Software Development in Russia Business Opportunities for the US

1
Software Development in Russia Business
Opportunities for the US

• Russian-American IT round table
• within the program of the President Bush visit to
  Russia
• May 24, 2002, Moscow
• Valentin MAKAROV
• President of RUSSOFT
• National Software Development Association, Russia
• www.russoft.org

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National Software Development Association
(RUSSOFT)

• More than 50 companies from major IT regions of
  Russia and Byelorussia
• More than 5000 highly qualified developers (out
  of total 30.000 in Russia)
• Based on the world-leading universities (in 2000,
  2001 absolute winners of the ACM Collegiate
  Programming Contest)
• Total export turnover around 150M (out of 300M
  in total)
• Cover all possible spheres of the IT competence
• Customers in the US and Canada, in the Far East
  and in all parts of Europe

3
Dynamics of software development outsourcing
market
In the World increase 65, CAGR
18 Asia-Pacific increase 94, CAGR 24 Source
Dataquest
In Russia increase 277, CAGR 56 Source
Market-Visio/EDC
4
Dynamics of software export Market in Russia
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Particular Features of Russian Software
Development Industry

• Strong fundamental educational system
• Profound scientific knowledge
• Genetic memory of managing complicated RD
  consuming projects from the Cold War time
• Natural incentiveness and abilities for
  engineering innovations
• Adherence to the Agile Programming approaches
• Open mind and proximity to Europe

6
Russia and India software development industry

• India
• (export turnover 6,2B)
• Education B-
• RD B-
• PM B
• QA A
• Price B
• State support A
• Political risks B-
• Cultural barriers B
• Local IT market C

• Russia
• (export turnover 0,3B)
• Education A-
• RD A
• PM C
• QA C
• Price B
• State support C
• Political risks B
• Cultural barriers B
• Local IT market B

7
History of software development as business in
Russia

• Massive departure of software developers from
  Russia to the West. Creation of first wave of
  outsourcing companies in Russia
• Growth and first success on the international
  market. Creation of Software Development Centers
  of Motorola, Intel, LG, Sun Microsystems,
  Samsung,
• Formation of a solid and prospective Software
  Development Industry in Russia. Creation of
  RUSSOFT. From mere outsourcing to specialized
  products and services and partnership relations

• 1988 1994

1994 1998
1998 2002
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1988- 2002 (continuation)

• Intensive certification to ISO 9001/2000 (12
  companies), first CMM Level 4 certifications
  (Luxoft, Telma).
• Successful investments (Paragraph), mergers and
  acquisitions (EPAM Systems)
• Delivering critical solutions and applications to
  the Fortune 500 Corporations(Dell, IBM, Boeing,
  Texas Instruments, Motorola, CSC, Sun
  Microsystems, NEC, Toshiba, Panasonic, Samsung,
  )
• Strong penetration of Russian software companies
  on the US market (VDI, Luxoft, Auriga, EPAM
  Systems, SPIRIT, IT)

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Opportunities for large American
companieshigher effectiveness, reduced costs

• Creation of RD Centers
• Intensive RD in Mathematics and Computer Science
• Well-known success stories
• Creation of Software Development Centers
• Availability of highly-skilled resources
• Providing Solutions in stressful and uncertain
  situations where incentive is the priority
• Large-scale partnership relations
• focus at finding effective business solutions
• Implementing Agile Programming
• Outsourcing and growing trend towards creation
  of joint products and services

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Opportunities for mid-size ISVsleverage into
EMEA markets

• Technology issues
• Faster time-to-market
• Availability of specialized skills and new
  technologies
• Setting up Centers of Competence
• Business issues
• Reduced costs for local support and project
  services for EMEA region
• Increased capitalization via JVs

• Typical scenario of cooperation

Strategic partnership
Joint product developmentmarketing
Software outsourcing
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Conclusions

• Within the last 2-3 years a new branch of Russian
  industry was born competitive, prospective
  just an engine for the new economy of the
  e-Russia
• American market has been neglecting that fact due
  to political prejudices, long distances and
  current recession in the US economy
• Validation of Russian resources is the strategic
  way for American IT business in the forthcoming
  future

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How to exploit joint US-Russian software business
opportunities?

• Political decision to render priority to
  US-Russia cooperation in the field of software
  development, its promotion through Mass Media
• Working group within US-Russia business dialogue
• Action Plan
• Establishing Relationships between IT
  Associations of both countries
• Extending of mutual exhibiting activity

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Software Outsourcing Summit

• 05-07.06.2002, St.-Petersburg
• Organizers Consortium Fort Ross, RUSSOFT,
  Association Norden with support of the
  Administration of Saint-Petersburg
• Plenary Session, Panels, Round Tables, Exhibition
  of Companies and Solutions, Match-making area
• Participants more than 400 representatives from
  Russia and from all over the World.
• More information on www.soft-outsourcing.com

You are cordially welcome!!!
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RUSSOFT business partnership and cooperation
bridge beetween US and Russia in IT