatives of the Association poured in with such data on August 17, 2022 "Russoft" following a survey of software development companies conducted from February to May.

An association study showed that the share of MS Windows in terms of time spent developing solutions and applications for this OS decreased over the year from 42.9% to 28.2%, and the share of MS SQL DBMS from 29.2% to 17.2%. At the same time, a similar indicator of the GNU Linux OS family increased from 32.5% to 48.8%, and PostgreSQL DBMS - from 38.5% to 47.1%. The popularity of other operating systems and database management systems has not changed so dramatically or has not changed at all.

In 2022, in terms of the number of mentions by respondents, the GNU Linux family first came out in 1st place, but so far it shares it with Windows. 79% of the surveyed companies develop solutions for both operating systems. However, if we compare all operating systems based on Linux, including Android, Tizen and Aurora, with the entire Windows family, then Linux will have a clear advantage - 88% versus 79%, analysts said. MS Windows Mobile and MS Windows Phone already in 2021 had virtually zero indicators. Therefore, they were not included in the rating of the most popular OS.

Last year, the MS Windows operating system was still confidently leading in the number of companies that mentioned it, but according to another indicator, the entire Windows family turned out to be on a par with the Linux family (along with mobile systems). The share of these operating systems in terms of time spent developing solutions and applications for them amounted to 43%. Linux already had a meager and not clear advantage.

In the 2022 survey, the Linux family does not even need support for related mobile systems (Android, Tizen, Aurora) to capture the leading position. The share of Windows was only 28.2%, and Linux - 48.8%. The results of a survey of only software companies (IT companies that have developers also took part in the survey, but software development is not their main activity) give a not so big advantage to Linux over Windows - 40.0% versus 35.7%.

Even if you adjust the data taking into account the fact that many companies with a large share of exports in revenue were unable to take part in the survey in the spring of 2022, then Linux will still have superiority - 38% versus 36%. With any calculations, it is obvious that the share of Linux has been growing in recent years, and the share of Windows began to decline from 2021.

After the announcement of the termination of work on the Russian market, Microsoft is easy to assume that by the end of 2022 the share of Windows will decrease even more, and the share of Linux will increase. Most likely, both changes will be more significant than in 2021, the Russoft report says.

"In Nexign, when developing products, we follow the Database-agnostic principle, which allows customers to choose the right database for them. At the same time, under current conditions, the use of open source software entails less risks, since its technical features minimize the possibility of instant blocking. Therefore, we are actively working towards reducing dependence on foreign systems and switching to Open Source solutions, including PostrgreSQL, "said Sergey Sosin, product manager at Nexign.

PostgreSQL has been the leader in DBMS ratings in recent years. At the same time, its gap from MS SQL, which still retains its second place, has increased over the past three years.

"In the context sanction pressure of dependence on Microsoft OS, these are dual risks - rising costs for licenses Microsoft and the threat. safety The best choice for customers is software that is compatible and integrated with the Microsoft ecosystem, but does not depend on it, "said the Nadezhda Alyabyeva to marketing company director/. Spirit VideoMost

Among other changes, Russoft noted that according to the results of polls in 2021-2022, 10 DBMSs at once had such low indicators that they had already ceased to deserve the right to be among the most popular decisions. IBM Informix, IBM DB2, Sybase ASA, Sybase ASE, Linter, SAP DB, InterBase, Paradox, MSDE, MS Access had no more than 5% of references, and development for them took an average of 0.1-0.2% of the working hours of all specialists of the surveyed companies. Therefore, they were excluded from the rating.

At the same time, the ClickHouse system appeared in it. This DBMS was developed by the Russian company Yandex. It allows you to store and quickly process large amounts of information for analytical reporting. ClickHouse quickly wedged into the list of the most popular DBMS among developers, according to the Russoft report.

The intensity of development for Linux and PostgreSQL corresponds to the general trend towards finding alternatives to products and companies that have left the market. However, mature infrastructure solutions require support for both Windows and other operating systems, virtualization systems, DBMS, says Andrey Kryuchkov, director of technology marketing at Cyberprotect.

"Customers continue to use a variety of systems for some time and the complete transition to Linux or PostgreSQL solutions will not be simultaneous," predicts Andrey Kryuchkov. "In our company, we pay special attention to compatibility issues with various Russian system software, but we also continue to support other systems in demand by customers."

The respondents first mentioned another domestic DBMS - Tarantool, which Mail.ru Group began to develop in 2008. Since 2019, the system has been used in some large Russian companies, but mass development for it has not yet been carried out. Only one of all the companies surveyed mentioned this DBMS, which is not enough to get into the rating.

According to analysts, the growing popularity of Linux and PostgreSQL among developers with a decrease in their interest in MS Windows and MS SQL is one of the signs that work is underway in Russia to ensure technological sovereignty. At one time, Microsoft consolidated its monopoly position in the global market by the fact that almost all developers created solutions for its OS, while when installing Linux, it often became clear that the application the user needed did not yet exist. Microsoft is rapidly losing this advantage.

"Since February, the number of requests for help in the transition from Microsoft products to open source software solutions code has been steadily increasing and the need to migrate databases to PostgreSQL is increasing. As a rule, relatively large Russian companies turn out to be in a rather difficult situation of vendor lock-in (dependence on the supplier). An active analysis of the possibilities of such migration, risk assessment and cost calculation, "said the Sergey Karpushin head of the business solutions development department, LLC. "Auriga"

According to him, the cheapest migration will cost those who used the database only as a data store. And where stored procedures were widely used in the database, the architecture of application systems is being revised. Refactoring is used if the code quality and project specifics allow. But in some cases, the system is easier to develop again, building it according to modern principles, the expert concluded.

The only problem remains that the transition from one OS to another, even to the best in all technical parameters, is always a difficult process. However, the motives for software developers to remain committed to MS Windows and its MS Office suite of office applications are becoming less and less every year. From 2022, the need to switch to Linux already looks mandatory. As pointed out in Russoft, this fact was realized not only in Russia, but also in many other countries. So, even in the USA, the transition to Linux is quite massive, but mainly for economic reasons, since the use of PCs with Linux can be much longer than with Windows, which periodically requires replacing hardware to work with a "super-new" version of the OS.

The survey conducted in February-May 2022 was attended by 189 companies that are engaged in software development (of which for 171 companies this development is the main area of ​ ​ activity). Respondents assessed the intensity of development for different OS and DBMS during the previous year. The rating was compiled both by the number of companies with development for different operating systems and database management systems, and by the intensity of this development (the intensity of development began to be calculated only in 2020 after making the necessary changes to the questionnaire).

The Ministry of Digital Development is working to make grants and loans more accessible to IT companies

Minister of Digital Development, Communications and Mass Media Maksut Shadayev proposed to simplify the form of applications for grants for IT companies. In his opinion, the existing formal procedures restrain the development of the market. He spoke about this at an expanded meeting of the State Duma Committee on Information Policy, Information Technology and Communications on March 22, 2022.

According to the minister, it is necessary not only to significantly increase the amount of grant support aimed at stimulating the development of the domestic IT market, but also to simplify the application process.

Unfortunately, the process of obtaining grants is associated with the preparation of a pile of documents. And for many small companies, this is a serious barrier. We suggest changing the procedure. We propose to consider presentations and make them public pitching. Especially in cases where we are talking about user products and platforms. And only then the winner will hand over a formal package of documents, - said Shadayev

The Minister noted that targeted grants for the creation of software are an effective tool to support the industry, which has been successfully used over the past two years. However, in the changed situation, it is necessary to increase the amount of funding several times, highlighting key areas where there are no competitive domestic products.

In addition, Maksut Shadayev noted that the salary of IT specialists working in companies that have received grants is now legally limited. These restrictions do not correspond to market realities, but are determined by Rosstat methods. According to him, Ministry of Digital Development is working to get rid of these restrictions and bring the terms of grants in line with the market.

At the same time, Ministry of Digital Development will return to the model of subsidizing projects, which was worked out in a pandemic in 2020, when 80% of the costs were borne by the state and only 20% by the developer, now subsidies are carried out in a proportion of 50% to 50%.

Those IT companies that do not fall into the number of grantees will be able to count on soft loans. Targeted loans at 3% will be issued to companies engaged in software development from the list created by the Ministry of Digital Development, which will include those software classes that are not in Russia. Also, IT companies will be able to take advantage of preferential loans with a rate of 11% on operating activities. In addition, the ministry plans to return the practice of non-refundable loans, which will be issued to preserve jobs and to pay off personal income tax of employees.

IT companies have no collateral. And this moment needs to be worked out. For example, is it possible to take into account intangible assets, for example, software, in the pledge. It is important to work out the issue of forming a guarantee fund that could remove risks from banks. Now this issue is being worked out with colleagues from the Central Bank. It is pointless to launch preferential lending if 90% of companies do not pass according to the formal criteria of banks to receive loans, - said Maksut Shadayev

According to the minister, the issue of intangible collateral will be resolved in April 2022.

2021

Revenues of Russian software developers soared by 19%

The total income of Russian software developers in 2021 amounted to more than 1.5 trillion rubles (about $21.2 billion), which is 19% more than in 2020. Such data association "Russoft" (unites about 280 IT companies with a staff of more than 85 thousand employees) published in July 2022.

According to the statistics presented, the total revenue of Russian software companies in the Russian Federation in 2021 amounted to 815 billion rubles ($11.1 billion), abroad - 75 billion rubles ($10.1 billion). The association expected that the total turnover of developers would grow by a value close to 20%, and sales within Russia would be slightly more than export income (by 1-2 percentage points). However, there was not even a symbolic difference between the increase in foreign sales and the increase in sales in the domestic market.

Since the average annual dollar exchange rate for the year changed slightly (an increase from 72.15 to 73.7 rubles), the change in indicators in dollar terms and in rubles, although it differs, but only by 2 percentage points. Total turnover, sales within Russia and exports increased in dollars by 17%.

According to the study, the growth rate of sales in the domestic market caught up with those abroad is no coincidence. They almost coincided at the end of 2020. Their convergence in 2018-2019 was noticeable in comparison with the data of the previous three-year period. Such a rapprochement suggests that a significant part of Russian software companies have learned to reorient from foreign markets to domestic markets or from domestic to external ones, reacting to a change in demand. ON The situation in the domestic market, favorable for domestic developers, also affected. If in some years there was no significant expansion of it, then in 2021 foreign companies began to vacate a place on it (to a large extent due to the sanctions policy USA and due to the import substitution policy caused by a decrease in confidence in American and European software developers).

According to Russoft, some companies reoriented completely to the Russian market, but instead there were about the same number of new exporters who previously worked only in Russia.

In 3.5% of the companies surveyed by the association, export revenues in 2020 decreased to zero in 2021. At the same time, the same number of companies announced foreign sales in 2021 in the absence of export revenues in 2020.

One of the factors ensuring the balanced and quite significant growth of the Russian software industry was the absence of shocks in the world or separately in the Russian economy. Obviously, this factor will not have a positive impact in 2022, which means that the software development industry will face serious tests, Russoft experts say.

Today [by July 2022 - approx. TAdviser] there are many problems, but solutions will be found. In almost all sections of IT, we have domestic software products that close the gaps formed due to the departure of Western corporations - says Alexander Egorov, CEO of Reksoft, member of the Russoft boards. - Gradually, the participants of the IT market come to the realization of the grandiosity of the opportunities: Western competitors, who dominated the market for many years, voluntarily left it. Of course, not all demonstrative "departures" are actually such, in many cases activities continue under other brands, but Russian customers have already appreciated the "loyalty" of foreign suppliers and are unlikely to step on the same rake: one way or another, on the horizon 10-12 years, many foreign solutions will be replaced by Russian. We have a window of opportunity not only within the country, but also in foreign markets, just the vector of international expansion will be changed, for example, to the countries of Southeast Asia.[5]

About 100 software companies appear in Russia annually

According to the non-profit partnership Russoft"" (released on July 19, 2021), over the past five years Russia , more than 100 developers have appeared annually. software In total, there are about 4.2 thousand companies in the country.

According to the study, the birth of new software companies was the most active in 2006-2010. During this period, an average of 209 enterprises were created annually. The boom in software development startups continued until 2011, during which approximately 220 companies appeared. Then this figure began to decline: in 2012-2016. it averaged 155 companies.

It is almost impossible to determine quite precisely how many software companies have appeared in the past few years, the association notes. The fact is that Russoft considers such a company a business that has been under the same management for several years and already has stable sales. Consequently, the number of legal entities that in their constituent documents indicate the development of software as the main activity (OKVED codes 62.0 and 62.01) does not indicate anything. A significant part of such companies appears as a result of the crushing of an existing business, or disappears within a couple of years, the study notes.

In addition, many companies created achieve sustainable sales no earlier than in 2-3 years. Another problem is that in the base of companies, according to which Russoft conducts a survey and learns the year of their creation, new enterprises fall with a fairly long delay - at least three years (sufficient coverage of young companies is achieved in five years).

The growth in the number of new software companies was due to the emergence of a number of development institutions (in 2006, the Russian Venture Company (RVC) was created, and in 2010 the Skolkovo innovation center appeared along with the fund of the same name).

2020

Russian software developers attracted 10 billion rubles of investments

In 2020, Russian software developers attracted about 10 billion rubles of external investments, and the total investment in the market amounted to 46.5 billion rubles, according to Russoft data released at the end of September 2021.

According to the association's calculations, the Russian software industry needs an injection of 125 billion rubles, which means that in 2020 it received only 37% of this amount. External investment accounted for 22% of the investment.

In his study, Russoft pointed to a "paradoxical situation." It consists in the fact that companies cannot find a source of financing within the country, and therefore change jurisdiction. At the same time, they successfully develop abroad, finding investors there. At the same time, Russian investment funds do not find within the country those projects in which you can invest, and therefore transfer their activities abroad. They need not just individual projects, but their flow, which they do not see in Russia. Even with the transfer of the activity of some venture capital funds abroad, there is no problem of a lack of free financial resources in Russia.

According to sources of external investment, the picture is as follows. Most often, investors in 2020 were private funds, investor clubs, individuals - nine mentions. These are domestic funds or funds whose belonging to a country was not indicated. At the same time, a number of investors were unambiguously defined as foreign: in 2020 there is only one mention of such an investor.

At the same time, there are quite a lot of reports about attracting investments from companies with Russian roots. Russoft did not classify them as Russian or foreign companies, according to its own criteria. They can be both, but, as a rule, development in any case is carried out in Russia. Such companies were mentioned about attracting investments abroad 5 times in 2020.

State structures (funds or development institutions that distribute grants) were mentioned as investors in 2020 three times, Russian corporations - twice.

Dmitry Zhelvitsky, chief analyst at Russoft, believes that the problem is not the availability of free money, but the competencies - the ability to invest in high-tech companies, which requires knowledge of technologies and how they will develop, how the market will perceive completely new solutions. Such knowledge is not quickly acquired. We can hope for slow growth, but gradually accelerating, he said.

According to the expert, the situation is unlikely to worsen. Rather slowly, but for the best. Increased uncertainty with new shocks could hinder. But the COVID-19 coronavirus pandemic has shown that it has generally negatively affected the industry, but only in the form of a slowdown.

Dmitry Komissarov, General Director of MyOffice, believes that the difficulties in attracting investments in IT projects are caused by the lack of venture infrastructure in Russia. Russian investors, as a rule, are not ready to give money for a long time, but to create a complex IT project in a short time is almost unrealistic. And companies that take money not from funds, but directly from investors, may face incorrect estimates of the timing of the return on payback and requirements for a quick refund at a time when the company has not even presented MVP (an early version of the product).

The analyst Finam"" Leonid Delitsyn emphasizes that it is important for investors such as venture capital funds, business angels, private equity funds to see demand for industry products and services and growth prospects. The exchange rate for import substitution creates the potential for demand growth.

The staff of Russian software developers has grown by a record 12%, to 200 thousand people

The total number of personnel of Russian software developers in 2020 reached 200 thousand people, an increase of 12% compared to 2019. This dynamics turned out to be a record for the industry, according to Russoft. The data were released in July 2021. Read more here.

Revenue growth of software developers by 16.5% to ₽1,305 trillion

On June 15, 2021, Russoft shared with TAdviser the results of a study according to which the total revenue of Russian software companies at the end of 2020 amounted to ₽1,305 trillion, which is 16.5% more than a year earlier. Sales within Russia grew in the same way as export revenues - by about the same 16.5%. If we compare with the growth of total revenue in previous years, then you can see a slight slowdown. For example, in 2019 it amounted to 17.8%, and in 2018 - 19.5%.

However, if we take into account the depreciation of the ruble against the dollar (by about 12% at the end of 2020), then the braking will look more significant. Total revenue in dollars increased only by 4.5% to $18.1 billion, and export revenues with almost the same growth (+ 4.3%) reached $8.6 billion. For comparison, in 2019, the growth in turnover in dollars amounted to 14.9%, and export growth - 17.5%. These indicators for the entire period of the annual Russoft study only in crisis years (in 2009, 2014 and 2015) were below 10%. In the absence of shocks to the entire economy, Russian software companies have always had at least 10 percent average growth in dollar terms.

^{Average increase in turnover and foreign sales of Russian software companies in 2014-2020}

At the end of 2020, the ¾ of the surveyed companies increased their turnover if measured in rubles. About the same number was a year earlier. However, when measuring revenue in dollars, the share of companies growing in 2020 amounted to 59%, and revenues decreased - from 41%. In 2019, the average annual dollar exchange rate remained almost unchanged. Therefore, the share of growing companies turned out to be the same both when measuring revenue in rubles and in dollars.

^{Distribution of surveyed companies by the nature of turnover change in 2019 and 2020}

The own assessments of software developers surveyed as part of the annual Russoft study give the following picture: only 13.3% of software companies did not feel the impact of the pandemic on business, 66.1% - the pandemic affected negatively and 20.6% - positively. The average score for this criterion was -0.95, and the score of "-1" corresponds to a negative but insignificant impact.

^{Distribution of surveyed software companies depending on their assessment of the impact of the pandemic on business}

Additional revenue thanks to the pandemic was received by developers of computer games and solutions in the field of information security, as well as providers of solutions for remote work, entertainment and training over the Internet. The largest losses were had by companies that specialize in the development of "Replicated systems for enterprise (institution) management, document flow automation, design and production process."

Some companies, thanks to the pandemic, increased revenue significantly, while others had a reduction of tens of percent. However, such large changes were still noted in isolated cases. Most often, the positive or negative impact was not as significant.

{{quote 'author = said Yuri Ovcharenko, Deputy General Director of EPAM.|It so happened that in Russia we have no clients from the travel and hotel business, air transportation and other industries that were most affected during quarantine. But customers from key sectors for us - financial, trading, production - on the contrary, switching to remote, just increased investments in the areas for which we develop solutions and provide IT services. Such companies have become even more intensive than before to develop digital channels to improve the efficiency of interaction with their customers, partners and employees. Migrate back-end platforms to microservice architecture for flexibility. Implement analytical solutions, ML and AI tools, RPA to reduce costs and acquire the ability to quickly respond to changes in the external environment.

We can safely say that for our customers the pandemic turned out to be a motivating factor for finding business models and increasing the efficiency of existing business processes and, in fact, contributed to the acceleration of digital transformation. As a result, in 2020 EPAM revenue in Russia and the CIS in dollar terms increased by more than 14% compared to 2019,}}

For companies that have benefited from the pandemic, the average share of exports in total revenue was relatively low 26%. For victims, this figure is much higher - 40%. Consequently, the pandemic has affected companies that are actively working abroad more negatively. With the exception of companies with offices abroad, they could not send their employees abroad to negotiate current or new projects or participate in foreign marketing activities.

At the same time, companies that have reduced their turnover by the end of 2020 have a share of exports of only 9.4%, and for growing companies this figure is much higher - 45.4%. Therefore, even during a pandemic, focusing on the global market produces much better results than working mainly in the domestic market.

{{quote 'author = noted Vadim Sabashny, CEO of LANIT-Terkom.|Changes in the IT market have been brewing for a long time, and the pandemic only prompted them to come faster. The main changes are universal digitalization and digital transformation, which had a positive effect on the volume of the IT market. In the spring and summer of 2020, there was high uncertainty in all markets, and this significantly reduced investment in IT and caused a short-term reduction in volume, but since the fall of 2020 there has been explosive growth.

Forced remote work showed that such a format can be no less effective than the traditional one, which united not only the sales market, but also the labor market, made it international. Naturally, all this was present before, but it was after the pandemic that it became a global practice, and not an exception,}}

Despite not very high growth rates, 2020 can be considered more than successful for software developers. In March-June, few of them hoped to avoid a reduction in income and staff at the end of 2020, as significant delays in payments began, the prospects for concluding contracts became vague, and analysts at IDC and Gartner promised a tens of percent reduction in both the Russian IT market and the world.

By September 2020, it became clear that the software industry was rapidly recovering and was ready to show growth. This is especially true for export revenues. Against the background of a decrease in the export of services to all enterprises and organizations in Russia by the end of 2020 by 24.3%, and commodity exports - by 20.8%, the software development industry showed a small, but still export growth. The growth of sales in Russia and the growth of software exports means that the industry has withstood the blow and overcame the pandemic, preserving the necessary potential to ensure the digital transformation of the country's economy, concluded in Russoft.

Regarding 2021, the surveyed companies turned out to be quite optimistic. They expect to increase revenue in ruble terms by an average of 20% (when conducting a survey in 2020, this figure was 12%).

Ministry of Digital Development opposed the expansion of the powers of the FAS in the IT industry

At the end of November 2020, the Ministry of Digital Development, Communications and Mass Media of the Russian Federation did not approve the amendments to the law "On Protection of Competition" proposed by the Federal Antimonopoly Service (FAS) in the current version. Among other things, they are talking about the prohibition of monopolistic activities when "concluding transactions through computer programs."

This norm is just the most embarrassing for market participants and the Ministry of Digital Development, since, in their opinion, any transaction related to e-commerce can be attributed here.

In addition, the bill proposes the introduction of sanctions for late implementation of service instructions. According to market participants, this "provides wide room for maneuver on the part of the FAS and does not leave companies with the opportunity for symmetrical protection," however, FAS Deputy Head Sergei Puzyrevsky claims that there are already sanctions for late execution of FAS orders, it is proposed to increase them for repeated failure to comply with the orders, and this can be challenged in court.

He explained to the newspaper that the digital era brought a global threat to the economy - monopolization using "digital cartels," in a number of sectors new digital companies have taken dominant positions that significantly affect the real sector of the economy.

According to Anatoly Semenov, deputy chairman of the committee of the Russian Union of Industrialists and Entrepreneurs on Intellectual Property, the bill, in fact, is needed to expand the scope of activity of basic antimonopoly norms to digital markets. The idea of ​ ​ the bill itself is logical, but as a result of a two-year study, a lot of legal uncertainty appeared in it, so the measures proposed by it can work "either poorly or selectively," Semenov emphasizes.^[6]

RFRIT selected 5 software developers for grants worth 217 million rubles

In September 2020, the Russian Fund for the Development of Information Technologies (RFRIT) summed up the results of the competitive selection for a grant for the implementation of projects for the development or refinement of domestic software. Read more here.

Most Russian IT companies faced a delay in payments from customers

Most of the IT companies surveyed by NPP Russoft - 82.4% - said they were dealing with a delay in payments for orders already completed, TAdviser told Russoft on May 14, 2020. This fact, according to the organization, will be the main reason for the imminent reduction in IT industry revenue in the second quarter of 2020.

Russoft re-conducted an express survey of IT companies in order to assess the impact of the coronavirus pandemic on the IT industry. The organization has already conducted a similar questionnaire on April 6, 2020, but the new survey contained only two of its questions - about the dynamics of revenue and the forecast of the dismissal of employees.

The second express survey of IT companies "Russoft" conducted from May 8 to 12, 2020. In total, 34 companies were surveyed. Food among them 13 (38%), service 20 (59%). Such a sample, as noted in Russoft, corresponds to the general population of all IT companies in Russia. The total number of employees of the surveyed companies was 6614 people. The survey was mainly attended by Russoft member companies and members of regional associations that are associated members of Russoft.

Delays in payments for orders already completed during the Russoft survey were discussed more often than other problems. During the previous survey, the organization did not ask respondents a corresponding question.

The companies' comments show their concern about the future, since both government agencies and commercial companies have frozen or sharply reduced their IT budgets, Russoft notes.

The total revenue of the surveyed companies in the first quarter of 2020, according to the survey, increased by 2.4%.

For the fast-growing software industry, the 2.4% revenue increase is very low. In recent years, Russian software developers have been increasing turnover by an average of at least 10-15% per year. Apparently, the problems of software companies began in February-March and could be caused by the beginning of the fall in oil prices. In March, payments delays related to the coronavirus may have begun. In early spring, it became clear that the epidemic was unlikely to cover only a few countries and could develop into a pandemic, "Russoft noted.

If we talk about forecasts of revenue dynamics, then under the optimistic scenario of the development of events caused by the coronavirus, IT companies assume a reduction in revenue by an average of 12%, with a pessimistic one - by 39%. The results of a previous survey conducted in early April gave indicators very close to these values ​ ​ - 11% and 46%, respectively.

At the same time, more than 20% of the respondent companies of the latest survey, under the optimistic scenario, still expect an increase in revenue.

It can be assumed that this growth is partially caused by the pandemic - the emergence of new market segments associated with the transition to a remote mode of operation, education, entertainment, and so on. Although, most likely, there were other factors that made it possible to get more revenue than planned at the beginning of the year, Russoft notes.

In general, Russoft did not reveal significant differences in the forecasts for the second quarter of 2020, determined by the results of two surveys. The organization notes only a slightly reduced share of companies waiting for revenue, which will be more than half, less than the amount planned at the beginning of the year.

In addition, in the month that passed between the two polls, the readiness of companies to maximize the existing staff increased significantly. If in April the surveyed companies assumed to reduce the number of personnel by 11.6% under the optimistic scenario and 31.8% under the pessimistic scenario, then in May - 3.9% and 15.2%, respectively.

At the same time, more than half of respondents see the risks of losing key employees.

The loss of the main members of the team can affect their development accordingly. Therefore, the positive impact of software development on the entire economy can decrease significantly. In addition, some important projects that make it possible to increase the efficiency of commercial enterprises and government agencies will not be possible to complete, - noted in Russoft.

41.2% of surveyed companies fear the loss of foreign markets.

IT companies in Russia assessed the scale of the impact of coronavirus on the software market

IT companies in Russia assessed the scale of the impact of the COVID-19 coronavirus pandemic on the software market and proposed support measures. This was reported on April 13, 2020 by Russoft following an express survey of 42 members of this non-profit partnership - companies of different sizes and with different business models.

Express survey "Russoft" conducted in April 2020 at the suggestion of the Ministry of Telecom and Mass Communications. The organization submitted its results to the ministry for use in developing proposals for measures to state support the industry.

38% of survey respondents are software developers, 62% are enterprises with the predominance of income from various services, primarily from custom software development. Nine companies participated in the survey anonymously. The smallest of the respondents was a company with a staff of 17 people, the largest - with a staff of 1.1 thousand people. The total number of employees of the respondent companies is more than 5 thousand people. Since the survey questionnaire did not contain a question about the number of employees, Russoft calculated the average indicators of revenue reduction and headcount according to 33 companies.

The active participation of companies in the survey was largely stimulated by the ministry itself, which established a constant dialogue with the main industry associations, conducting regular consultations and forming proposals for other departments and for the government in accordance with the positions agreed with the industry during this dialogue, - emphasize in Russoft.

According to the survey, the total revenue of Russian software manufacturers under the optimistic scenario for the second quarter of 2020 will decrease by at least 11%. Under the pessimistic scenario, it will decrease even more - by 46%. The pessimistic scenario in the survey was understood as a deterioration in the economic situation in the second quarter of 2020, and an optimistic one - an improvement.

Two of the surveyed companies, that is, 5% of the total, completely exclude the possibility of an optimistic scenario, considering it possible only the reduction that can occur with a pessimistic one. Nine companies (21.3%), adhering to the optimistic scenario, expect revenue growth with it, six (14.3%) - believe that their revenue will not change. However, twenty-seven companies (64.3%) are counting on a drop in revenue, and seven (17%) are confident that it will fall by more than 20%.

According to the pessimistic scenario, revenue will not increase for any company. In twenty-one companies (50%), under such a scenario, revenue is expected to fall by two or more times. Almost complete loss of revenue - a drop of 95-100% - is expected by only 7.1% of companies that took part in the survey. However, even fewer companies adhere to the best forecast under the pessimistic scenario - its preservation at the same level - - 2.4%.

As noted in Russoft, only one respondent company expects to implement the revenue plans available at the beginning of the year. However, they are not counted on to overfulfill them. At the same time, two companies assume a reduction in revenues to zero, and one company - reductions of 95%, that is, almost to zero.

On average, the fall in revenue for companies under a pessimistic scenario may amount to 46%, - say Russoft.

At the same time, only 12% of surveyed companies plan to significantly reduce personnel by the end of the second quarter of 2020 under an optimistic scenario. Half of the companies that took part in the survey are not going to fire employees at all.

In a pessimistic scenario, more than 2020 employees are planning to lay off by the end of the second quarter of 50% year 14.3% the surveyed companies. Half of the companies intend to lay off 5% to 20% employees by the end of the second quarter of 2020.

  Only 16.5% of the surveyed companies have confidence in the payment of salaries to all employees in full in the second quarter of 2020.

In addition to assessing the impact of the coronavirus pandemic on the IT industry, within the framework of the survey, enterprises also outlined the measures of state support necessary, in their opinion, to the sphere. The corresponding proposals were provided by all 42 companies surveyed, most of them declared the need for several state support measures at once.

Tax holidays, and above all, for those taxes that directly depend on the size of the wage fund (payroll) - personal income tax and VAT, were proposed by 22 surveyed companies (52% of the total). 43% of them declared the need to subsidize the industry by the state and preferential loans for the payment of wages. In addition to the necessary measures, such as:

• support through government orders (33% of companies paid attention to it);
• tax cuts and changes in tax regimes (31%);
• various types of subsidies and concessional lending without specifying the purpose (26%);
• rent compensation (17%);
• holidays for payments to pension and insurance funds (15%).

Also, as part of the survey, more than 10 other proposals for government support measures were proposed, but each was mentioned by no more than three companies.

IT companies ask the Ministry of Telecom and Mass Communications to postpone the bill on antimonopoly norms due to coronavirus

At the end of March 2020, the Association of Computer and () Enterprises information technology APKIT , the Association of Software Product Developers () " ARPP Domestic Software" and the Non-Profit Partnership "" Russoft wrote Maksutu Shadayev to the Minister of Communications with a request to suspend the discussion of FAS the amendments to the Law "On Protection of Competition" proposed by the Federal Antimonopoly Service () for at least a year.

According to the Kommersant newspaper, the FAS wants to extend to IT developers new norms of antimonopoly regulation, including, for example, bans on anti-competitive agreements and abuse of dominant position in the market for goods produced using the results of intellectual activity

Participants in the IT market believe that the adoption of the document "will entail significant business costs and loss of revenue through the launch of a forced licensing mechanism," which seems especially untimely to the industry "taking into account sharp changes in the economy due to the global pandemic."

IT developers appealed to the Ministry of Telecom and Mass Communications after the FAS sent the revised version of the bill to the associations , asking them to submit comments and proposals no later than April 1, 2020. According to the director of APKIT Nikolai Komlev, the FAS did not discuss this edition with the industry, posting it immediately on the federal draft of regulatory legal acts.

In relation to this project, more than 30 negative reviews were received from industry participants and not a single positive one, but none of them were taken into account in the new version, Komlev said.

The Ministry of Telecom and Mass Communications agreed with representatives of associations and the position set out in their letter, Dmitry Nikitin, director of the IT industry development department of the ministry, told the publication.

At the same time, the FAS said that the bill does not contain proposals for the launch of a forced licensing mechanism, and the essence of the proposed changes is to prevent abuse of rights that could lead to restriction of competition.

Alexei Ivanov, director of the Institute for Law and Development of the Higher School of Economics and the BRICS Antimonopoly Center, believes that against the backdrop of the COVID-19 coronavirus pandemic, digital platforms will dramatically increase market power and it would be worth considering strengthening antimonopoly control over them as an anti-crisis measure.^[7]

300 IT companies in Russia warn: FAS project may ruin IT industry

In early March 2020, it became known that the Association of Computer information technology APKIT and () Enterprises, the Association of Software Product Developers () " ARPP Domestic Software" and the non-profit partnership "" (Russoft these organizations unite more than 300 leading domestic IT companies) sent Ministry of Digital Development, Communications and Mass Media a letter asking not to support the bill Federal Antimonopoly Service (FAS) on regulating the results of intellectual activity.

The agency wants general antitrust rules to be extended to software manufacturers: a ban on "abusing" the dominant position in the market, participating in anti-competitive agreements and setting an arbitrary price for its product.

While developers can freely choose partners, based on their competence, and build multi-level channels with them. Such immunity, which the FAS wants to abolish, creates the risks of monopolization of markets, advantages for foreign copyright holders and discriminates against Russian copyright holders, the regulator believes.

If the FAS initiative is adopted, such actions of market participants will automatically be considered illegal, regardless of the presence or absence of harm, the authors of the letter believe. According to them, this will be "a blow to domestic developers."

Instead of creating conditions for high-quality growth, the FAS is trying to limit developers and actually introduces a ban on their activities. Obviously, these measures will ruin the entire industry, - said Dmitry Komissarov, General Director of MyOffice (New Cloud Technologies LLC).

In his opinion, the FAS unreasonably wants to separate software developers from the general business and apply significantly tougher measures to them than to other players in the Russian market.^[8]

2019

Russian software manufacturers for the year reduced investment in development by 60%

Russian software manufacturers in 2019 reduced investments in product development by 60% - to about 65 billion rubles. Companies invested mainly in their own funds, according to a study conducted by the Russoft association (unites more than 170 IT market participants).

As experts explained, the volume of all investment investments of Russian software companies at the end of 2019 amounted to at least 50 billion rubles ($773 million), but taking into account the fact that not all developers are ready to disclose data on attracted investments, the figure may be higher than 65 billion rubles.

At the same time, external sources of financing accounted for 18% of the investment volume. At the same time, software developers believe that the need for effective investments is 60% more.

  Only 33 companies managed to answer the plans for 2020-2021 regarding investments in development. They expected that the volume of investments from different sources in 2020 will decrease slightly , and in 2021 will grow sharply. At the same time, the share of external financing will reach 74% in 2021, which will cover the investment needs by 84%, according to Russoft.

About 75% of the companies surveyed did not indicate the desired amount of investment that they could effectively master during the year. 42% of survey participants reported that  they did not have funding needs , and 33% of respondents avoided answering the relevant question.

Only 21% of the companies surveyed reported attracting investments in 2019. Another 17% did not answer the relevant question. Among them may be those who had investments in development, but for some reason did not disclose information about this. Nevertheless, a very large share (more than 62%) of those companies that did not have any sources of financing for their development. In 2020, there will be no fewer such companies if you focus on the survey results, but in 2021 the share of companies with investments is expected to grow to 30%, the report says.

In 2019, a situation returned in which the number of companies that received investments turned out to be half the number of those developers who counted on them.

NP specialists also established a share of companies that would like to have external financing, but for one reason or another could not receive it. For example, in the period from 2011 to 2018. there were at least twice as many such companies as there were recipients of investments. So, if 14% of the surveyed companies expected to receive external financing by the end of 2017, then in reality there were only 6% of them. In 2018, the situation changed due to the fact that software developers began to more realistically assess their prospects for receiving money from third-party investors.

According to Russoft experts, most companies do not have a development strategy for which investment is needed.

It is impossible to determine the reasons for the absence of such a strategy according to the survey results, but it is possible that we have a vicious circle here - some companies are not engaged in the development of an investment strategy without seeing real sources of financing, the report says.

It also indicates that there is a request in the industry for a radical change in the structure of investments. It is difficult to judge how justified their expectations are in the current situation of high uncertainty (forecasts do not make sense). Most likely, even in the most optimistic scenario, such a powerful increase in external funding is unlikely. Nevertheless, an increase in its share is quite possible with the attention that the government began to pay to the development of software development in Russia, Russoft reported^[9]

Growth of the Russian software market by 17.8%

Russian software developers in 2019 earned a total of 1.199 trillion rubles, which is 17.8% more than a year earlier. This is evidenced by the data of the Russoft association.

Revenues of companies from software sales outside the Russian Federation increased more - by 20.5% in rubles (up to 533 million) and by 17.5% in dollars (up to $8.25 billion). Excluding sales of a number of Russian software companies (Luxoft, Parallels, Transas, Veeam, MERA), the market exceeded $11 billion.

As noted in the study, the growth of foreign sales exceeded the predicted amount, but sales in the domestic market increased much less than expected. Nevertheless, the 16 percent growth of the software industry in Russia is quite decent, they say in Russoft.

Foreign sales include the revenue of Russian companies outside the country (both from the position of their Russian offices and from the position of sales offices in other countries). Comparing the volumes of foreign sales and foreign currency receipts from these sales to the country, it turns out that more than $1 billion in revenue remains abroad in the offices of Russian software developers abroad. These funds go to marketing, to the maintenance of sales offices and foreign development centers (primarily in Belarus and Ukraine), and are also partially stored in the bank accounts of business owners, experts say.

The report also provides indicators of the export of computer services according to statistics from the Central Bank of the Russian Federation ($4.488 billion) and the volume of exports of software companies, that is, the amount of foreign currency receipts to Russia from foreign sales (about $7 billion).

The association says that there are a large number of companies that carefully hide their Russian origin. They are usually very difficult to get even information about the number of personnel, and the fact that they have the main development in Russia, they try, as a rule, not to advertise. According to rough estimates, if there is more reliable information about their turnover, it would be possible to add at least $2 billion to the income received by Russian developers on the international market (in total, it would be at least $13 billion in 2019).^[10]

Domestic software developers can receive state subsidies in the amount of about 15 billion rubles

On July 10, 2019, information appeared that domestic software developers could receive government subsidies in the amount of about 15 billion rubles. The corresponding project is being prepared by the working group in the direction of "Information Security" at the ANO "Digital Economy." The authors of the idea did not specify the exact amount. Read more here.

About 35% of Russian software companies are actively working abroad

On July 9, 2019, it became known that according to a study conducted by NP Russoft specialists on the development of Russian software companies in 1990-2019, more than 50% of Russian software companies either do not work abroad at all, or have insignificant and irregular export revenues for them. At the same time, the company often implements individual projects only in the near abroad. About 35% of Russian software companies are actively working abroad.

As noted in the press service of Russoft, the association annually presents the distribution of software companies by group, depending on the location of the head office, the year of creation, specialization, business model, export share. "However, the survey found a very large margin of error in just one year to represent only a wide range of company distributions in each group. Since a number of characteristics of companies remain unchanged or change slightly over several years, it was quite justified to combine survey data from recent years - from 2016 to 2019, "Russoft said, adding that combining the survey results made it possible to quite accurately see the main characteristics of Russian software companies (software). "In particular, it made it possible to obtain quantitative indicators related to the problem of low entrepreneurial activity. These indicators have improved in certain periods, but still in the last 30 years they remain at about the same, low, level, and this fact, together with the personnel deficit, restrains the development of the industry, "Russoft said.

The association also noticed that after combining the data of its research for several years, information was received from 458 software companies. At the same time, a relevant sample was obtained, which well reflects the history of the Russian software industry in terms of changing the activity to create successful companies.

As noted in the study, out of 458 companies surveyed by Russoft over the past four years, 22.5% indicated that they did not have foreign sales. "However, in some years this figure may be much higher. For example, the latest survey showed that in 2018, 35% of the surveyed companies did not have export income, which is associated with a clear reorientation of companies to the domestic market, "the study notes,

40.5% of companies, as evidenced by research data, in 2018 had a turnover of $1 million to $5 million. In general, from 2015 to 2018, as indicated in the study, the distribution of the number of surveyed companies in terms of turnover did not change dramatically. "It can be assumed that companies began to quickly overcome the turnover bar of $1 million," the study says. "Naturally, in the general population, the share of small companies is much larger than among the surveyed companies."

As for the business model of software companies and their specialization, the study states the following: "It is possible to determine the share of product and service companies among all software companies only approximately, since approximately a third of enterprises have both custom development and their own replicated solutions. Russoft classifies them as one of two groups, depending on what prevails in the revenue structure for the year preceding the survey. This structure for many companies changes significantly from year to year. Therefore, they can be considered either grocery or service. "

In the past three years, as noted in the study, from 30% to almost 50% of companies that receive the main income from the sale of their own standard solutions indicated that they are engaged in custom development. "Apparently, in most cases they customize their decisions to the requests of a particular customer. However, there are cases of a separate line of business with classic custom development, "the study says.

At the same time, the study draws attention to the fact that, according to the 2019 Russoft survey, 26% of all surveyed companies are engaged in the development of software products, but do not have revenues from custom development. "At the same time, 38.7% of companies specialize in custom software development with zero sales of their own software products. 35.3% of the surveyed companies use both business models at the same time, but among them there are pronounced both service and product companies, "the study says.

At the same time, it notes: "If we smooth out fluctuations that are random in nature, then in the total population of the surveyed companies in the past few years, an increase in the share of companies that can be attributed to the structure of income to product. For example, an increase in this indicator from 22% in 2012 to a record 46% in 2019 looks quite logical. Nevertheless, the service model is not only alive, but new companies have been created for it in recent years. This phenomenon can be explained by the depreciation of the ruble since 2014, which increased the competitiveness of Russian outsourcing companies in the world market. In 2019, there are no development centers for foreign corporations at all. Most likely, their share has not changed, but they have become more informational closed, and therefore participate in polls less often. "

The study also indicates that, according to the results of the survey, it is difficult to identify any dynamics of changes in the industry by the share of surveyed companies with a certain specialization, since there are no obvious patterns in the fluctuations in indicators in almost all areas. "According to them, it is more correct to establish the approximate amount around which fluctuations occur," the study says.

It also adds: "There is every reason to believe that the share of companies with a business such as Firmware has been steadily growing in recent years. The rapid development of the Internet of Things may well explain this. And there are more and more devices with embedded software that do not transmit information over networks. The share of those companies that develop sites also increased. However, this indicator could change due to an increase in the share of respondents from the regions due to increased attention to the survey in regions where there are especially many such developers. It is possible that the share of companies developing computer games has increased throughout the industry. However, there are not many companies with such a specialization, because the identification of dynamics in terms of their number is associated with a particularly large error. "

Accounting for research results over the past four years, as indicated in the study, allows you to determine much more accurately the real geographical distribution of software companies than in a survey for one year. However, in this case, as noted in the study, the overall results were also more influenced by the degree of activity of the surveys in individual cities and regions, which gives some distortion.

The share of Moscow should be in practice more (at least 32%) than the share of St. Petersburg - up to 15%. The third place in Novosibirsk is not questioned, but most likely with a slightly lower indicator. The share of Nizhny Novgorod should be higher. There was no such large city as Yekaterinburg in the top 16, in which there are many software companies, which, apparently, is explained by the fact that it is not possible to fully cover Yekaterinburg companies with a survey. However, there are indeed few exporters among them. In total, the software development industry exists in about 55 cities of Russia (companies participating in surveys in the last four years, 56 such cities indicated). In this case, it is assumed that there are at least several companies that have sales outside their region, as well as development centers for nonresident and foreign companies, the study notes.

It is possible to talk about the existence of a full-fledged software industry at the regional level, as stated in the study, in relation to 10 subjects of the Federation.

In 10-15 more cities, this industry is being formed. In other regions, there are successful companies only in isolated cases, but they can also succeed even abroad. In general, the number of companies in the city is a completely objective indicator of the degree of development of the industry. However, not in all cases. For example, in Voronezh there are a lot of development centers for large companies in Moscow and St. Petersburg, as well as foreign corporations, but few of their home-grown companies. The undoubted leader in the number of companies per capita is Taganrog, located in the Rostov region. With about 250 thousand inhabitants, at least 100 software companies operate in it, the study says.[11]

2018

Russian software developers increased turnover by 25% in rubles

According to preliminary estimates of Russoft, announced in February 2019, the total turnover of Russian software companies in 2018 in dollars increased by 18% and amounted to $16.87 billion. In ruble terms, the turnover of companies is estimated at 1.042 trillion, and its growth is 25%.

For grocery companies, the expected turnover indicator is $8.88 billion with an increase of 12% compared to 2017, for service companies - $7.37 billion with an increase of 26%. Service companies mean those in whose turnover custom development prevails, ON specified in Russoft.

Preliminary estimates are derived without taking into account the survey of players. It will be held in mid-February 2019, after which Russoft plans to submit the final figures. Russoft noted that the discrepancy in numbers before and after the survey had previously turned out to be insignificant.

According to the results, the volume of foreign sales of Russian software should exceed $10 billion with an increase of 19%, Russoft expects. This indicator includes, among other things, revenue, which remains abroad and can go to the development of foreign offices and marketing.

President of Russoft Valentin Makarov noted that there was especially an increase in foreign sales in emerging markets, and first of all, among companies engaged in the development of information security tools.

The most attractive foreign markets for software developers in Russoft are called Germany - they first planned to enter it in 2018-2019. 16% of companies surveyed by the association. It is followed by the markets of the former republics of the USSR (except Ukraine and), Belarus as well as the countries of Scandinavia.

Russian companies are starting to enter the software and hardware systems market more and more, Russoft notes. This creates the prerequisites for export growth, since such products are often more high-margin than just software products.

Over the past year, there have been a number of large sales of Russian companies to foreign companies (Parallels, Luxoft, Transas). As a result, there are fewer reasons to consider these companies Russian, Russoft states.

According to Russoft, in 2018 fewer companies began to count on investments: only 12% of companies expected them, according to a survey conducted in February-March 2018. In 2019, 10% of the surveyed companies expect investments. Previously, about 20% of companies had such expectations, Russoft states.

Tagir Yapparov, Chairman of the Board of Directors of iT, believes that in 2018 a number of trends influenced the software development market in Russia. The regulatory framework has changed, thanks to which more PPP projects appear. In addition, there is a growing need for cooperation between developers and IT companies, integrators to create joint complex solutions. This allows you to better compete with foreign products.

Yapparov calls another trend the transformation associated with the strategy and positioning of large IT players in the Russian market. Now they are increasingly focusing on software development and services. Traditional positioning of system integrators has become uninteresting for the market. The largest players also came to the fact that business development in Russia is becoming difficult, and they are increasingly looking towards globalization. The situation has changed a lot over the past 5 years: now many companies have global plans.

Russian software developers have reduced the share of sales abroad, but want to conquer the United States and Europe again in 2 years

On September 24, 2019, the Russoft organization published a study in which it announced a reduction in the share of sales abroad among Russian software developers. However, within two years, companies intend to significantly strengthen their positions in the United States and Europe.

According to Russoft for 2018, the share of sales in Russia and near abroad from Russian software companies reached 60.6% against 54.8% in 2017. The Western World (European Union, North America, Australia) accounted for 31.8% of turnover, while a year earlier it was measured at 37.9%. The share of revenue in the so-called "new markets" (South and East Asia, Africa, South and Central America, the Middle East) slightly increased - from 7.3% to 7.6%.

The reorientation of software developers to the Russian market was the result of problems that arose in the markets of the USA, Canada and Europe - direct prohibitions on the purchase of software and a negative information background in the Western media in relation to everything Russian with suspicions of companies in espionage. However, the greatest impact was still the situation in the domestic market, which favored the increase in sales, experts say.

So, many large and medium-sized manufacturers of custom software both worked in the US and European markets, and continue to work. At the same time, they began to increase sales faster in the Russian market, which before many of them generally ignored.

The study showed that it has become more difficult to work in Western markets, but the prospects for increasing sales still exist. The surveyed companies showed their intentions to significantly expand their presence in the markets of North America and Europe by 2021.

Thus, with all the difficulties, Russian software developers consider their reorientation to the Russian market temporary and do not see indeterminate obstacles to returning to Western markets, the study summarizes.^[12]

Experts note that the conditions for increasing foreign sales in "new markets" may be better (for example, state support for marketing activities in these markets and the formation of an institution of intermediaries) than in the markets of Western countries. However, the shares of South and East Asia, Africa, South and Central America, the  Middle East are growing slowly. This growth  cannot be rapid, since entering new markets is difficult and usually requires 3-4 years. This is especially true for countries with a very different mentality from Europe.

However, the share of New Markets in the revenue of Russian software companies for 4 years increased from 14.5% to 19.3% in 2018, if we analyze the structure of only sales in far abroad. Within 10 years, the indicator is allowed to grow to 40%, which corresponds to the share of "new markets" in global software sales.

and

According to the study, the share of companies that plan to return or enter these "new markets" for the first time during 2019-2020 has significantly increased.  In the vast majority of cases, it is not planned to return, namely the debut. The share of such companies in 2019 increased 1.5-2 times compared to the survey in 2018. There is a particularly strong interest in the African market.

The Russoft report also indicates the potential for increasing exports  in the near abroad. The Ukrainian market has shrunk a lot over several years and has become more difficult for Russian companies to work on it. However, the decline in sales in Ukraine is  completely offset by growth  in Kazakhstan, Uzbekistan  and other former republics of the USSR, whose domestic markets are developing quite dynamically. At the end of 2018 , the share of the CIS in the total export of Computer Services increased to 5.9% from 5.5% a year earlier (data from the Central Bank of the Russian Federation).

Software companies grow with acute lack of investment

One in four software companies grew in 2017 by more than 20% in dollar terms. At the same time, the volume of investments once again turned out to be at least 2 times lower than the planned value. The company "Russoft" reported this on July 24, 2018 following an annual survey in which 160 companies took part.

The average growth of Russian software companies over the past 5 years amounted to 10% in dollar terms and 19% in ruble terms. There is a decent increase in sales, despite the crisis in the domestic market and political tensions that negatively affected the promotion of Russian solutions and services in Western countries. At the same time, cases when software companies cease to exist are extremely rare, and the turnover at the end of 2017 decreased only in 3% of the surveyed companies, the annual survey showed.

According to Russoft experts, there are all the prerequisites for an annual increase of over 10-15% in the coming years: for this, a favorable situation is developing both in the domestic market and internationally. About 3% of companies grew more than 2 times in 2017. It is difficult to find in Russia and abroad such an industry that would be so attractive for investments. However, most investors remain only potential, the company noted.

A 2017 Russoft survey showed that 14% of companies expected to receive external financing by the end of 2017. In reality, there were only 6% of them. In terms of volume, the difference is even greater - instead of the projected $57.5 million, it turned out to be $4.5 million. At the same time, Russoft analysts recorded an almost fourfold reduction in terms of investment in 2016 ($17 million).

A similar significant discrepancy between the planned and actual volume of attracted investments has been observed over the past 7 years, starting in 2011. As a rule, companies that reported having external funding in the previous year are 2-3 less than those that had relevant plans a year earlier. noted in "Russoft." The need may be even more at odds with actual investments, as companies do not always expect to attract investments when they can help grow even faster.

According to the survey, the leaders of many companies are confident that they could increase sales even faster with external funding. First of all, money is needed to work abroad. A survey conducted in early 2017 as part of the SAP-initiated study "Prospects for Russian IT development in the global market" showed that for 52% of software companies, the growth of foreign sales restrains an insufficient marketing budget, and for 33% - a lack of funds for the development of solutions that can be competitive in foreign markets.

It can be assumed that with annual external funding in the amount of $200-400 million, the industry can accept up to $1 billion. Moreover, if we summarize all the free resources of investment funds, state development institutions and private investors, then this volume is not so difficult to recruit. Representatives of the funds claim that they have money, but they cannot find good projects for them. High-tech entrepreneurs, on the contrary, complain that there are no investment offers on acceptable terms. At the same time, there are no difficulties with short-term financing of a long-functioning successful company, but there is not enough, first of all, "long money" (for 3-5 years). Despite the visible contradiction, to some extent both representatives of funds and entrepreneurs are right. Indeed, there are a lot of ideas that are not supported by market expertise, as well as raw ill-conceived projects. A serious problem is the presence of teams that have learned to make excellent presentations of their projects, but are not going to work on them. At the same time, claims to investment funds are still more justified, since there are a lot of dynamically developing companies in Russia, and they only need external financing for faster growth, "Russoft explained in detail the market situation.

Thus, a paradoxical situation has developed in Russia: on the one hand, there is an unmet need for investment, and on the other, owners of free funds cannot invest them in the high-tech sector of the economy, although they are interested in it. There are investors in the field of software development, but they, as a rule, worked for many years in the software industry. The funds of such venture capitalists are clearly not enough, they complain to Russoft. Foreign potential investors cannot be attracted due to very scarce information about the Russian software industry abroad. By and large, no one in Russia works with such investors.

Most software companies, including startups, develop at their own expense. According to the results of the Startup Barometer 2018 study, initiated by a venture investor Aleksei Solovyov in partnership with IIDF and EY, 71% of Russian startups are based on their own funds. Only 11% have a non-core investor, 5% have a business angel, and 3% have a venture capital fund.

According to experts, all problems associated with a shortage of investment resources can theoretically be solved by attracting money from other industries and from abroad. However, the intersectoral flow of capital is constrained, first of all, by the lack of expertise (technological coupled with market).

In 2017-2018, government agencies are once again trying to stimulate the investment process in the field of high technologies. With their participation, several investment funds have been created at once (in some cases, together with foreign partners). However, without sharing the risk with private investors and the necessary expertise, such injections are likely to have low efficiency, Russoft believes.

2017: Russian software development temporarily accelerates the domestic market

In September 2017, the association "Russoft" identified trends specific to the software industry Russia in 2016-2017. If foreign revenues of Russian developers ON have been growing steadily by 11-13% since 2014, and a similar increase is expected by the end of 2017, then sales in the domestic market in dollar terms in 2016 began to provide the main increase in income of most enterprises in the industry after a sharp reduction a year earlier.

In 2016, software companies earned at least $4.4 billion in Russia, which is 21% more than in 2015. At the end of 2017, an increase of 14% is predicted, but this estimate is based on the expectations of the surveyed companies, subject to a stable exchange rate of the national currency or its decline against the US dollar. If the ruble strengthens by 10% in 2017, growth in dollar terms will be higher - up to 25%.

The main economic indicators characterizing the software industry of Russia in 2013-2017 (growth/decline compared to the same indicator of the previous year):

	2013 *	2014	2015	2016	2017 * *
Total turnover of Russian software companies, $	more than $11 billion	$12 billion	$10.34 billion (-10%)	$12 billion (+ 16%)	$13.6 billion (+ 13%)
Overseas sales, $	$5.4 billion (+ 17%)	$6 billion (+ 11%)	$6.7 billion (+ 12%)	$7.6 billion (+ 13%)	$8.6 billion (+ 13%)
Share of foreign sales in total turnover	49%	50%	65%	63%	63%
Domestic Sales Volume, $	$5.6 billion	$6 billion (+ 7%)	$3,64 (-39%)	$4.4 billion (+ 21%)	$5 billion (+ 14%)

(*) - until 2013, Russoft did not determine the size of the total turnover, therefore there is no data on the growth of turnover compared to 2012.

(* *) - forecast

Foreign sales

Due to the frequent confusion, when the volume of foreign sales of software companies calculated by Russoft analysts was confused with the volume of foreign sales from the positions of Russian legal entities (which is measured by the net inflow of currency to Russia for the contracts they executed), instead of the concept of "export," it was decided to use the term "foreign sales." As explained in the company, not always foreign sales of software developed by Russian companies lead to the direct receipt of currency to Russia. Some of the money remains in legal entities created by Russian companies in other countries in accordance with world practice in order to be closer to the client. These funds partially go to the development of foreign development centers and sales offices, including marketing costs. And in part, they return to the country in accordance with the legislation governing holdings.

Thus, there are three different indicators characterizing the foreign economic activity of Russian software companies in 2016:

• Total foreign sales of Russian software companies - $7.6 billion (Russoft calculation);
• Foreign currency inflow to Russia from foreign sales - $4.8-5 billion (expert assessment of Russoft);
• Export of computer services - $2.7 billion (statistics of the Central Bank of Russia).

All previous reports on foreign sales in 2016 and 2017 (forecast) with reference to Russoft were based on preliminary and very approximate calculations.

Export work

In any case, software companies expect quite a decent increase in sales in the domestic market - no less than abroad. However, this does not mean that the developers deliberately reorient themselves to the Russian market to the detriment of work outside their country. After the upheaval of the Russian economy with a sharp decline in the domestic software market in 2009 and 2014-2015, the vast majority of developers are targeting export work, Russoft said. Thus, according to the study "Prospects for Russian IT developments in the global market," initiated by SAP, only 10-15% of Russian companies developing software for the corporate market are not present and do not plan to be present in foreign countries.

Russoft data suggests that many developers, who previously received all (or almost all) income in Russia and near abroad, are now considering working around the world. One of the striking examples is the creation by 1C of a subsidiary that specializes in promoting the solutions of the parent structure both in Western markets and in emerging markets.

Small business is better in the domestic market

According to Russoft estimates, the prospects for sales growth in the global market in the coming years are good, despite the problems posed by Russian companies in the markets of Western countries. At the same time, it is more difficult for small companies to work abroad than in Russia. Thus, the results of 2016 confirmed that in order to increase foreign sales, it is desirable to have a turnover of $10-20 million. But in the domestic market, the growth rate of small product companies is higher (there is no big difference in service companies). In order for such companies to gain a faster foothold in the global market, more powerful government support is needed.

Change in sales volumes in Russia and abroad depending on the size of companies and the business model used (in 2016 in dollar terms):

Change in foreign sales	Change in sales in the domestic market
Product Companies
Turnover less than $5 million	-4%	58%
Turnover from $5 million to $20 million	3%	19%
Turnover over $20 million	10%	1%
Service Companies
Turnover less than $5 million	2%	14%
Turnover from $5 million to $20 million	8%	10%
Turnover over $20 million	24%	13%

2015: Russoft Software Developer Rating

According to RUSSOFT (May 2016), the total sales of domestic software companies in the domestic market (including sales of software and services for its development and support) in 2015 amounted to approximately $5 billion. At least $1.5-2 billion of sales are accounted for by foreign vendors.

In September 2015, the Russoft Association, as part of its own annual study, for the first time compiled a rating of software companies in Russia. By and large, it is a list of the largest software companies, divided into categories depending on their turnover and taking into account growth rates (including those predicted by the results of 2015-2016).

No one has yet created such a full rating of Russian software developers. The task of RUSSOFT was, rather, not to rank companies by size, but to cover all the largest software companies in Russia. Probably, RUSSOFT has no information about any companies that deserve to get into the rating. However, it can be argued that there are few such companies, most likely, units, and they have a turnover of no more than $50 million.

Some media outlets have previously compiled ratings of IT companies, in which software companies were ranked separately. However, their ratings were clearly incomplete (they covered a maximum of half of the largest software companies), they also included system integrators (who have software development, but it is not the main area of ​ ​ activity), equipment manufacturers, as well as foreign software companies that sell their software on the Russian market.

The main reason for the incomplete coverage of software companies in existing ratings is the lack of reliable information about the total revenue of companies by which their ranking took place. In the course of this study, RUSSOFT collected information on both the sales volumes of Russian companies and their growth rates, which made it possible to have an objective criterion for ranking companies. However, a significant part of such information was obtained from a survey of companies on conditions of its non-proliferation, and the Association strictly complies with this condition. Therefore, data on the turnover of companies are not published, and the rating participants are located in categories depending on the range of turnover and taking into account the forecast of their growth rate.

The RUSSOFT rating also uses data from other ratings (CNews, TAdviser100, RIA Rating and Expert RA), but with careful verification of them.

RUSSOFT considers it not entirely correct to compare the indicators obtained from the audited reports of a number of companies with the results of the past year presented by company employees during the survey, or obtained as a result of expert assessments. Strict ranking and comparison of companies with different business models will also not be entirely correct.

Nevertheless, the compiled rating takes into account primarily the size of companies (its turnover). In order not to disclose confidential information and refuse strict ranking, 4 groups were formed from all companies in accordance with the range of turnover in which a particular company falls. All companies were divided into these groups, but data on their specific turnover was not indicated.

For each group, a fairly wide range of total revenues was determined. However, the distribution of companies by groups occurred not only by existing turnover, but also taking into account the trend of their development. The association was primarily focused on turnover at the end of 2014, but in some cases the company moved higher if it had good development prospects and high growth rates (that is, it could achieve the desired turnover to fall into a higher group at the end of 2015 or 2016).

The Top Division (Group A) includes companies that already have a capitalization of $ billion. dollars Not a single Russian software company has reached such a volume of revenue, but at least 5 companies have a billion dollar value (capitalization). The company could most likely already have a billion-dollar turnover 1C"" if we take into account its income not only from the sale of its own solutions, but also the proceeds received from its distribution activities. However, the economic crisis (primarily the depreciation ruble) had an extremely negative effect on its turnover in dollar terms, since the company receives its main income in Russia.

Quite large companies were also in Group B. Their turnover ranges from $100 million to $500 million. Among them there is only one company that in the coming years can go to the Top Division, according to RUSSOFT, the company. Veeam

In Group C ($50-100 million) there are two applicants for promotion, judging by their turnover, which is close to $100 million. However, their growth rates in recent years have not been very high.

In Group D, almost all companies have revenues ranging from $20 million to $50 million. However, it includes 3 companies with a turnover of $14-16 million, but they are able to significantly increase their income in the next 2 years.

In total, 56 software companies were included in the rating, the total turnover of which exceeds $7 billion. Companies within groups are numbered alphabetically.

Top Division (Group A)

 | 1 

 | 2 

|Cognitive Technologies

 | 3 

|EPAM Systems

 | 4 

|Kaspersky Lab

 | 5 

 | 6 

"1C"	Moscow
Moscow
Minsk
Moscow
Fintech Center	Novosibirsk
Luxoft (Luxoft Professional)	Moscow

Group

B

 | 1 

 | 2 

  |Acronis

 | 3 

  | CBOSS

 | 4 

 | 5 

  |SKB Kontur

 | 6 

  |Prognoz

 | 7 

  |Transas

 | 8 

  |Veeam

Abbyy Russia	Moscow
Moscow
Moscow
Parallels (Parallels Software)	Novosibirsk
Yekaterinburg
Perm
Saint Petersburg
Saint Petersburg

Group

C

 | 1 

|Diasoft

 | 2 

|JetBrains

 | 3 

 | 4 

|Parus

 | 5 

|BSS

 | 6 

 | 7 

 | 8 

| DataArt

 | 9 

|ICL-Services

 | 10 

|Mera

 | 11 

|RTSoft

Moscow
Saint Petersburg
Peter-Service	Saint Petersburg
Moscow
Moscow
Positive Technologies	Moscow
Dr.Web antivirus	Moscow
Saint Petersburg
Kazan
Nizhny Novgorod
Moscow

Group

D

 | 1 

|Arcadia

 | 2 

 | 3 

|ASCON

 | 4 

 | 5 

 | 6 

 | 7 

|Bercut

 | 8 

 | 9 

 | 10 

 | 11 

 | 12 

|Galaktika

 | 13 

|Garant

 | 14 

|Group-IB

 | 15 

|InfoWatch

 | 16 

| Kodeks

 | 17 

|Lanit-Tercom

 | 18 

|Naumen

 | 19 

 | 20 

|Omnicomm

 | 21 

|Paragon

 | 22 

|PROMT

 | 23 

 | 24 

 | 25 

| Soft Expert

 | 26 

Speech Technology Center| SpeechPRO («»)

 | 27 

|SPIRIT

 | 28 

|RDTex

 | 29 

|Reksoft

 | 30 

|Return on Intelligence

 | 31 

|Zecurion

Saint Petersburg
Artezio (Artesio)	Moscow
Saint Petersburg
Auriga (Auriga)	Moscow
B2B-Center ("Center for Economic Development")	Moscow
BARS Group	Kazan
Saint Petersburg
Banking Information Systems (BSI)	Moscow
Devexperts (Expert-System)	Saint Petersburg
Digital Design	Saint Petersburg
Code Format, F-Line Software (formerly First Line Software)	Saint Petersburg
Moscow
Saint Petersburg
Moscow
Moscow
Saint Petersburg
Saint Petersburg
Yekaterinburg
JSC "NIC SPb ETO"	Saint Petersburg
Moscow
Moscow
Saint Petersburg
SCANEX	Moscow
SIGMA	Saint Petersburg
Tula
Saint Petersburg
Moscow
Moscow
Saint Petersburg
Saint Petersburg
Moscow

2013: Conditions for software development business improved in Russia

In November 2014, NP RUSSOFT published the results of its own study of the conditions for doing business on software development in Russia in 2013. Based on a survey of 131 software exporters, the study showed that for the first time in 11 years of its implementation, there is a real real improvement in the conditions for this type of business.

In 2014, the share of "good" estimates and the average score reached an all-time high of 32% and 3.17, respectively, NP analysts say. RUSSOFT notes that at the same time, unlike the estimates of the last 3-4 years, the latter reflect not the expectations of the surveyed companies, but real improvements that manifest themselves in specific decisions of the government and the State Duma as part of the implementation of state projects and programs aimed at supporting IT companies.

Almost a third of the surveyed companies rated infrastructure more than satisfactorily, which, in comparison with other countries, does not so much reflect the state of the infrastructure itself as the existing progress in its development. In 2014, for the first time, there was also a significant improvement in assessments of how the problem of bureaucratic and administrative barriers is solved: the proportion of respondents who believe that this problem is being solved badly has sharply decreased - from 57% to 39%.

At the same time, RUSSOFT analysts emphasize that the survey results indicate that there is clear progress in relation to business to state actions, but not that the conditions for business are already favorable in all respects. Only the availability of modern infrastructure is assessed by respondents on average more than satisfactory - the average score is 3.17 (the "troika" corresponds to the "satisfactory" rating), and the "State Support for International Marketing Activities," the most problematic area, received only a rating of 2.44.

Surveys conducted over the past three years also show a significant improvement in the attitude of respondents to the current taxation system. The share of companies dissatisfied with how and how much they pay taxes decreased from 66% in 2011 to 30% in 2014. Among the heads of companies, compared to last year, not only there were fewer dissatisfied, but also almost 2 times the share of those who rate the tax system "good" - from 9% to 17%.

In recent years, progress has been made towards the protection of intellectual property rights, primarily for foreign companies operating in Russia. At the same time, in a 2014 study, 86% of respondents did not see changes in the field of intellectual property rights protection over the past 2 years, although they indicate the desirability of such changes.

Despite the improvement in estimates in the latest survey, RUSSOFT believes that in the next few years, business estimates regarding state support can be expected to deteriorate. Russian software companies already have sales problems in foreign markets, despite the fact that the Russian IT market is stagnating due to the economic crisis, analysts at NP state.

"It is possible that the Russian market may become more accessible to domestic companies in connection with the import substitution policy caused by the sanctions of the United States and EU countries to reduce Russia's access to modern solutions for the banking sector and the oil and gas production sector, as well as access to dual-use technologies," RUSSOFT notes. - However, the state's ability to provide preferences for domestic companies is very limited. Even if government support in reality does not change or improves only slightly, under the influence of sanctions, future respondents are likely to perceive it less positively in 2015. "

2011:3 companies from Russia in the Software 500 ranking

In 2011, among the companies included in the Software 500 ranking (annually published by Software Magazine), overall profit growth by 2010 was 17%. A total of 85% of the rating companies in 2011 showed positive revenue dynamics, compared to 72% in 2010. In total, the revenue of 500 ranking companies in 2011 amounted to $643.6 billion, compared to $549.3 billion in 2010.

Top 20 Software 500 ranking companies, 2011

Software Magazine, September 2012

According to the results of the 2011 ranking, the top ten global software companies in terms of revenue were in descending order of position in the rating: IBM, Microsoft, HP, Oracle, Accenture, EMC, SAP, CSC, Capgemini and Hitachi. Positions from tenth to twentieth were taken by: NTT Data, General Dynamics, SAIC, Synnex, Atos, Lockheed Martin, Tata Consultancy, Logica, Symantec and Cognizant Technology.

Interestingly, in the top twenty global software companies, most of the players represented are headquartered in the United States, and only one company represents Germany, another - Great Britain, France and India, as well as two more - Japan.

A similar proportion is observed in all other rating positions: there are a lot of companies from the USA, India, Europe and a number of Asian countries, for example, China. As for the success of Russian developers, in the ranking they are represented in only three positions - in the second, third and fifth hundred players.

Thus, Luxoft (Luxoft Professional) took 186th place with revenue for 2011 in the amount of $252.1 million (growth by 2010 - 39.2%), R&D expenses in 2011 in total revenue - 1.1%.

Company Forecast ranked 292nd with revenue of $82.6 million (plus 40.2% compared to 2010) and R&D expenses of 4% of revenue.

On the 466th line, you can also find the Russian company Artezio (Artesio) with revenue for 2011 in the amount of $10.5 million (an increase of 39.5% by 2010), R&D expenses in 2011 - 4.8%.

Interestingly, the compilers of the rating mistakenly attributed Minsk Softclub to the "Russian" companies. It is located on the 460th line with revenue of $11.5 million for 2011.

2010: Gartner: Russia is a "good" place for software development

In December 2010, Gartner analysts announced a new list of 30 countries most attractive for offshore development. This year, only countries with developing economies got into it, and Russia's rating on key positions was lowered.

The first 30 countries for offshore services in 2010, by region:

• America: Argentina,, Chile, Brazil Colombia, Costa Rica, Mexico, Panama and Peru.
• Asia-Pacific: Bangladesh, China, India, Indonesia, Malaysia, Philippines, Sri Lanka, Thailand and Vietnam. Europe, Middle East and Africa
• EMEA: Bulgaria, Czech Republic, Hungary, Egypt, Mauritius, Morocco, Poland, Romania, Russia, Slovakia, South Africa, Turkey and Ukraine.

For comparison: in the countries of the "Top 30" list, Gartner observed some deterioration in the assessment of education systems, in the EMEA region in 2010. Russia slipped in 2010 from "very good" to "good," while Hungary and Romania moved from "good" to "mediocre." In addition, the 2009 leaders in cost attractiveness - Egypt, Slovakia, and Ukraine - rolled back from "very good" to "good," while Russia returned from "good" to "mediocre," thus pointing to costs currently pressuring a combination of economic slowdown and increased demand for scarce resources.

See also

Russian Software (Domestic Software)

Gartner downgraded Russia's offshore rating

Notes