RUSSIAN SOFTWARE DEVELOPING INDUSTRY AND SOFTWARE ...

RUSSIAN SOFTWAREDEVELOPING INDUSTRYAND SOFTWARE EXPORTS7th annual surveyWith support fromAPKIT AssociationRUSSOFT Association2010

From the EditorDear Friends,I would like to share with you the results of the 7th AnnualSurvey of the Russian Software Export Industry, conducted by theRussian Software Developers Association (RUSSOFT) in February -April 2010.RUSSOFT is the leading association for providers of softwaredevelopment services and software products in Russia and it alsoincludes several leading companies from Belarus and Ukraine(together more than 70 companies).In the course of this survey we collected more than 160 qualityquestionnaires in 2010, completed by our respondents amongexport-oriented software development companies, which is almosthalf as much as during any of our previous surveys. In additionto questionnaires, the RUSSOFT analysts gathered a significantamount of information from other sources, primarily reports ofresearch agencies, official reports of the companies and mediapublications.Our analysis is validated by consistent application of the same methodology that we have usedfor the past 7 years to survey respondents and to analyze the results of the polls, as well as by theknowledge and experience of Dmitry Zhelvitsky from ComputerWorld, our leading analyst of lastfour years. This report was edited by Andrey Terekhov, a recognized guru of Russian softwaredevelopment industry, Head of System Programming Chair at the Saint-Petersburg State Universityand CEO of Lanit-Terkom. The English translation of this report was provided by ABBYY LanguageServices which ensured its high quality.As a result, we have a document that presents a clear picture of the state of the industry andhighlights the main trends of its development.The acute phase of the global economic crisis ended in 2009, and, by the end of last year, weeven witnessed some signs of market recovery that continued at the beginning of 2010. This led toa quality change in the situation, so we felt it was important to analyze how the market was reactingto ongoing changes and make some assumptions about the future.The Russian software export industry continued to grow in 2009. These exports were largelyimpacted by the sharp drop in the Russian IT market (according to IDC, this drop made up of 37%).However, even for their total turnover (including the Russian market), the revenue of exporters wasreduced only by 5% while exports grew in general by 5% (up to $2.75 bln).There was further growth in the software products segment (in 2009 for the first time its volumeof sales exceeded $1 bln), the providers of software technology services preserved their share inthe exports, and only the Russian development centers of foreign companies reduced the exportsof their services. The geography of exports has expanded and shifted further to CIS countries andto the new Russian markets (South East Asia, Africa and Latin America).The industry has changed its assessment of government policies. Now, it is more demandingand critical. There is an emerging trend to prepare the companies for the growth which is reflectedin the desire to attract investment for development in 2010-2011.I am confident that conclusions and forecasts provided in our report will help you to betterunderstand the state of the industry so that your business can most effectively benefit from theadvantages offered by Russian software developers.I would like to thank all who took part in this survey and thus allowed us to prepare acomprehensive, valid and reliable source of information about the Russian software export industry.Editor-in-chief of the 7th edition,President of the RUSSOFT AssociationValentin Makarov1

CONTENTSCHAPTER 1. POSITION OF RUSSIA IN THE GLOBAL MARKET OF SOFTWAREAND SOFTWARE DEVELOPMENT SERVICES......................................................... 3Mass Media, Analytics and Conferences......................................................................................... 4Ratings of Research Companies...................................................................................................... 6Russian ICT Market.......................................................................................................................... 7The Impact of the Crisis on the Industry....................................................................................... 10CHAPTER 2. VOLUME AND STRUCTURE OF RUSSIAN SOFTWARE EXPORTS....................... 12Products and Ready-Made Solutions............................................................................................ 14International Software Development Centers.............................................................................. 15Exports of Services........................................................................................................................ 15The Global Software Market and Ways to Increase Sales for Russian Suppliers........................... 16CHAPTER 3. MAJOR TRENDS IN THE RUSSIAN SOFTWARE DEVELOPMENT INDUSTRY....... 18Quality Management System Certification.................................................................................... 20Attracting Investments.................................................................................................................. 21CHAPTER 4. GEOGRAPHICAL DISTRIBUTION AND KEY VERTICAL MARKETSOF THE RUSSIAN SOFTWARE DEVELOPMENT INDUSTRY................................. 22Main Geographical Markets.......................................................................................................... 23Vertical Markets............................................................................................................................ 25Geographical Distribution of Marketing and Sales Offices of Russian Companies....................... 26Geographical Distribution of Development Centers.................................................................... 27CHAPTER 5. HUMAN RESOURCES AND LABOR MARKET...................................................... 29Staff Recruitment and Personnel Cuts.......................................................................................... 31Staff Training. Universities............................................................................................................ 31Staff Turnover............................................................................................................................... 35Salaries......................................................................................................................................... 35Language Proficiency................................................................................................................... 36Situation in the Labor Market in Russia and Other Countries....................................................... 37CHAPTER 6. TECHNOLOGIES................................................................................................. 39Operating Systems....................................................................................................................... 40Databases.................................................................................................................................... 41Programming Tools...................................................................................................................... 41SUMMARY............................................................................................................................... 43PARTICIPANTS OF THE SURVEY.............................................................................................. 462

Chapter 1.Position of Russiain the Global Market of Softwareand Software Development Services

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesAmid the global economic crisis, the most difficultperiod for Russian software developers practicallycoincided with the past calendar year. The problemsrelated to declining sales, frozen projects and delayedpayments started to surface in October-November2008 while the improvement came about in the firstmonths of 2010.The negative effects of the crisis weredemonstrated by the halt of the Russian softwareexport boom that continued for almost the entirepast decade. At the same time, for the softwaredevelopment industry in general, the positive outcomeof the experienced shock and the turnaround ineconomic activity may offset all occurred losses in thelong run.A more accurate assessment of the impact of thecrisis will become possible in several years. The analysisof past year’s results leads to the conclusion that forRussia there were no radical changes in the globalsoftware market. Most of the export companies safelysurvived the hard times. There were new businessareas and prospective companies even amid thedeclining demand. Russia preserved all its advantagesover other countries that compete with it. However,there still was no breakthrough in resolving the mainindustry problems. Partly because of this, the potentialfor software development industry remains large.One of the main unresolved challenges for theindustry on the global market remains the existingnegative image of the country that does notcorrespond to reality. There are some improvements,though, even in this area. For example, in 2009Russia increased by 11 points in the Global ITIndustry Competitiveness Index prepared by theBritish research company Economist Intelligence Unitand climbed to 38th place ahead of all other BRICcountries. The researchers have estimated the generaleconomic situation in the country, IT infrastructure,human resources potential, legal regime, the levelof research and development and governmentsupport for the IT industry. Most likely, such significantimprovement was not related to real changes in thebusiness environment but rather was a result of theimproved image of the country and availability ofmore comprehensive information about Russia forforeign experts.Still, the Russian government needs to providemore active information support to domestic hightechcompanies that promote their solutions andservices on foreign markets. Currently, such supportcan be called neither powerful nor even serious.At the same time, the managers of corporations,who seriously and for more than one year considerthe opportunities for placing software developmentorders, are already aware well of the possibilitiesfor successful cooperation with Russian servicecompanies. At least half of the largest companiesin the world (according to the ratings preparedby various newspapers and magazines) place theirorders for software development in Russia. Severaldozen large Western companies created their owndevelopment centers in Russia.Their number remained almost unchanged forthe past year. There was information about a smalldevelopment center of SAP in Russia that reports tothe company’s German office. Deutsche Bank openedits IT division in Saint Petersburg and there were sometalks about AMD and Nokia intentions to create theirown software development centers in Russia.Companies which have their own researchand development centers in Russia:Alcatel-Lucent, Allied Testing, AVIcode, Cadence,Design Systems, Chrysler, Columbus IT, Dell, Digia,EGAR Technology, EMC, EMS, Ericsson, Google,Hewlett-Packard, Huawei, Intel, InterSystems,Jensen Technologies, LG Softlab, Motorola,NetCracker, Nival Interactive, Nokia, Siemens,Quest Software, RD-Software, Samsung ResearchCenter, SAP, Scala CIS, SmartPhoneLabs, SunMicrosystems, Tagrem Studio, Teleca, T-SystemsMass Media, Analyticsand ConferencesAnalysis of publications in the world’s leadingeconomic and specialized media as well as on thewebsites of the research companies demonstratesthat by their still dominated the negative coverageof Russia. Our analysis considered 35 newspapers,magazines and online media resources. Those weresearched with keywords “Russia” and “Software”.As a result, we found almost 3,000 reference linksto the articles. After excluding the articles that arenot related to IT and software as well as those thatmention Russia in the larger list of other countries(usually, to estimate the perspectives of IT market), wediscovered that 40% of publications create a negativeimage of the country.There was an enormous number of articles on theRussian role in the distribution of spam, computerviruses and cyber attacks. As a result, readers areunder impression that Russia is an absolute worldleader in that area. After discovering an attack onsome large bank, the press is very often immediatelyaccuses Russian hacking groups for being responsible,simply by adopting the approach: “Who else couldit be?” In reality, experts believe that such attacksare usually conducted by international groups thatinclude Russian hackers among the representativesof other countries. The part played by Russia in thedistribution of spam and computer viruses is not asoutstanding as it is presented by the mass media.It simply reflects the sheer size of the country and the4

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development Servicesavailability of a large number of technically trainedprofessionals. According to the ratings prepared byantivirus products developers, Russia concedes theleading positions in that area to several countries,including the USA.In the ratings of largest spam “providers” forJanuary-February 2010 (prepared by Panda Security)the first position is occupied by Brazil, the secondand third place are shared by India and South Korea.Russia lies only in 6th place, behind the USA.According to Symantec, Russia entered to the Top10 countries in terms of high malware activities in theInternet only in 2009. Currently, it occupies 7th placewhile the first and the second are already for severalyears steadily held by the USA and China, respectively.The report by Kaspersky Labs also confirms that inApril 2010 the USA was the world leader in terms ofthe volume of distributed spam. More than 12.3% ofall unsolicited mail was sent from US territory. In thisrating Russia is 5th with 4.2%.According to McAfee, in the first quarter of 2009,the leading role of the USA in the generated volumeof unsolicited mail was even more certain (35%against 9.8% for Brazil that comes second). Russia wasthen 7th. On other matters, many media publicationsdemonstrate about the same level of impartiality.Unfortunately, the events and publications thathave no connection to IT may also have an impacton Russian software exports. We know, at least,about one instance where a Russian company lostits contract as a result of inadequate press coverageof the five-day military conflict between Russia andGeorgia. Even though the middle level managersworked especially hard to find the best contractorand prepare the deal, the CEO of one of theforeign companies renounced mutually beneficialcooperation with the Russian customized softwaredeveloper in response to the Russian “invasion” ofGeorgia in August 2008. It is noteworthy that thereare more publications favorable to the exports byRussian software companies in the specialized mediathat are far removed from any political game, and inthe media of the countries that adopt a fence-sittingtoward Russia.Only 15% of analyzed publications, that may havean impact on the image of Russia as provider of ITtechnologies, contribute to the positive image of thecountry. It is hard to say how this indicator changedin comparison with the previous years, because wemade no such calculations for foreign press analysisbefore. However, we can assume that this indicatordid increase. Such an assumption is based on the factthat specifically in 2009 there were publications in theforeign press describing the leading role played byRussia in implementing WiMAX technology.There were other news leads for the articles thatimprove the image of the country. For example,Andrey Ternovsky, a 17 year old secondary schoolstudent, created the Chatroulette.com website thatsuddenly became very popular on the Web. This newsitem was reported in several foreign publications(Spiegel, The New Yorker and others).The foreign press also noticed the activities of theRussian Digital Sky Technologies fund that purchaseda large package of stock in Facebook, the world’smost popular social network, and later a share inZynga, a social gaming company.There were a series of publications about thepurchase of Taihoo Technologies, a Chinese servicecompany, by Exigen Services. However, Russia wasrarely mentioned in such publications and thenonly as a location of one of the many of Exigendevelopment centers which was mostly referred as anAmerican company. In reality, its main developmentscenters are located in Saint Petersburg, in the Ukraineand in Latvia.Unfortunately, PR activities of certain companiesthat might be considered as Russian, sometimes fail tocontribute to an improvement of the image of Russia,because in many publications about Russian softwareexporters their affiliation with this country is not evenmentioned. This is even more surprising because it isin the interests of the same companies to promotetheir country and region in general (for example,under the East European Outsourcing Pole brand,comprising Russia, Belarus and Ukraine).At the same time, in certain cases the companiespromote not only themselves but Russia as well.Luxoft is the most often cited company amongRussian companies working in the global softwaremarket. The managers of this company are ofteninvited as experts for preparing reviews and articlesabout various industry issues. For example, theircitations can be found in 2 large articles published byThe Financial Times in October 2009 and in February2010. The first article is about the Russian softwareindustry and the second on increased investmentdemand in Russian high-tech companies.The range of foreign media that the Russiancompanies have contacts with is very large. These arenot only world-famous newspapers and magazinesbut also popular publications in the countries, andin the regions where the Russian software developersare present. We can mention only a small part of this.In addition to the aforementioned Financial Times,the activities of Russian software developers duringthe past year (up to the spring of 2010) were coveredby such publications as Financial Sector Technology,The Economic Times, Wall Street Journal, BusinessWeek, The Los Angeles Times, Washington Times,CIO Magazine, Software Magazine, TechNewsWorld,InfoWorld, IT Europa, ZDnet, eWeek and CNET.Media and news resources of research companiescovered by this research:Aberdeen Group, Asia Times, BCC, BusinessWeek,CIO Magazine, CNET, Computerworld, TheIndependent, EE Times Europe, eWeek (PC Week),Financial Times, Forbes, Forrester Research, Gartner,5

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesGlobal Services magazine, Government ComputerNews, The Hindu, IDC, IT Europa, IT Week, InfoWorld,InformationWeek, Linux Magazine, MacWorld,Network World, The New York Times, PC World,REUTERS, Smart Enterprise, TechNewsWorld,The Washington Post, The Wall Street Journal,The Washington Post, Virtualization Journal, ZDnet.The character of foreign media publications containing thekeywords “Russia” and “Software” (from January 1 throughDecember 31, 2009)*Create a negative image of Russia 24%Unlikely to have an impact on the image of Russia 24%Create a rather positive image of Russia 10%Russia mentioned only in a list with many other countries 42%Articles that bear no relation to IT 29%* – more than 100% in total because some articles correspondto more than one characteristic.Ratings of Research CompaniesThe 2010 Global Outsourcing 100A year ago, we expected that the representationof Russian software developers in the ratings of thebest service companies in the world would remainstable, at least for the next several years. As a matterof fact, by 2007-2008, clear leaders were determined.Recently, the distance between these leaders andother companies has grown or, at the very least, it hasnot diminished. The leaders were growing by takingover small and even medium-size software companiesor by labor pirating.However, it has transpired that Russia is a bigcountry where the concentration of resources maywell coexist with the emergence of rising stars. Onesuch star is Sibers, a small company from Novosibirsk.It was included for the first time in The 2010Global Outsourcing 100, prepared annually by theInternational Association of Outsourcing Professionals(IAOP). It was not included in the Top100 (75 leaderand 25 rising stars), but did feature among the bestin certain nominations. Sibers earned its place amongthe Best 10 Rising Stars in the area of “Entertainment &Media”, and in “Services”. Furthermore, the 2010Global Outsourcing 100 reflected its successful workin Australia and New Zealand (Best 10 by RegionServed). It is not impossible that in other large Russiancities there will also be companies aspiring to beamong world leaders.IBS DataFort is another Russian newcomer in therating but this company is focused on the Russianmarket. It was included among the Top 5 in EasternEurope. There are also other very large servicecompanies in Russia. By all accounts, the inclusionof DataFort in the 2010 Global Outsourcing 100 isprimarily the result of the fact that this companywas suitably active in providing information aboutitself to organizers of the rating. Therefore, wecan assume that other Russian service companies,based on their turnover and quality of the work theyperform, can aspire to high ratings from internationalrating agencies. The question is only how to usethe acquired ratings in the interests of the business.Until now, the availability of international ratings wasnot taken into consideration during the selection ofservice contractors in the Russian market.Despite the emergence of newcomers, thenumber of companies from Russia and neighboringRussian speaking countries in the Top 100 of thisrating diminished from 8 to 7. Their positions wereretained by EPAM Systems (among 75 leaders) as wellas Auriga, MERA Networks and Itransition. Luxoft(that was previously among the 75 leaders), DataArt,Intetics and Reksoft left the Top 100. In 2010 IBAGroup was included among the leaders while SaMSolutions and SoftServe entered the 25 rising stars list.All companies from Russia and neighboringRussian-speaking countries that left the Top 100remain among the best in various additional ratings.They were joined by Artezio which cannot be calledthe Discovery of the Year, unlike Sibers, and also byAllied Testing and SoftServe. Artezio entered TheGlobal Services&Tolons rating for the first time, but itwas mentioned in other similar ratings and analysts’reports many times before. Allied Testing waspreviously considered to a foreign company with adevelopment center in Russia but, based on a numberof its Russian staff and other characteristics; it couldbe easily regarded as Russian.Therefore, Global Services&Tolons, in its mainand additional ratings mentioned 13 companies fromRussia and neighboring Russian-speaking countriesand this is more than in previous years.You will not find Exigen Services, one of the largestoutsourcing companies in Eastern Europe, in this list.It was only mentioned among the companies thathave a larger part of their specialized staff working inRussia. We also noticed the exclusion of Luxoft fromthe 75 leaders, a company of similar size, which wasincluded only in one additional rating in 2010. Mostlikely, Exigen Services and Luxoft did not deem itnecessary to provide the rating organizers with theappropriate information. As global companies withdevelopment centers and representative offices indifferent countries, they deserve to be among thebest, not only in separate categories but also in theTop 100. With these two companies, a powerfulcorporate pool – the “East European OutsourcingPole” uniting Russia, Belarus and Ukraine.In additional Global Services&Tolons ratings Russiaand other Russian speaking countries are mostlyrepresented in the following categories: Best 20 RisingStars – Telecommunications (8 companies), Best 10Rising Stars – Research & Development Services (6), Best20 Rising Stars – Information/Comm. Technology (7).6

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesDeloitte Technology Fast 500 EMEAAs in last year, there were only 4 Russiancompanies in the 500 fastest growing high-techcompanies of the EMEA region, however, 2 of themare now different. Instead of dropped out Sitronicsand Armada, the rating now includes a satellitecommunications operator IPNet (35th place) andan outsourcing company Exigen Services (308th).Progresstech LLC (219th) and Luxoft (283th) have kepttheir places in the Fast 500 EMEA rating. The numberof Russian companies in this rating is still small. Forexample, France and the UK are represented by 80and 87 companies, respectively. Russia is behindTurkey that has 30 representatives and Hungary(with 4). The problem is the unwillingness of mostof the Russian high-tech companies to provideDeloitte with their audited financial reporting for thelast 5 years.Software 500The number of companies from Russia, Ukraineand Belarus in the Software 500 rating (accordingto Software Magazine) has increased. EPAM Systemsclimbed from 190th to 180th place and IBA Group –from 260th to 254th. The management and mainproduction facilities of these companies are located inBelarus, but in this rating they represent the USA andthe Czech Republic, respectively (because they havehead offices in these countries). iTransition (409thplace), a company from Belarus, and CS Odessa (496thplace), a company from Ukraine, are newcomersin the rating. About 30-40 other Russian softwarecompanies might get into the Software 500 ratingbased on their turnover and some of them evenmight have been close to the first hundred. However,for various reasons, they are not currently preparedto provide their information to authors of theSoftware 500 rating list.Top 50 emerging global outsourcing citiesGlobal Services and Tholons published theirresearch on the fast-growing global IT and businessprocesses outsourcing centers that ranked the citiesby their attractiveness for service providers. SaintPetersburg was an absolute leader in the rating ofemerging R&D centers, ahead of Bangalore, Moscow,Shanghai and Dublin. Moscow and Saint Petersburgalso entered separately into the ratings of majorcities in the categories of “engineering services”,“healthcare services”, “product development” and“games development”. The efforts of RUSSOFTAssociation and its members allowed NizhnyNovgorod to number among the 10 contestants forthe Top 50 nomination. Global Services and Tholonsstill have little information about other Russian cities,but more 2-3 cities have a good chance of enteringthe Top 50 Emerging Global Outsourcing Cities ratinglist in coming years.Compilation of new rating lists The Black Bookof Outsourcing and The Global Services 100 was notcompleted by the time of release of this report.Therefore, we have only last year’s data for theseratings.5 companies were included in The Black Book ofOutsourcing: Auriga, EPAM Systems, Exigen Services,Luxoft and Reksoft.The East European Outsourcing Pole wasrepresented in The Global Services 100 list by suchcompanies as EPAM Systems, Exigen, Reksoft, MeraNetworks, Luxoft, Intetics and IBA. They were listedin the 100 best outsourcing companies. Another twocompanies (Auriga and DataArt) were among the10 leading East European Companies.Russian ICT MarketThe global financial crisis (felt stronger in Russiathan in the West) had a negative impact on theRussian market of Information and CommunicationsTechnologies (ICT) that had been growing by 15-20%annually in previous years. According to IDC, in 2009the ICT market fell by 37% (in USD) while the IT marketdropped by 42.1%. This major contraction of the ICTmarket in US dollar terms was primarily the result ofchanges in the RUB/USD exchange rate (according toIDC, the average ruble exchange rate fell by 28%). Bycalculating in rubles, the indicators look much better.IDC data suggests that the ICT market droppedby 20% in 2009. According to Russian governmentstatistics, however, the market even grew by 2%.In many cases, measuring the market in nationalcurrency is well justified. However, this should alsotake into account the level of inflation, which wasabout 9% in 2009. Therefore, there was still a decline,albeit a small one – regardless of the currency used incalculations.The situation for telecomm companies was better.There was stable demand for communications services.Russians do not give up communications serviceseven at times of serious economic hardship. This alsoincludes Internet access services. Since the market forthis service is not yet saturated, it continued to boomdespite the global economic crisis.The information technologies market felt theimpact of economic shocks to a larger extent.Enterprises and individual consumers lookedfor savings on new computers, software andmodernization of IT infrastructure. According to theMinistry of Economic Development and the Ministryof Communications and Mass Communications, thecrisis led to a 13-14% decline in the IT market. IDCanalysts estimated that there was a larger fall by22% in ruble terms and by 37% (42.1%) in US dollarterms. The data provided by the Ministries does not7

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesMain Indicators of the Russian ICT Market in 2009Indicator 2008 2009Revenue ofIT IndustryEnterprisesRevenue ofIT IndustryEnterprisesCapacity of theIT marketCapacity of theIT marketCapacity of theICT marketRevenues fromCommunicationsServicesCapacity of the ITservices marketCapacity of the ITservices marketseem accurate. However, IDC also have probablyexaggerated the extent of the fall, if we consider thebusiness results of companies with leading positionson the Russian IT market. Still, we can confidentlyassume that there was approximately a 35% marketcontraction in US dollar terms.For any country with a stable economy, such a fallwould probably look like a disaster. This drop seemsespecially significant given the decrease of the globalICT market and IT spending by about 2-4%.However, there was no disaster in Russia. Somesmall companies went under or are on verge ofbankruptcy, but the industry, as a whole, sailedsmoothly through the crisis. Certain segments ofthe IT market have experienced 30-50% growth inprevious years. Therefore, the crisis may be seen as ayear-long break in the past decadeof economic boom. There is everyreason to expect the resumption ofmarket growth almost at the samepace as before.These favorable forecasts arebased on the ongoing recoveryof demand. In specific segmentsthe growth already resumed inthe fourth quarter of 2009, andthe results of the first quarter of2010 confirm that the majorityof market players feel less of thenegative impact from the crisis.According to government statistics,the Communications and ICTindustry (excluding small businessentities) showed a 12.3% growthin the first three months of theyear. Enterprises of the electricalDecline (-) /Growth (+)580 bln rubles 500 bln rubles -14%570.7 bln rubles 496.5 bln rubles -13%615.3 bln rubles($24.8 bln)446.7 bln rubles($14.1 bln)SourceMinistry ofCommunications andMass CommunicationsMinistry of EconomicDevelopment-22% (-37%*) IDC— 407 bln rubles -25% PMR1.77 trn rubles 1.8 trn rubles +2%1.22 trn rubles 1.3 trn rubles +6.4%Ministry ofCommunications andMass CommunicationsMinistry ofCommunications andMass Communications$5.2 bln $2.6 bln -50% IDC— about $4 bln -30-33% Asteros Group* – according to latest figures, the decline constituted 42.1%Specific segments of the Russian IT marketcommunication sector and postalservices increased their sales by8.6% and ICT companies by 29%. Itis important to note that the rublehas appreciated over this period.Thus, there was even highergrowth in US dollar terms.Laptop sales increased 2.5 timesin the fourth quarter of 2009 (IDCQuarterly PC Tracker) comparedto the same period last year. Thegrowth in the desktop computerssegment, that are being displacedfrom the market by laptops, issignificantly lower – only 4.7%.According to Gartner, laptopsales increased in 3 times in thefirst quarter (desktop computersales increased by 16%). In thefourth quarter of 2009 the marketfor data storage systems grewby 14.5% compared to the sameperiod in 2008 while in the firstquarter of 2010, it grew by 60% (IDC).Despite the general decrease in the Russian ICTmarket, we have seen further progress in certainsegments during the crisis of last year. There was acontinuing boom in certain segments, increasedeffectiveness of investments in the IT infrastructureof the enterprises and improved market structure.Primarily, we should note the positive changesof various Internet-related indicators. There wassignificant growth in numbers of World Wide Webusers, broadband subscribers, mobile Internet users,custom Web development projects, domain namesin the .RU zone, social networks users etc (see thetable). In Moscow, Saint Petersburg and certainother major cities in Russia the broadband accessmarket is close to being saturated, while the InternetIndicator 2008 2009 Change SourceNumber of purchased Computers(Laptops, includingNetbooks)Number of purchasedMonitorsNumber of purchasedPrinters and MultifunctionDevicesNumber of purchased UPSDevicesCapacity of The Market forData Storage SystemsCapacity of The Market forCustom Web DevelopmentProjectsCapacity of The SoftwareMarket————7.3 mln pieces(3.3 mln pieces)4.75 mln pieces(for $0.95 bln)3.2 mln pieces(for $632 mln)1.58 mln pieces(for $281 mln)— $182.5 mln—9.2 bln rubles(about $290 bln)-26% (-16%) ITResearch-35% (-52%) ITResearchReduced almostby a third(-40%)ITResearch-40.7% (40.5%) ITResearch-38.5% (+17%in terabytesof deployedsystems)+35% (+5%)IDCTagline ExpertGroup$3.2 bln — -30% IDC8

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development Servicespenetration rate in this category is on the level ofworld leaders (in Moscow the Internet penetrationrate exceeds 60%).This indicator puts Russia closer to the industriallydeveloped world rather than to the majorityof developing countries. According to a researchreport of the International Telecommunication Union(ITU), by the end of 2009 about 26% of the worldpopulation had access to the Internet. In Russia thisrate is 40% (according to some estimates, it is evenhigher).According to J’son & Partners, in Russia therevenue of mobile operators from mobile access tothe World Wide Web in 2010 will exceed the revenueof broadband cable Internet access providers.Yandex estimated a number of websites in theRussian Internet [Runet] at 15 mln in the fall of 2009,which amounts to 6.5% of all Internet sites. Russianshare in the global online games market is 3.3%.At the same time, Russia has only 2.5% of the world’spopulation. The Russian share in the world’s GDP isabout the same. Russia became the first country inthe world that was authorized by ICANN to have itsown national Cyrillic top-level domain (this allows thecreation of websites with addresses composed fromcharacters of the Russian alphabet). Therefore, weconclude that, despite the crisis, Internet technologiesin Russia were experiencing a boom. This is true bothfor deployment and development. Many IT start-upsare related specifically to Internet technologies.Even though the sales of smartphones in Russiafell more than the sales of regular mobile phones,a number of 3G and 4G network subscribers grewsignificantly in 2009. At the time of the crisis, Russiamade a push in deployment of WiMAX, where itbecame a world leader.Use of Internet Technologies in Russia in 2009Indicator Period Total AmountVolume of 3G and GPRS/EDGE* MobileInternet Access market in RussiaNumber of Mobile Internet Users inSaint Petersburg (service sales by MobileOperators)Changeof IndicatorPenetration RateSource2009 29.3 bln rubles +43.6% — J’son & Partners2009almost 1 mlnpeople (3 blnrubles)Number of Internet Users End of 2009 59.7 mln people +31.5% —+150% — RustelecomMinistry ofCommunicationsand MassCommunicationsNumber of Internet Users March 2010 23.92 mln people — 39.8% TNSNumber of Domain Names in the .RU Zone Spring 2010 2.6 mlnNumber of Broadband CableInternet Access UsersNumber of New Broadband CableInternet Access UsersBroadband Internet Access Penetration Ratein Russia (of all Internet users)End of 2009In 200914.4 mlnhouseholds13.2 mlnsubscribersDecember 2009 76%Number of Internet Users December 2009 43.3 mln peopleShare of Regular Internet Users (of totalpopulation)Average Daily Audience of News Resourcesin the InternetMarch 2010March 201038% (23% aredaily users)7.37 mln peopleNumber of Social Network Users Spring 2010 25 mln peopleShare of Those Who Trust Electronic Moneyamong Users of the Internet+44% (ascompared withthe beginning of2009)—+36% (marketgrowth in 2009)+40% (ascompared withNovember 2007)+3% (for threeprevious months)+37% (ascompared withMarch 2009)+23% (averageannual increasewith calculationuntil 2014)26.4% (of allhouseholds inRussia)Ministry ofCommunicationsand MassCommunicationsJ’son & Partners— iKS-Consulting—37% (of the adultpopulation inRussia)Public OpinionFoundationPublic OpinionFoundationRussian PublicOpinion ResearchCenter (VCIOM)Rambler Top 100J’son & PartnersSpring 2010 38% +300% — RomirVolume of Online Games Market 2009 $223.5 mln +66% — J’son & PartnersRevenue of Mobile Operators in the MobileInternet SegmentNumber of Mobile Internet Users in 20092009 41.6 bln rubles +63%45.3 mlnsubscribers+45% —ComNewsResearchComNewsResearch9

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesYet another positive change is, despite thesignificant decline of sales, a number of computersin use which increased in Russia by 11.3% to 52.3 mlnunits (according to the Ministry of Communicationsand Mass Communications). When we talk aboutthe development of the IT market, the total numberof PCs in use is more important than the volume ofsales. The replacement of old computers slowed, butthe total number of computer users is growing.It is also noteworthy that, despite the decreaseof the storage systems market by 38.5%, this segmentregistered an annual growth of 17% when measuredin deployed systems capacity (in terabytes) insteadof monetary funds.We see the increase in the share held by IT servicesin the IT market over the last year as a positive change.In particular, we are witnessing the active formationof the Russian market for IT outsourcing. The increaseof the share of services confirms that the IT market isbecoming more developed. It was at the time of thecrisis that foreign service companies (primarily, fromFinland) stepped up their activities on the Russianmarket. For example, in 2009 Tieto Enator acquiredT&T Telecom, a Russian systems integrator, andpromised that this purchase will not be its last in Russia.The software market decreased the same way asthe entire Russian IT market (by 37%, as reports IDC).However, we must note that it grew by 22% in 2008.Therefore, in 2009, theRussian software marketreturned to its 2007 level.The demand for softwarerecovers is slower thanfor PCs but, most likely,in 2010 the capacity ofthe Russian softwaremarket will grow at leastby 15%. This market hasalso experienced positivechanges. In 2009, therevenue of companiesoffering corporatesoftware for lease underthe SaaS model increasedat least by 50% to $3 mln(J’son & Partners). Thecapacity of this segment isstill small given the size ofthe country and the volume of the Russian softwaremarket, but it looks like the SaaS boom in Russiabegan precisely during the crisis.Another positive sign is the decrease in the softwarepiracy rate in 2009. According to Business SoftwareAlliance (BSA) and IDC, a number of installations ofunlicensed software on personal computers in Russiadecreased by 1%. At the beginning of the crisis, itwas expected that savings concerns will lead to anincrease of installed unlicensed software but this didnot happen.The Russian Market for Mobile Communications and Mobile PhonesIndicatorNumber of SIM Cardsregistered in RussiaNumber of purchasedMobile DevicesNumber of purchasedSmartphonesMobile Phones SalesNumber of 3GNetwork SubscribersPeriodMarch 2010In 2009 (in2008)In 2009In 2009 (in2008)End of2009Microsoft showed a positive attitude towardthe prospects of the software market in Russia.At the end of 2009 it opened its first technologicalcenter in Central and Eastern Europe to design anddemonstrate industry solutions developed by thecompany’s partners.Despite the fall of the IT market, the totalcapacity of the 50 most powerful computers in theCIS has grown 2.2 times during six months (fromAutumn 2009). Most of the supercomputers arein Russia and the most powerful supercomputeris situated in Moscow.Given the decrease of the market and theslowdown of IT deployment, we can reasonablyassume that Russia’s position in the ICT global ratinghas become somewhat less important. According toITU, in 2008 Russia ranked 48th among 159 countriesin this rating. The outlook for the ICT market for thecoming years suggests that Russia has a chance toclose this gap and gain ground on the leaders.Unfortunately, there is less information about theRussian IT market in the public domain because ofthe crisis, since not only Russian companies but alsoforeign corporations working in the Russian marketare reluctant to disclose data about the deteriorationof their business activities (even if there are goodreasons for such decline).TotalAmount211 mlnpieces28 mln pieces(for $3.1 bln)1.147 mlnpieces26.2 mlnpieces(for $4.1 bln)3 mlnChange Penetration Source+3%(as comparedwith November2009)148.7%(given that asubscriber mayuse more thanone SIM card)The Impact of the Crisison the IndustryJ'son & Partners-23% (-39%) — Samsung-32%(as comparedwith 2008)— SmartMarketing-27% (-45%) — Euroset+75.4%(for a year)There was no significant change in the assessmentof the crisis by respondents compared with lastyear’s survey. As a year ago, most of the respondentsbelieve that the crisis “slightly worsened the situation”.However, we can note that a number of companiesthat felt the positive impact of the crisis doubled, andthere were one-and-a-half as many more of those whoexperienced no impact at all.—Ministry ofCommunicationsand MassCommunications10

Chapter 1.Position of Russia in the Global Market of Softwareand Software Development ServicesMedium-size companies (with turnover within therange of $0.5 mln to $20 mln) fared the best throughthe crisis, but even among the largest companiesthe extent of the damage was only slightly higher.Companies with turnover less than $0.5 had the mostaffected loss (39% of these companies believe thatthey felt a negative impact of the crisis). We have everyreason to believe that their number could have beeneven higher but the companies that did not make itthrough the crisis were unable to take partin the survey.In fact, the share of respondents fromsmall-size companies has been graduallydecreasing in recent years. This may beexplained by the ongoing consolidation ofresources: the small-size companies eitherwere growing fast and becoming mediumsizeorganizations or disappearing becauseof competition for orders and resourceswith larger corporations. This decrease isespecially large compared with the previousyear (from 39% to 24%). Therefore, wecan assume that the crisis has significantly80%70%60%50%40%30%20%10%0%aggravated the positions of a large numberof the smallest companies.We can assume as well that about100-150 companies with turnover under$0.5 mln went out of business in thecourse of the past year. The arrival of newcompanies hardly made up for that loss.Therefore, a total number of softwaredevelopers most likely have diminished.This does not mean that small-size80%70%60%50%companies did not or do not have any40%39%chance for survival. Almost a quarter of thecompanies with turnover under $0.5 mlndeclared that they either felt no impact ofthe crisis or such impact was positive.The share of the exports in totalrevenue does not lead to a fundamental30%20%10%0%difference in the assessment of the crisis.However, analysis of turnover dynamicsshows that the revenue of companiesfocused primarily on the Russian marketdecreased significantly, while the revenueof companies that have most of theirsales on foreign markets, remained almostunchanged (or even increased slightly). Yetanother important conclusion is that theexport-oriented companies are generallymore adaptable to business fluctuationsand market changes. The diversification80%70%60%50%40%of the order portfolio and market 30%flexibility allows them to adapt quickly24%20%to a new environment. At the same time,the competitive experience in the globalmarkets allows them to cope successfully10%0%with the crisis in Russia.There is a slightly larger number of20%companies that experienced no negative impact of thecrisis outside of Moscow and Saint Petersburg.No obvious correlation is found betweenthe assessment of the impact of the crisis by thecompanies and their business model (software productdevelopment or software development services). Thegrowth of software product exports was to a largeextent by the result of successful activities of theundisputed leader (Kaspersky Lab).23%negative impact18%Crisis Impact Assessment by All Respondents63%51%made situationslightly worse2009 Survey19% 8%13% 4%no impact2009 SurveyCrisis Impact Assessment Depending on Company Turnover10%25%negative impactless than $0.5 million31%negative impact37%57%55%63%made situationslightly worsefrom $0.5 mlnto $4 mln24%21%18%no impact0%from $4 mlnto $20 mlnCrisis Impact Assessment Depending on Company Location6%18%Moscow45%63%53%5%made situationslightly worseSaint Petersburg20% 19%17% 18%no impactSiberiapositive impact3%13%9% 10%positive impactmore than $20 mln13%11%7%5%positive impactOther cities11

post, if a candidate receives multiple offers, she must reject all but one of them, andso each post not taken is filled with the next preferred available candidate.There are two alternative ways to model the switch from national to local competition.One is to view each competition decided either along the measurable dimensionor along the non-measurable one. This changes the link between a candidate’seffort and her probability of winning, and so her payoff and thus her incentive toexert effort is different in the new environment, for given K, the number of posts,N, the number of competitors, and x, the importance of the measurable dimension.To see why, take the simplest case where there are just two posts available.With a national competition, either both posts are assigned according to the measurabledimension or neither is: the former occurs with probability x, the latter withprobability (1 − x). With two separate competitions, on the other hand, all postsare assigned according to the measurable performance with probability x 2 and nonewith probability (1 − x) 2 ; with the residual probability, 2 (1 − x) x, exactly one ofthe posts is assessed on the measurable dimension. The analogy to more posts isimmediate: with K posts, with probability x K all are assigned according to the measurableperformance, with probability Kx K−1 (1 − x) only one is, with probabilityK!2!(K−2)! xK−2 (1 − x) 2 exactly 2 are, and so on, until, with probability (1 − x) K noneis. 9 A different way to model local competitions is to assume that candidates believethat the winners of a competition will be those who score highest on a measure givenby a weighted average of the measurable and non-measurable criteria, with weightsx and (1 − x). Analytically, this would make a national competition with given K,N, and x identical to a local one with the same values: post-reform all appointmentpanels would be making their decision on the basis of the same criterion (the weightedaverage with weights x and (1 − x)). We believe that this modelling option is lesssatisfactory, in view of the pervasive perception that different appointment panels inthe same scientific sector differed widely in their appointment criteria. Its implicationthat academics incentives are not altered by the switch to local competitions wouldalso run counter to one of the motivations of the reform, which was indeed to modifyacademics behaviour: as we show, both theoretically and empirically, the switch to9 The detail noted in footnote 7 can be incorporated by assuming that if K posts (whereK is even) are to be assigned then there are K 2competitions, and the probability of all thembeing assigned according to the measurable performance is x K 2 , the probability of exactly oneof them being assigned according to the measurable performance is 0, the probability of exactlytwo of them being assigned according to the measurable performance is K 2 x K 2 −2 (1 − x),K2exactly 3 is 0, exactly 4 is!2!( K 2 −4 (1 − x) 2 , and so on.2 −2)!xK10

Chapter 2.Volume and Structure of Russian Software ExportsStable trend in solutions and COTS products share growth in overallsoftware export continues this year. The fact that just several largemanufacturers ensure most part of growth in this segment is hardlysurprising. Companies that have both innovative technologies and productsand extensive experience on international market are more competitive,and Transas that celebrates 20-year anniversary this year demonstratesa vivid example.Starting from the very beginning, the company pioneered in introducinginnovations in maritime electronics. For example, Transas was the first torelease the navigation system that could be used onboard. The companybecame market leader in marine navigation and professional simulationsystems by implementing state-of-the-art innovation technologies.I consider emerging markets to be most promising. In the nearest future,applications using Russian global navigation satellite system GLONASScapabilities will be in demand. We are sure that next few years will show transition of mobile technologies,social networks and cloud computing solutions to professional use.Dmitry SemenovManaging Director, Transas TechnologiesIn 2009 Russian software exports grew by 5%to $2,750 mln. As more accurate information wasobtained on enterprises in the industry (greateraccuracy is the result of a number of respondentsincreasing by one-and-a-half times over the figurefor the previous year), this survey information wasused to refine data on 2008 exports. As a result,in 2008 Russian software exports could be moreadequately assessed at the level of $2,600 mln(and not $2,650 mln) while the new estimate forsoftware development services exports stands at$1,400 mln. This correction is well within the marginof error that is estimated at no more than $250 mln(or about 10%).The software development services provided toforeign customers continue to be the main sourceof export revenues in 2009. The volume of exportsof such services did not change and stands at about$1,400 mln. However, since total exports grew by 5%,the share of services slightly decreased (to 51%).In 2009, the share of revenues generated by theproduct-based model of the business continuedto grow. For the first time, the exports of productsand ready-made solutions exceeded the symbolicmilestone of $1 bln and reached $1,030 mln. Theshare of product and solution exports, as a result,exceeded 37% of total exports.There was a significant drop in the export volumesof the services of the Russian development centersof foreign companies. Their exports decreased from$400 mln to $320 mln, and their share in total exportsdropped to 12%.5 percent export growth is not a bad result for theRussian software industry given the negative impact ofthe crisis on the Russian IT market. In previous years,the export revenues of developers grew by 40-50%(compound annual growth rate (CAGR) was at 44.3%for the period from 2002 through 2007). However, thegrowth rate of those years slowed down, as expected,to 21% in 2008 that, to a large extent, was the resultof the crisis. The remaining problems of the industry,primarily, the situation on the labor market, also hada role to play. The universities and private trainingcenters could not cope with market demands, eitherin terms of a number of their graduates, or in terms ofthe quality of the education provided.The uncertainty about the benefits under UnifiedSocial Tax (UST) and their replacement by increasedsocial payments was another important factor. Withthe end of the acute phase of the global economiccrisis and the easing of the problem of personnelshortage during the crisis one can expect an increasein the export growth rate in 2010. However, the viewsof the respondents about further prospects of marketgrowth differ widely.The companies that took part in the survey expectexports to grow by 20% in 2010 and by 18% in 2011.A year ago we made an assumption that economicinstability and uncertainty provide a poor basis forforecasting, and 13 percent growth calculated oncompanies’ forecasts might not be achieved. Wedid not even rule out the slight decrease of exportsin 2009. And that’s what actually happened.It is different now. Demand on the global ITmarket has stabilized, and companies have learnedhow to do business in the period of crisis and postcrisisrecession. Therefore, we can, to a greaterextent, rely on the expectations of the companiesthat took part in the survey. If there are no otherglobal shocks, Russian software exports could benefitfrom the deferred demand and grow by about 20-25% (or slightly higher) in 2010.However, in future the export dynamics willdepend on the labor market that was saturatedbefore the crisis; it received some respite duringthe crisis and returned to the “seller’s market” atthe beginning of 2010. Moreover, Russia is enteringa period of a “demographic pit” resulting from the13

Chapter 2.Volume and Structure of Russian Software Exportsdrives and multifunctional software for intelligentpocket devices), SPIRIT Dsp (embedded softwarefor voice, video and data transmission on variouscommunication channels).These 7 companies provide more than 60% ofthe exports of Russian software and ready-madesolutions. Almost all of them had a slightly largerturnover in the past year. If the company could notavoid a decrease in total revenues, then its exportsusually grew or diminished but to a lesser extent thansales on the Russian market.Several other products and ready-made solutionsexporters are also worthy of mention. They includePROMT (automated translation systems) andSpeech Technology Center (speech recognitionsystems) which have smaller turnover than theaforementioned seven companies but which areleaders in their respective business areas on theglobal market. Bercut (solutions for telecomsoperators) successfully sells its systems in the CISand Europe. 1C (accounting systems, enterprisemanagement systems, games), ASCON (CAD/CAM/CAPP/PDM systems) and DocsVision (documentmanagement systems) also export their products andready-made solutions, but they are mostly focusedon Russian market.Certain, albeit not very large, contributionto exports was made by companies formed in recentyears. Recently, many new companies have appearedin Russia that specialize in the development of Internettechnologies and applications for mobile devices.In 2009, the sales of these solutions grew despite thefinancial crisis. New startups that are emerging in thisarea have good prospects to promote their productson the global market.The evolution of the Russian Global NavigationSystem GLONASS, which had 24 satellites in orbitin May 2010, should stimulate the development ofmany software applications. The demand for theseapplications is primarily in Russia, but they are alreadysold in other CIS countries and will probably findcustomers further afield as well.cuts affected, among others, their Russian R&D units.In most of the cases, a number of researchers anddevelopers were cut by 10-20%.However, there are exceptions as well. Forexample, Nokia launched its cooperation programwith Russian universities and academic researchinstitutions just before the crisis in 2009 andsignificantly expanded its research lab network inRussian universities. Some corporations left intact anumber of personnel of their Russian research anddevelopment centers.The stated plans of foreign companies allow usto assume that in 2010-2011 their R&D investmentsin Russia should substantially increase. However, theimplementation of these plans may be to a largeextent affected by the lack of qualified personnel andparticularly by the increase of social payments.EXPORTS OF SERVICESExports – $1,400 mln. Growth – 0%.In previous years, Russian exports of softwaredevelopment services grew much faster thanthe global market of these services. In 2009, theexports changed to the same extent as the market.According to various sources, the global demand forcustom software decreased, most likely, by severalpercentage points, and given the margin of error, itprobably stands on the level of 2008. We can say thesame about the Russian exports of services.The main customers of Russian service companiesare from such countries and economic segmentswhich are most suffered because of the crisis.We know that the main markets for Russian servicecompanies are in the USA and Western Europewhere the situation in the banking sector and on thefinancial services market is very important. Therefore,a significant proportion of the customers for Russiancustom software developers were right at the centerof global economic shocks.The five-day military conflict between Russia andGeorgia had a short-term negative impact on RussianINTERNATIONALSOFTWARE DEVELOPMENTCENTERSVolume – $320 mln. Fall – 20%.In 2009, for the first time since theRUSSOFT Association started its surveys,there was a decline in investments intointernational development centers andin their cooperation programs withuniversities and academic researchinstitutions. This is not directly relatedwith the situation in Russia. Many majorcorporations responded to diminishingsales during the crisis by makingpersonnel cuts all over the world. These80%70%60%50%40%30%20%10%0%5%Developmentof softwareproductsExport Structure of Service Companies in 2008-20092% 9%11%Developmentand deploymentof softwaresolutions75.5%200872%Developmentof customsoftware4.5% 6%12% 3%IT outsourcing2009Other15

Chapter 2.Volume and Structure of Russian Software Exportsextent of the training of its software-developmentworkforce.In 2010, a number of Russian teams among the10 winners in the ACM (Association of ComputerMachinery) International Collegiate ProgrammingContest were the highest in the last 10 years. This is notonly indicates the potential of the country’s softwaredevelopment industry. However, it does reflect thequality of the education system and existing potentialof the country in the global software market.We believe that it is a safe bet to say that in termsof the quality of its programmer training, Russiaranks among the Top 3 world leaders. Russia is alsoamong the Top 5 world leaders in terms of softwaredevelopment exports (along with the USA, India,China and Brazil). But in terms of software exports,it is not even among the Top 10 largest providers.We are also lagging far behind in softwaredevelopment services. For example, India earns about$10 bln (according to Zinnov Management Consulting,2009) on the exports of software developmentservices alone, which is several times more than theentire software export volume from Russia.It is hard to imagine how we can catch up withIndia in the foreseeable future in the field of customdevelopment. Obviously, we should not even trythis given the enormous difference in the size ofpopulations. However, the total volume of exportsof software development services and softwareproducts from India may well serve as an achievablebenchmark for Russia.According to NASSCOM, in 2009 India registeredthe same export growth rate as in Russia, 5.5%.However, the Indian association takes into accountnot only IT services exports but also businessprocess outsourcing (ВРО). Therefore, we canassume that the software export dynamics in Indiaare even less favorable, which may be the resultof the damage suffered by the image of India asa software development services provider afterpublicized cancellations of services ordered from thecompanies of that country by several large customers.As a result of the cultural barriers in working withIndian companies, international customers are moreoften trying to diversify their providers and considerChina, Brazil and Eastern Europe as alternatives,which contribute to the growth of Russian softwaredevelopment services exports.This applies especially to Western Europeancompanies which, according to Forrester Research,do not demonstrate a particularly high loyalty towardIndian service providers. It is unlikely that demand onEuropean market will grow in 2010, but the Russiandevelopers’ share on it could be increased as a resultof displacement of their main competitor.There are good prospects for the American marketthat, according to analysts, will resume its growthin 2010. Furthermore, there are other promisingmarkets where Russian companies are still poorlyrepresented. The advancement to these marketsprovides a good chance to increase the revenuesof some of the Russian developers. (see Chapter 5).Russian Indicators in the Context of Changes on the Global Market and in Individual CountriesIndicatorConsolidated global IT budgetof companies and organizationsGrowth in2007+2.7%Growth in2008Growth (+)/fall (-)in 2009Forecast ofgrowth (+)/fall (-) in 2010Absolute valuein 2010(forecast)Source-4.6% +3.9% $3.35 trn Gartner— +8.1% — Forrester Research-8%(or -4.5%without takinginto accountfluctuations of USdollar exchangerate)+3.8% $1.48 trn IDCGlobal IT expenditure in all verticalmarkets-5.6% +4.1% $2.4 trn GartnerConsolidated IT expenditure in USA -8.2% +6.6% Forrester ResearchGlobal IT market +6% +8%-8.2% -4.2%IDC, Gartner,Forrester ResearchGlobal IT services market -5.3% +2.9% $786 bln GartnerMarket of IT services provided to Europe 0% IDCMarket of IT services provided to USA -5% Gartner-2.3% +3.1% — IDCGlobal software market +11% +10.3%-2.6% +3.1% $229 bln Gartner— +9.7% — Forrester ResearchRussian software exports +52% +21% +5% +20% $3.29 bln RUSSOFTConsolidated revenue of Indian serviceprovidersGlobal market of outsourcing services +19%+16% +5.5%+14.4%(estimates inSeptember, 2009)up to $373 blnNasscomAssociationXMG Global17

Chapter 3.Major Trends in the RussianSoftware Development Industry

Chapter 3.Major Trends in the Russian Software Development IndustryIn 2009, respondents made more accurateassessments of the trends in the Russian softwaredevelopment industry compared to the previous year.It was difficult to determine the trends and understandwhat may happen next in the middle of the crisis andthe uncertainty about how it would evolve. At thesame time, the average frequency of the mentionedtrends is still lower than in the 2008 survey. Thisconfirms that many companies were uncertain aboutthe future, at least, at the time of the survey.The share of companies that considered exportgrowth to be the main market trend did increasesomewhat and is almost on a par with the share ofthose who thought that the main trend is the growthof the domestic market. However, most of therespondents still favor the growth of the Russianmarket as the main trend.Other trends are mentioned more frequently.The only trend that has lost support among therespondents compared with the previous yearsurvey is “IT outsourcing growth”. Most likely, thisis the result of the change in the composition ofsurvey participants, which are now more focused onthe software development, and also related to thefact that IT outsourcing (IT infrastructure supportDomestic marketgrowthExport growthIT outsourcinggrowth(IT infrastructuresupport)Increase in directsales throughthe InternetMarket consolidation(mergers, acquisitions,creation of holdingcompanies)Increase in productdevelopment(Box/LicensedSoftware)Increasein the developmentand deploymentof software solutions(Services & Solutions)Increase in customsoftwaredevelopmentDeploymentof qualitymanagementsystemsOthersModern Trends in the RussianSoftware Development Industry0% 10% 20% 30% 40% 50% 60% 70% 80%14%10%12%19%21%35%30%34%32%35%32%21%26%18%21%31%27%39%35%38%35%200838%44%49%50%56%61%71%2009 2010outsourcing) did not meet expectations in terms ofgrowing demand on the Russian market.“Increase a volume of custom softwaredevelopment” and “Increase a volume of deploymentof software solutions” were mentioned morefrequently by our respondents than “Increase avolume of product development” which can beexplained by a more active use of the service modelduring the crisis. This is somewhat inconsistent withan increase a volume of the share of products inRussian software exports because software productexports grew primarily through the business activitiesof Kaspersky Lab.Another important trend mentioned by ourrespondents was the “Consolidation of the market”which was indicated by 35% of respondents (and 75% oflarger companies with turnover of more than $20 mln).The Frequency of mentioned trendsin the modern Russian software development industry,by turnover of surveyed companiesDomestic marketgrowthExport growthIT outsourcinggrowth(IT infrastructuresupport)Increase in directsales throughthe InternetMarket consolidation(mergers, acquisitions,creation of holdingcompanies)Increase in productdevelopment(Box/LicensedSoftware)Increasein the developmentand deploymentof software solutions(Services & Solutions)Increase in customsoftwaredevelopmentDeploymentof qualitymanagementsystemsOthers0% 10% 20% 30% 40% 50% 60% 70% 80%0%0%13%11%13%10%13%22%19%18%20%less than $0.5 mln35%30%34%35%41%31%30%32%25%30%28%49%39%40%35%40%30%39%25%from $4 mln to $20 mln57%48%45%43%50%50%63%63%63%75%from $0.5 mln to $4 mlnmore than $20 mln19

Chapter 3.Major Trends in the Russian Software Development IndustryCompanies with a turnover of more than $4 mlnmention “Domestic market growth” and “Exportgrowth” with exactly the same frequency. The growthof the domestic market is more frequently expectedonly by the small-size companies.Quality Management SystemCertificationThe certification of software developmentprocesses is a priority for only a small part of thecompanies with turnover under $4 mln. Largercompanies have successfully conducted certificationin previous years. The only exception is one companywith turnover of more than $20 mln that already hasCMMI and ISO certificates. It looks like this companyplans to be certified for compliance with a higherquality standard.The share of companies that arecertified for compliance with at leastone standard (CMM, CMMI or ISO) hasslightly decreased in the past year. Thisis perhaps the result of a larger numberof surveyed companies with turnoverunder $4 mln. Most such companieshave not yet certified their qualitymanagement systems.The share of large certifiedcompanies increased (with turnover ofmore than $20 mln – from 78% to 100%,and with turnover of $4-20 mln –from 65% to 67%). This increase is notbig and it does not necessarily meanthat there is any trend. Such a smallchange would allow the tracking onthe trend only by analyzing the data ofsurveys for several years.In the past three years, we haveobserved a decrease in the shareof companies that have at least onecertificate. Given the substantial growthin a number of respondents, thismeans that certification was not a massphenomenon.Still, every year a significant shareof surveyed companies declarestheir intention to obtain a certificate.For example, 16% of respondentsmentioned their intention to passcertification in the next 2 years (or 27%of those who have no certificate). Itlooks like intentions do not matchavailable funding.In May 2009, the Software EngineeringInstitute (SEI) of Carnegie MellonUniversity, the developer of the CMMIstandard, authorized an expert from theRussian company Inspirex Consulting asa CMMI Lead Appraiser. Earlier, there100%80%60%40%20%0%80%70%60%50%40%30%20%10%0%92%80%70%60%50%40%64.5%Share of Companies Certifiedto Comply with International Standards61%30%30.7% 31%20%10%2.7%7%4.4%7%0%Not certified ISOCMMCMMI2009 Survey2010 Survey* − more than 100% in total because some companies were certifiedfor compliance with more than one standardShare of Companies Certified to Comply with International Standards,by turnover of surveyed companies59%33%0%Not certified52%8%30%ISO48%less than $0.5 mln100%from $4 mln to $20 mln* − share of those who do not have any certificateMoscow25%3%7%10%5%0%10%CMMCMMIfrom $0.5 mln to $4 mlnmore than $20 mln50%14%37%14%0%Intend to becertified in thenext 2 years*Share of Companies Certified to Comply with International Standards(by the location of surveyed companies)62%75%67%Not certified40%31%ISO26%Saint Petersburg12%8%3%6% 7% 6% 5% 6% 6%CMMSiberiaCMMIOther cities27%15%58%23%Intend to becertified in thenext 2 years20

Chapter 3.Major Trends in the Russian Software Development IndustryAssessment of Government Support for Certificationof Compliance with International StandardsGoodSatisfactoryBad40%4%56%Assessment of Government Supportfor Certification of Compliance with International Standards,by the location of surveyed companies80%70%60%50%40%30%20%10%0%58%38%Moscow53%Bad44%4% 3%Saint Petersburg77%15%SiberiaSatisfactory8%50%47%Good3%Other citiesthat intend to be certified in the next 2 years comesalso from that region.Most of the respondents find the governmentsupport for certification of compliance withinternational standards unsatisfactory. Since in Siberiathere is the highest need in such support, the Siberiancompanies make most of the negative assessments(77% assess it as “bad” against 56% of all surveyedcompanies). They are mostly dissatisfied with the waythis support is provided (it looks like there is no suchsupport at all in Siberia).Attracting InvestmentsWe included this section in our report becausethere was a similar new question in our survey.For 2009, only 8% of our respondents confirmed thatthere were new investments. But 20% declared theirintentions to attract investments in 2010 and 2011.About 5% of all respondents have not yet decidedwhether they will seek new investments in 2010-2011.Companies with turnover of $0.5-4 mln are themost active in attracting (or planning to attract)investment. In 2009, all large companies managed towork without funds from outside sources, but 20%of such companies need to attract investments in thenext 2 years.The Siberian companies have the highestrequirement for investments (13% in 2009 and 31% in2010-2011) while the lowest level of requirementdemonstrated Saint Petersburg (2% in 2009).were no such appraisers in Russia. The availability of anauthorized expert allows the companies from Russia,Belarus and Ukraine to reduce significantly the costs ofthe expensive certification procedure for compliancewith CMMI. Such an opportunity has probably led tothe increase in a number of companies certified forthis standard from 4.4% to 7%. However, in mostcases, the certification for compliance with CMMI wasacquired by companies that already have CMM and ISOcertificates (or even CMMI certificates of a lower level).Most of the companies without any certificate ofcompliance with the quality management systems arelocated in Siberia. The largest share of the companiesShare of Companies that have attracted(or intend to attract) Investmentsin 2009-2011in 2009in 2010in 201120%8%20%21

Chapter 4.Geographical Distributionand Key Vertical Markets of the RussianSoftware Development Industry

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development IndustryMAIN GEOGRAPHICAL MARKETSOne of the major trends in recent years is thesteady decline in the importance of the USA andCanada market for Russian software developers.Only 38% of respondents mentioned their presenceon this market in 2009. (a year ago it was 52%).The share of companies that consider the USA andCanada as their key market decreased to a lesserextent – from 28% to 26%. We should remember thatin 2007 it was 43% and 52% in 2006. Thus, the shareof respondents that consider USA and Canada as theirkey market decreased twofold in three years.This change was primarily the result of responsesby small-size companies. There is still a great interesttoward the US market from the largest companies:in 2009, 75% of companies with turnover of morethan $20 mln were selling their software or workingon orders from American and Canadian customers.63% of the largest Russian software exportersconsider it as their key market. All other markets(excluding Germany) are mentioned with significantlylower frequency.Since the respondents with turnover of more than$20 mln account for about 75% of the exports of allsurveyed companies, we can conclude that the salesof software and services to the USA and Canadadecreased in three years to a much lesser extent thantwofold. Any large-scale decrease in the presence ofsmall-size Russian companies in the USA and Canadacould reduce Russian exports to North America by nomore than 10-15%. Still, the general decrease in theimportance of this market for the industry is visible.When we compare the results of our polls fordifferent years, we find that our respondents seediminishing opportunities for realizing particularprojects in the USA. This applies especially tosmall-size companies. In many cases this is a keymarket. However, any serious work on it requireslarge investment in the local marketing and salesinfrastructure. Otherwise, it should be abandoned.In 2009, the sales in the USA and Canada probablydid not exceed 20% of the Russian software andsoftware development exports, which is differsconsiderably from the software development industryin India where this number is much higher. Accordingto Everest Research Institute, 60% of export revenuesof Indian outsourcing companies were derivedfrom the USA and another 15% from the UK. TheRussian industry does not depend that much on anysingle market while there is growing interest of thecompanies toward the markets that for the momentare not their main destinations.First of all, a growing number of companiesis entering the markets of former Soviet republics.For example, 41% of respondents mentioned theirpresence on the Ukrainian market. On that score,Ukraine is already ahead of the USA and Canada.There is also growing interest in other CIS countries.Our survey confirms the media reports about themarketing activities of Russian software developersbeing stepped-up in new markets. In February2010, Softline, a software distributor, announcedthe opening of its office in Egypt. This companyis opening the door to the Middle East and NorthAfrican market for Russian software developers.In October 2009, T-Platforms, a Russian company,announced that it had executed a partnershipagreement with Digital Waves, an Indian company,which becomes its exclusive authorized representativein India and will sell and install Russian softwareRussian Companies on Global Markets*RussiaUSA and CanadaUkraineOther countriesof Western EuropeOther countriesof former USSRBelarusGermanyScandinaviaSouth East AsiaAustralia, Africa,South America0% 20% 40% 60% 80% 100%12%17%14%18%18%19%19%7%26%23%25%24%30%33%34%31%28%28%25%38%35%35%32%41%39%55%55%52%87%89%2007 2008 2009*Change in 2009:growth fall unchanged* − key markets or markets for particular projects23

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development Industrysolutions for high performance computing on theIndian market.In June 2010, Playnatic Entertainment announcedthat it has signed, for the first time in history, a Russian-Iranian agreement in the field of IT technologieswith Sina Data Co. This event took place at theIranian Embassy in Moscow with the participation ofthe Iranian Ambassador in Russia. The Agreementimplies a comprehensive partnership where PlaynaticEntertainment will represent games developers fromthe CIS on the Iranian market through Sina Data Co.At the end of 2009, Kaspersky Lab announced theopening of its first office in Africa. It is based in SouthAfrica and will coordinate the company’s activitiesin other countries of this continent.RussiaUSA and CanadaUkraineOther countriesof Western EuropeOther countriesof former USSRBelarusGermanyScandinaviaSouth East AsiaAustralia, Africa,South AmericaKey markets0% 10% 20% 30% 40% 50% 60% 70% 80%10%6%11%7%11%8%6%12%3%2%15%13%9%10%6%12%12%11%6%13%8%9%3%28%26%24%42%43%71%72%2007 2008 2009Change in 2009:growth fall unchangedIn April 2009, several software developmentcompanies (ALT Linux, ASCON, ABBYY, Digital Designand PROMT) along with a delegation from the Russiangovernment visited Caracas, the capital of Venezuela,to take part in the “Week of Russian IT Technologies”.ACS Systems, a representative of Kaspersky Lab inVenezuela, also took part in this event. The Russiancompanies have not report about any successesin Venezuela so far but they are making their firststeps to gain ground on the Latin American market.We also should mention the entry of ExigenServices to the Chinese market. The company hasopened its development center in China that willwork partly on orders from the local market.Parallels, a provider of virtualization andautomation solutions, announced about a year agothat it intends to reinforce its position on the cloudcomputing market in the Asia-Pacific region.Nevertheless, for most Russian companies themarket of South East Asia is still a distant andunknown destination. The same applies to themarkets of Africa and the Middle East. However,according to Gartner forecasts, it is precisely in SouthEast Asia, Africa and the Middle East that much of theglobal IT expenditure growth is expected to happenin 2010. The analysts of other research companiesbelieve that in the next 10 years the outsourcingservices market will experience the highest rate ofgrowth primarily in Asia.Russian companies continue to focus mostly onEuropean (including former Soviet Republics) andNorth American markets, even though, accordingto the analysts, a significant rise in demand onthese markets can be expected only in relativelysmall countries of Eastern Europe. There might beincreased sales and a larger market share in WesternEurope, but the highest growth potential is in SouthEast Asia, the Middle East and Latin America.In the past two years, companies have begun tomention more markets where they have implementedparticular projects (there are more such markets percompany). At the same time, a number of key marketsper respondent has diminished. This can be partiallyexplained by the fact that among respondentsa large number of companies focused primarily onthe Russian market. Usually, they consider Russia astheir only key market and enter other markets only toimplement specific projects.Furthermore, some of the surveyed companiesdo not consider certain locations as their keymarkets because of the crisis. They had to seek newdestinations which could not have become their keymarkets in the course of only one or two years.It is remarkable that more than half of the largecompanies (with turnover of more than $20 mln) arealready working on the markets of South East Asia,Australia, Africa and South America. However, noneof these companies is considering such destinationsas their key market.24

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development IndustryGiven the new structure of our respondents(there are more companies in the survey focused onthe Russian market); we find it necessary to make acorrection about the growing interest toward themarkets in Russia and the former Soviet Union. Mostlikely, this growing interest is not as significant asimplied by the data in the table “Russian Companieson Global Markets”. At the same time, 72% of thecompanies that derive 50% of their consolidatedrevenue from exports were selling their productsand services on the Russian market. Only 19% ofsuch companies consider Russia as their key market.However, its importance for exporters grew inrecent years. Three years ago, only about 50% ofrespondents mentioned their presence on this market.In 2009, companies from Saint Petersburg (asin 2008) have born the larger extent than othersfocused on European markets. About a third of thecompanies from Saint Petersburg are present on theneighboring market of Northern Europe (primarilyin Finland).The companies from Moscow (primarily, small-sizeand medium-size) more than others mention Ukraine,Belarus and other countries of the former USSR astheir priority markets.The markets of South East Asia, Australia, Africaand South America were most frequently mentionedby the companies located in Siberia.Frequency of Mentioned Vertical Markets in 2007-2010(% of all respondents)InformationTechnologyBanking &FinancialServicesTelecomIndustriesHospitality,Travel &Transportation0% 20% 40% 60% 80% 100%24%28%29%26%36%33%31%29%34%31%35%36%34%31%28%40%44%69%71%89%88%VERTICAL MARKETSGovernment25%38%According to the survey, every respondentoperates on average in 3 vertical markets. This figurehas somewhat diminished in the last 2 years. One ofthe reasons is the increased share of companies withturnover under $4 mln among the participants of thesurvey. Such companies are usually focusing on fewervertical markets (2-3), while the larger companiesfocus on average on 4-6 markets.Yet another reason is the impact of the economiccrisis. The companies had to focus their efforts topromote products and services on fewer verticalmarkets (which suffered less from the crisis and wherethey had stronger expertise).The importance of different vertical markets forRussian software exporters in general matches thedistribution of global IT expenditure for these markets(such calculations were made by Gartner). The fourmarkets most frequently mentioned by the Russiansoftware developers are also the largest accordingto Gartner. These are Banking & Financial Services,Telecom, Industries and Government. Gartner does notprovide any data on such a vertical market as InformationTechnology. Therefore, we did not take it into accountwhen comparing these two research reports.According to Gartner’s forecast, in 2010 there willbe an increase in IT expenditure in all vertical markets.In general, it will rise by 4.1% to $2.4 trn. In 2009, thisexpenditure decreased by 5.6%.Power Supply,Gas & OilHealthcare &PharmaceuticalsRetail &DistributionScience &ResearchGambling &Entertainment11%12%18%19%18%24%24%24%21%19%23%23%20%24%28%27%29%35%32%38%36%Number of Vertical Markets per respondent:3,7 4,2 3,3 3,12007 Survey 2008 Survey 2009 Survey 2010 Survey25

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development IndustryForecast of Global IT Expenditure by Economic Sectors in 2010Economic SectorExpenditure,$ mlnShare of VerticalMarketGEOGRAPHICAL DISTRIBUTION OFMARKETING AND SALES OFFICESOF RUSSIAN COMPANIESThe share of respondents that mentioned theirsales offices in other countries and other cities grewfrom 28% to 41% (foreign offices grew from 15%to 27%). The respondents began to mention muchmore frequently their sales offices in Russia and formerSoviet republics. In that case, the more frequentreferences to Russia and former Soviet republicsare related with an increased number of surveyedcompanies focused on the markets in Russia and CIScountries. In addition, the share of companies withrepresentative offices further afield remained almostunchanged compared with the previous survey.Although 10.5% of the respondents had plans fornew representative offices in 2009-2010 and in lastyear the exporters were opening new representativeoffices only in isolated cases.In Russia, companies usually have theirrepresentative offices in Moscow (mentioned23 times) and in Saint Petersburg (mentioned11 times). Other cities are mentioned by no more thanExpectedgrowth (+)/fall (-) in 2010Banking & Financial Services 554638 24% +4%Telecom and Media 394171 17% +4.4%Healthcare 88626 4% +2.8%Government 433177 19% +5.4%Retail & Distribution 233279 10% +4.5%Industries 428856 19% +3.1%Transportation 106406 5% +2.9%Education* 63992 3% +4.1%Source: Calculated by RUSSOFT with data provided by Gartner3 companies (usually, by one or two).In Europe, Russian companies havemost of their representative offices inGermany (7), UK (5) and in Sweden (4).France and Finland each host 2 salesoffices. There are also representativeoffices in Switzerland, Denmark andthe Czech Republic. One companymentioned Scandinavia withoutspecifying the country (most likely, thisoffice in Sweden).5.6% of surveyed companies intentto open their first representative officein another city or country in 2010-2011.Most frequently, the respondents wantto open a sales office in Russia (6%) orin Western Europe (6%).Companies with turnover under $0.5 mln aremost likely to declare their intention to openin Russiaabroadin Belarusin Ukrainein otherCIS countriesin countriesof Western EuropeSales Offices (share of respondentswho named a country or region)0% 10% 20% 30% 40% 50%6%0%0%6%0%1%2%1%1%6%8%11%11.5%11%15%17%27%29%100%Exporters with Sales Offices in other Countries or Citiesin countriesof Central andEastern Europe0%2.5%3%80%60%67%88%in USAand Canada3%12%11%40%45%47% 48%in South East Asia2%3%20%0%18%4.5%less than$0.5 mln8%30%from $0.5 mlnto $4 mln5% 5%from $4 mlnto $20 mln0%more than$20 mlnby all countriesand regions1%5.6%28%41%2009 Survey2010 SurveyIntend to open their first sales office in 2010-20112009 Survey2010 SurveyIntend to open their firstrepresentative office in 2010-201126

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development Industrya representative office. However, in practice intentionsof such companies in most cases are not realized.Almost all companies with turnover of more than$20 mln have at least one representative office inother countries. If there is none, they do not considerit necessary to open such offices in the next 2 years.GEOGRAPHICAL DISTRIBUTIONOF DEVELOPMENT CENTERSThe share of companies with remote developmentcenters did not change compared with the previousyear. 32% of surveyed companies have a productionfacility in another country or city (8% have thedevelopment centers in more than a country).Sometimes, this development center also functionsas their sales office. However, in general, thedevelopment is consolidated in one country (withlower cost of resources) while the sales office locatesin another country (in the main market).8.1% of the surveyed companies have more thanone remote development center.6% of surveyed companies intend to open theirfirst remote development center in 2010-2011.Despite the widespread opinion that the environmentfor software development in Russia is not among thebest (in comparison, for example, with Belarus andUkraine), most of the new development centers areplanned to be opened in Russia.As for the Russian regions, the head offices andremote development centers of surveyed companiescan be found in 50 Russian cities. Most of the remotedeveloper teams, outside Moscow, the MoscowRegion and Saint Petersburg, are based in Novosibirsk,Voronezh and Rostov-on-Don. Nizhny Novgorodis in the Top 5 in terms of a number of developers.However, in that city most of the developers work inthe three largest companies, which poses an obstaclefor companies from other cities opening newdevelopment centers.According to the plans of surveyed companies,in 2010-2011 years should be opened some newdevelopment centers in Dubna in the Moscow Region,in Arkhangelsk, Vladivostok, Perm and Timoshevsk.In Belarus, the most convenient locations foropening development centers are Minsk (mentioned7 times), Mogilev (4), Vitebsk (2), Gomel (2),Grodno (2), as well as Brest (1) and Novopolotsk (1).In Ukraine: Kiev (6), Kharkov (2),Dnepropetrovsk (2), Vinnitsa (2), Kherson (1), Lvov (1)and Odessa (1). In other CIS countries, there is onedevelopment center in Karaganda (Kazakhstan). In2010, development centers will be probably openedin Azerbaijan and Lithuania (Vilnius) during 2011, sucha center will be opened in Uzbekistan.80%70%60%50%40%30%20%10%0%13%Exporters with Remote Development Centers8%less than$0.5 mln5%29%21%Somewhere8%from $0.5 mlnto $4 mln62% 63%52%In Russia0%from $4 mlto $20 mlnIntend to open their first remotedevelopment center in 2010-201150%13%more than$20 mlnAvailability of Remote Development Centers(share of respondents that mentioned a country or a region)in Russiain Belarusin Ukrainein otherCIS countriesin countriesof Western Europein countriesof Central andEastern Europein USAand Canadain South East Asia0% 5% 10% 15% 20% 25%3%0%4%4%1%4%4%1%4%4%1%3.5%3%1%1%1%2%2%5%0.5%6%6%2009 Survey19%2010 SurveyIntend to open their first remotedevelopment center in 2010-201123%27

Chapter 4.Geographical Distribution and Key Vertical Marketsof the Russian Software Development IndustryRussian Cities (by number of head offices and remote developmentcenters of companies)1 Moscow 672 Saint Petersburg 493 Moscow Region 102 Novosibirsk 84-5 Voronezh 74-5 Rostov-on-Don 76 Tomsk 67 Yekaterinburg 58-9 Veliky Novgorod 48-9 Kazan 410-12 Nizhniy Novgorod 310-12 Izhevsk 310-12 Omsk 313-20 Belgorod 213-20 Vladimir 213-20 Ivanovo 213-20 Kaliningrad 213-20 Krasnodar 213-20 Perm 213-20 Samara 213-20 Saratov 228

Chapter 5.Human Resourcesand Labor Market

Chapter 5.Human Resources and Labor MarketAt the end of 2009 and in the first half of 2010,the Russian labor market experienced some distinctchanges. This would inevitably affect the conclusionsof our report. So, in addition to the software-companysurvey conducted in February 2010, we also analyzedthe labor market with data provided by recruitmentagencies, which track the labor demand, supply andaverage salary in the industry almost on a monthlybasis. Such a consolidated pool of data allowed us toidentify the trends and changes on the labor marketnot only for the past year but also for the first halfof 2010.By early summer of 2010, the main indicators ofthe labor market reached their pre-crisis levels. First,in the end of 2009, we witnessed the recovery innumber of job openings for software programmers,and by May 2010 there was also a recovery of salaries.Along with such recovery, the softwaredevelopment companies began to experience severeproblems with recruitment and training again, almoston a similar scale as in the start of 2008.In 2009, there were no radical positive shifts in thetraining of software developers by the universities.According to the poll conducted in February 2010, anumber of companies satisfied with the situation on thelabor market and education system became significantlyhigher than in 2008 (see chapter 4). However, this wasonly the result of a temporary drop in demand formass recruitment and a temporary opportunity to hireformer employees of IT divisions laid off during thecrisis by enterprises of various industries. The tensionsin the labor market were reduced temporarily and onlyas a result of the global crisis.Moreover, we have every reason to believe thatthere were some negative changes in personneltraining by the universities. If 2 years ago somemanagers of software developers were saying thatthe quality of education is getting worse while othersdid not agree with that, by Spring 2010 the declinein the level of graduates and students training (whobegin working in companies before their graduation)became obvious almost for all our respondents.Of course, we are talking about the average levelof training in the universities. In some institutions thequality of training might have increased in recentyears but these exceptions are not able to reverse thegeneral trend.We should note that in the last decade a numberof professional software developers in Russia becamesignificantly higher. This was possible because theoverseas drain of programmers practically stopped(a number of Russian programmers leaving thecountry was offset by those who either returned toRussia or come from former Soviet republics to lookfor a job in Russian companies).According to Microsoft, a number of programmersin Russia grew from 212,000 in 2003 to 350,000by early 2010. Thus, every year there were about20,000 new professional programmers in Russia.The Microsoft estimates are based on a number oflicenses for software development tools, databasesand other programs usually used by programmersthat the company purchased to its Russian customers.These estimates are in accordance with theinformation provided by the Russian Ministryof Communication and Mass Communications.According to this data, in 2008 Russian universitiestrained 19,000 IT specialists, if such designationimplies that they all were programmers. Accordingto Information and Computer Technologies IndustryAssociation (APKIT), every year universities trainat least 60,000 IT specialists.We should also take into account that theavailability of new programmers on the Russian labormarket was the result of migration from formerSoviet republics (primarily, from Belarus and Ukraine).However, in the past 2 years the influx of foreignspecialists somewhat decreased and this processcould not already have any significant impact onthe Russian labor market.APKIT data allows the calculation of an overallnumber of IT specialists working in Russia, and thisfigure stands at not less than 1 mln people. Theseare not only the employees of IT companies, butalso specialists of IT divisions in various enterprises,organizations and agencies.The Ministry of Communication and MassCommunications puts a number of IT employeesin Russia at 302,000 people. Along with theemployees of communications enterprises and masscommunications enterprises, they constitute 1.52%of the total Russian workforce. The Ministry believesthat this share is much lower than in many Europeancountries where it exceeds 3%.Another government agency (the Russian Ministryof Education and Science) provided its own data aboutIT employees and put this figure at 370,000 people.RUSSOFT experts estimate that a numberof specialized employees of software developmentcompanies stands at approximately 100,000 peopleincluding 50-55,000 specialists who develop customsoftware and software products for export.Before the crisis, about half of the staffingrequirements for software development exporterswere met by university graduates. Only a smallportion of graduates was able to work for softwaredevelopers focused on foreign markets (no morethan 20%). Since the beginning of the global crisis,exporters barely felt the lack of qualified personnel.The tensions in the labor market resurfaced towardthe summer of 2010, when a number of job openingsfor programmers in recruitment agencies exceededa number of job applications.However, it is still difficult to conclude to whatextent the labor market will be able to meet the needsof growth in software development exports industry.In 2010, the exporters intend to increase their staff by18%. The large and plenty of medium-size companieswant to recruit new employees in their foreigndevelopment centers outside of Russia. This is the30

Chapter 5.Human Resources and Labor Marketresult of the increasing cost of software developmentin Russia in recent years as well as the implementationof social payments instead of unified social tax [UST]along with cancellation of tax benefits for exporters(which were in place in 2008-2009) and the generalincrease of social charges (from 14% of the payrollto 26% in 2010 and up to 34% in 2011).At the same time, according to Microsoft, Russiahas an enormous potential in terms of softwaredevelopment. The research report published by thatcorporation in the Spring 2010 confirms that about850,000 Russians have some programming skills. Thisnumber includes secondary school and universitystudents who already have required knowledge andskills but still never earned their living by softwaredevelopment.In addition to the deteriorating quality ofeducation, yet another challenge that may havea negative impact on the labor market is the decline inthe occupational prestige of programming. The pollconducted by the Russian Public Opinion ResearchCenter (VCIOM) revealed that 6% of Russians wanttheir children to become programmers. Two yearsago this figure stood at 7%. It’s too early to draw anyconclusions. However, it looks like Russia is followingthe trend of other economically developed nationswhere the prestige of technical occupations hassignificantly declined in the last 10-20 years.STAFF RECRUITMENT ANDPERSONNEL CUTSIn 2009, the surveyed exporters significantlylowered their activities on the labor market comparedwith the previous year. 23% of the companies did notrecruit any new staff within the year. This indicatorwas at 9% in 2009 and 5% in 2008.The number of companies that did not recruitany new staff increased not only as a result of thecrisis. Rising costs of software development in Russiacaused by the cancellation of UST benefits and theintroduction of social payments.In 2009, most of the companies (62%) dismissedat least one employee. However, this was usuallyrelated to personnel rotation rather than to anymass layoffs. Only 5% of surveyed companies havesignificantly (by more than 30%) reduced their staff.We can add to this 5%-10% of the companies thatwent out of business.As a year ago, the companies deriving most oftheir revenues from exports were the most activeon the labor market. Only 12% of such companiesdid not recruit any new staff in 2009 (a year ago thefigure was 3%). The similar indicators of developersfocused on the Russian market stand at 27% and 10%,respectively.The activities of companies on the labor marketdirectly depend on their turnover volume. Thereis not a single company with turnover of more than$20 mln that did not recruit new staff in 2009.Companies most frequently did not want to recruitnew staff outside of Moscow (in the capital therewas 23% of such companies) and Saint Petersburg(19%). 31% of the companies in Siberia did not recruitnew staff while in other cities this share stood at24%. In Moscow and Saint Petersburg more than inother cities, there is a higher concentration of largercompanies that were continuing to recruit during thecrisis. This can provide a possible explanation for theactivity gap on the labor market.50%40%30%20%10%0%Companies that did not recruit staff in 2008-20090% 0% 0%more than$20 mln14%from $4 mlnto $20 mln200810%18%from $0.5 mlnto $4 mln200914%STAFF TRAINING. UNIVERSITIES46%less than$0.5 mlnThe impact of the crisis has reduced the share ofcompanies engaged in some form of cooperationwith universities. However, this decline was not as bigas a year ago. Furthermore, it was partly the result ofan increased number of respondents from companieswith turnover under $4 mln which do not cooperatewith the universities as actively as larger companies.All large companies continued their work with theinstitutions of higher learning. Some were engagedin their own training programs. For example, ExigenServices opened IT College in Saint Petersburg whereit provides training for С# developers and testers.The employment of university graduates droppedsignificantly compared with 2008. By early 2010,100%80%60%40%20%0%Cooperation between Companies and Universities82%41.5% 41%Studentinternships73%34%23%Employmentof graduates48%23.6%21%Training coursesfor employees14%48%42%2008 Survey 2009 Survey 2010 Survey1%OtherNo cooperation31

Chapter 5.Human Resources and Labor MarketCooperation between Companies and Universities,by turnover of surveyed companies0% 20% 40% 60% 80% 100%StudentsinternshipEmploymentof graduatesTraining coursesfor employeesOther17%15%12%16%18%5%29%34%33%33%38%43%63%67%75%88%We compiled the ratings of Russian universitiesbased on response data about the universities whosegraduates are most sought after by IT companies (therespondents were asked to select as many universitiesas they wanted).Significant differences in the university ratingscompared with a previous year confirm the provisionalnature of the ranking.Since the ranking depends to a large extent ona number of companies representing a particular city,the universities from Moscow and Saint Petersburglead the ratings. It would be more accurateto compare universities located in the same city.However, a sufficient selection for such comparisonis available only for Moscow and Saint Petersburg.Even taking into account above comments,the universities’ rating reflects the level of trainingfor programmers, particularly, given the rangeattributed to a specific institution in this rating (forexample, between 1st and 5th place, or between6th and 10th place). It is remarkable that the Top10 list remained almost unchanged compared withthe previous year. There are only two newcomers inthe Top 10. Novosibirsk State Technical Universityleft the list; it did not even make it into the rating(this is most likely the result of lower participation ofNo cooperationmore than$20 mln0%19%from $4 mlnto $20 mlnrecent graduates constituted 3% of the surveyedcompanies’ staff. A year ago, this figure was muchhigher (10%).Traditionally, we were observing the largest shareof recent graduates among the employees of smallsizecompanies. At the same time, companies withturnover of more than $4 mln hired52%62%from $0.5 mlnto $4 mlnalmost 60% of the graduates.The graduates can more easily findemployment in companies focused onthe Russian rather than on externalmarkets. This is a result of higherprofessional training requirements ofthe exporters.39% of the surveyed companiesdid not hire any graduates in 2009.The Siberian companies werethe most active in recruiting recentgraduates (the share of graduates intheir staff reaches 21%). This couldbe partially explained by a relativelylimited selection of companies fromthat region, represented in our surveymostly by small-size organizations.less than$0.5 mlnWeighted Average Share of Graduates in the Staff, by turnover of surveyed companies60%50%40%30%20%10%0%60%50%40%30%20%10%0%2%5%more than$20 mln2008 200925% 24%15%Weighted Average Share of Graduates in the Staff(by the location of surveyed companies)37%3% 3%Moscow4%from $4 mlnto $20 mln52%Saint Petersburgshare of new graduates in the staff19%6%21%from $0.5 mlnto $4 mlnSiberiadid not hire new graduates38%31%13%5%8%less than$0.5 mln33%Other cities54%share of companies that did not hire new graduates in 200932

Chapter 5.Human Resources and Labor MarketRating of the Universities whose Graduates are most sought after by IT CompaniesRank University Votes1 Moscow State Technical University (5-6) 232 Saint Petersburg State University of Information Technologies, Mechanics and Optics (4) 223 Moscow State University (8-9) 204 Saint Petersburg State University (1-3) 195 Moscow Institute of Physics and Technology (13-15) 136 Saint Petersburg State Polytechnic University (1-3) 117 Saint Petersburg State Electrotechnical University (1-3) 108 Saint Petersburg State University of Aerospace Instrumentation (16-25) 79 Novosibirsk State University (7-3) 510-13 Ural State University (10-12) 410-13 Saint-Petersburg State Institute of Technology (Technical University) 410-13 Voronezh State University 410-13 Moscow Aviation Institute (State University of Aerospace Technologies) 414-19 Novgorod State University 314-19 Moscow Engineering Physics Institute (10-12) 314-19 Southern Federal University 314-19 Tomsk State University 314-19 Perm State University 314-19 Tomsk State Polytechnic University 320-31 Saint-Petersburg State University of Telecommunications (10-12) 220-31 Yaroslavl State University 220-31 Voronezh State Technical University 220-31 Ural State Technical University (8-9) 220-31 Ivanovo State Power University 220-31 Moscow State Institute of Radio-Engineering Electronics and Automation 220-31 Baltic State Technical University (VOENMEKh) 220-31 Moscow Engineering and Technical Institute 220-31 Perm State Technical University 220-31 Tomsk State University of Control Systems and Radioelectronics 220-31 South Urals State University 220-31 Samara State University 2* – figures in parentheses refer to previous year rankingcompanies from Novosibirsk compared in the surveywith a previous year). Petrozavodsk State University,the students of which this year took for the third timeprizes in the world programming contest, also failedto make it into the rating. Naturally, it fully deservesto be in the rating of leading universities. However,the representation of Petrozavodsk among therespondents of this survey was even lower than therepresentation of Novosibirsk.Overall, the surveyed companies mentioned85 universities and other higher learning institutionswhose graduates are most sought after byIT companies of the region. 54 institutions werementioned only once and did not make it intothe rating.Another rating of the universities based on theperformance of their teams at the ACM InternationalCollegiate Programming Contest provides additionalinformation about the quality of training for softwaredevelopers.Of 11 Russian universities that were, since 1999,winning the prizes of this prestigious tournament, ourrating does not include Petrozavodsk State University,Saratov State University, Izhevsk State University, AltaiState University, Ufa State University of Aviation andUral State University. This merely reflects the fact thatthere are no significant export-oriented companies inthese cities.The outstanding performance of the studentson international programming contests proves thatRussian universities can provide high-quality training.Leading global corporations regularly organize similarcontests and, every time, Russian programmers rankamong the champions and winners.These champions and winners of programmingcontests are not always getting similarly outstandingresults in their jobs in private companies orgovernment agencies. However, they are usuallyable to perform the most complex tasks in their jobswhich are confirmed by the fact that many formerRussian champions and winners of ACM contestshave created successful software developers or areleading employees of such companies (DevExperts,SPbSoftware, Yota).Unfortunately, the poor infrastructure hampersthe advancement of software development exportsin many Russian cities that have the opportunities totrain qualified specialists. Many talented graduates33

Chapter 5.Human Resources and Labor Marketof provincial universities move abroad or to thelarger Russian cities (primarily, to Moscow and SaintPetersburg), even though there are many graduateswho do not want to leave their native towns.The vast geographical distribution of theuniversities whose students won prizes indicatesthe overall level of training of specialists in Russia.Some of the graduates who did not make it to thecontest finals are almost as good as the championsand winners. They just did not have enough luck toachieve the same success.A whole galaxy of Russian university teams, whichhave entered into the world’s elite, was formedover 11 years of their participation in ACM contests.Since 1999, 11 Russian universities have won prizesin these contests. Three among them became theoutright champions in different years. These resultsare much higher than in any other country. Overall,Russia won the title of champion in these contests6 times over the last 11 years.In the finals of the last team programming contestamong the students that took place in February 2010in China (Harbin), Moscow State University (MUST)won the outright second place and a gold medalalong with Shanghai University (China), Kiev University(Ukraine) and Taiwan University. Overall, 5 teamsfrom Russia were among the 13 winners. In additionto MUST, these are Petrozavodsk State University,Saratov State University, Saint-Petersburg StateUniversity and Ural State University.If we consider the results of the 2009/2010contests, the universities of the following 13 Russiancities are capable of training highly qualifiedprogrammers: Moscow, Saint Petersburg, Saratov,Perm, Izhevsk, Stavropol, Yekaterinburg, Novosibirsk,Ufa, Barnaul, Orel, Chelyabinsk and Petrozavodsk.About ten other Russian cities can compete with themon an equal footing.Russian secondary school and university studentsalso perform extremely well in individual programmingand computer science contests. 18 people made it tothe semi-finals of TopCoder Open tournament and4 of them represented Russia. The semi-finals andfinal of this tournament took place in Las Vegas onJune 3 and 4, 2009.In the most popular “Algorithm” category allprevious contests were confidently won by PyotrMitrichev from MSU. This time he took 4th place,losing to his compatriot Vladislav Isenbayev fromSaint Petersburg State University of InformationTechnologies, Mechanics and Optics (SPbGU ITMO),who eventually won the second prize.Unfortunately, the successful performance ofRussians in international programming contests wascreating among Russian officials the illusion thateverything is all right in the area of staff training.In reality, the IT industry has many complaints bothabout the Russian universities that are too slowin adapting their training programs to marketrequirements and about the education systemin general. The companies have to cooperate activelywith the universities and spend significant resourcesto bring students up to the business requirementsthrough additional education. If there is no qualitychange in the system of remuneration for the facultyand if there is no competitive environment, the highereducation system runs the risk of remaining in a stateof stagnation.Prizes won by Russian university teams at the ACM International Collegiate Programming Contest from 1999 to 2009*University namePlace on ACM International Collegiate Programming Contest1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Saint Petersburg State University of InformationTechnologies, Mechanics and Optics3rdplace5thplace3rdplace3rdplace1stplace3rdplace3rdplace1stplace1stplaceSaint-Petersburg State University9thplace1stplace1stplace6thplace11thplace3rdplace9thplaceMoscow State University9thplace2ndplace2ndplace9thplace10thplace5thplace2ndplaceSaratov State University6thplace7thplace1stplace6thplace4thplace7thplaceIzhevsk State University8thplace9thplace3rdplaceAltai State Technical University3rdplace8thplacePerm State University4thplaceNovosibirsk State University5thplaceUfa State Technical University of Aviation10thplacePetrozavodsk State University13thplace10thplace5thplaceUral State University13thplaceTotal winners 2 2 2 2 3 3 3 5 5 5 4 5* – total number of prizes varied from 10 to 13 during that periodSource: ACM International Collegiate Programming Contest34

Chapter 5.Human Resources and Labor MarketSTAFF TURNOVERDespite the economic crisis and lower demand forservices and solutions of Russian software developers,the staff turnover in Russia not only did not increasebut even somewhat diminished. If in 2008 it stoodat 9%, then in 2009 this figure was only 6%.Note that the calculations of this indicator do nottake into account the layoffs in the companies thatwent out of business. However, they were mostlysmall-size companies that employed in total no morethan 1%-2% of all workforces in the Russian softwaredevelopment industry.Low staff turnover in 2009 may be explainedby the general decline of the IT market, which wasparticularly obvious in Russia and by the correspondingdecline in a number of job offers from employers.Low staff turnover during the last decade is one ofthe competitive advantages that Russia possesses onthe global outsourcing services market. This indicatoris much higher in India, which is the global leaderin IT outsourcing.Our survey demonstrates that the lower theturnover of the company, the higher its staff turnover.The smallest companies lead in terms of staff turnoverwith the rate standing at 12%. The largest companieshave their staff turnover at 6%. Large companiesused the crisis to optimize their personnel. They were15%12%9%6%3%0%50%40%30%20%10%0%5%MoscowAnnual Staff Turnover(by the location of surveyed companies)Annual Staff Turnover, by size of the surveyed companies13%10% 11%6%more than$20 mln11%Saint Petersburg9%5%Siberia33%from $4 mlnto $20 mln2008 20092%Other cities36%3%6% 7%from $0.5 mlnto $4 mlnNo one laid off in 2009cutting “worthless staff”, recruited in the period ofextensive growth in 2007-2008 while hiring morequalified employees released during the crisis. Butin general, they managed to preserve the core oftheir personnel. Small companies were more oftenlaying off their employees but they also hired morefrequently.Staff turnover is slightly higher among thecompanies that are largely focused on the Russianmarket (7% against 5%), because they sufferedgreater during the crisis.As a year ago, the highest staff turnover is recordedamong the companies from Saint Petersburg (11%).In 2008, this indicator stood at 13%.SALARIESСThe average monthly salary of specializedemployees in all surveyed companies was $1,420.A year ago, it stood at $1,305. Even though thisfigure grew by 9%, we can’t affirm that the exporterswere raising the salary of their employees last year.Most likely, the income of programmers increasedin US dollar terms, generally, as a result of thestrengthening of the ruble against the dollar. In theperiod from March 2009 to March 2010, the exchangerate of the US currency declined by 21%. Therefore,if the salary of employees was expressed in rublesand did not change in the course of the year, it wouldgrow by 21% in US dollar terms.60% of the surveyed companies that replied tothe relevant question, express their average salaryin rubles (40% express their salary in US dollars).The average salary was specified by 93% of ourrespondents which allows us to estimate ratheraccurately its real amount and make a selection bygeographical distribution, the size of the companyand export share.To compare incomes of the programmers,please note, we have changed our methodologyfor calculating the average salary. Since this year,the respondents have the option of specifying theirsalary both in US dollars and in rubles (previously,12%less than$0.5 mln49%the respondents could specify thesalary in only US dollars). As a result,the margin of error in calculatingits dynamics has increased becausewe had to recalculate the salary inUS dollars and take into account theshare of the companies (to weighby the share) that provided the salaryfigures in different currencies.Starting next year, there will bean option to track changes in themonthly income of the programmers,distinctly, in rubles and in US dollars.This will provide more informationabout the ongoing changes.In spring 2010, the average salaryin the companies that have specified35

Chapter 5.Human Resources and Labor MarketAverage Salary, $ per month (by turnover of surveyed companies)Salarymore than$20 mlnfrom $4 mlnto $20 mlnfrom $0.5 mlnto $4 mlnit in Russian currency stood at 43,617 rubles ($1,462).The exporters that paid the salaries in US dollarswere paying less ($1,358), which was the result of thestrengthening of the ruble.In 2008 and in the first months of 2009, there was adecrease in the average salary expressed in US dollarsby about 20%. However, even then the change, ingeneral, was not the result of modified employmentagreements but the consequence of the lower rubleexchange rate against US dollar. In the period fromfall 2008 to spring 2009, the Russian currency lostabout 25-30% of its value. Thus, since the start ofthe crisis most of the exporters did not review thesalaries of their employees. The fluctuations of theaverage figure were, primarily, the result of changesin the ruble exchange rate. At the same time, we haveevery reason to affirm that the practice of annualindexation (increase) of salary, which in previousyears amounted to dozens of percentage points, wasstopped everywhere.The decline of the programmers incomea growth rate started in 2007 (before the crisis).Most likely, there won’t be any return to the previousgrowth rates.The larger are the company, the higher is itsaverage salary. This selection is not sufficient fora more accurate comparison of salaries in thecompanies of different size. It is particularly low in thecategory of large companies (with turnover of morethan $20 mln). Only one of those companies specifiedthe salary in US dollars and 2 companies in rubles.The average salaries in these companies are very high(higher than in other companies of the same size). So,in order to calculate the average salary for this group,we used the expert estimates by the managers ofseveral market players. As a result, the indicator forall largest companies turned out to be lower than theamount of $1,910 specified in the survey ($1,650).In other categories, the selection is much larger, andthe margin of error is, accordingly, lower.less than$0.5 mlnspecified in $ $1374.8 $1,165.6 $1,155.2specified in rublesaverage whenrecalculated in $57,000 rubles($1,910)36,200 rubles($1,215)38,700 rubles($1,300)31,100 rubles($1,040)$1,650 $1,300 $1,250 $1,080Average Salary, $ per month (by the location of surveyed companies)SalaryMoscowSaintPetersburgSiberiaOther citiesspecified in $ $1,260 $1,785 $1,025 $990specified in rublesaverage whenrecalculated in $52,180 rubles($1,750)35,070 rubles($1,175)25,670 rubles($860)24,550 rubles($825)$1,604 $1,460 $935 $900The highest labor costs are inMoscow and Saint Petersburg. In lastyear’s survey, the average salary inSaint Petersburg companies was evenhigher than in Moscow. However, suchleadership of Saint Petersburg mostlikely did not reflect the reality and wasa result of inadequately representativeselection for that city. This year, thesalaries in different cities calculatedfrom the data provided by the surveyedcompanies correspond to a largerextent to the information received fromother sources.The measurements performed by4 large Russian recruiting agenciesin 2010 indicate that the programmers’salaries in Saint Petersburg are about10-18% lower than in Moscow.In Siberia, the salaries are 36-57%lower than in Moscow, in other cities – 34-60% lower.According to the poll conducted within this researchproject, these differences are as follows: in SaintPetersburg the salary is 9% lower than in Moscow, inSiberia – 42% lower, in other cities – 44% lower.The average salary barely depends on the share ofexports in the consolidated revenues. In the companiesthat are to a larger extent focused on the Russianmarket, it stands at $1,390 while in the companies witha share of exports over 50% it stands at $1,360. Thedifference is within the existing margin of error.LANGUAGE PROFICIENCYThe share of employees in the softwaredevelopment companies, proficient at least in oneforeign language, barely changed in the last 3 years.The managers of the companies estimate that twothirds of the employees are fluent in English. The shareof those who are proficient in German, about 10%,remains stable. It appears that such a distribution ofemployees proficient in foreign languages adequatelyreflects the needs of companies at this moment.At the same time, there is a sharp increase inthe share of employees proficient in other foreignlanguages (from 3% to 11%). Most likely, it reflectsthe desire of Russian companies to enter newmarkets. Until now, most of the Russian software(software development services) exports went toEnglish-speaking and German-speaking countriesas well as to Northern Europe where the customersare usually fluent in English. In the meantime, we areseeing the growing popularity of the French marketas well as the markets of Latin America, Middle Eastand South East Asia.Among other languages, our respondents mostfrequently mention French (5 times). In addition, theymentioned Italian and Portuguese once.Most employees who are proficient in foreignlanguages work in companies in Moscow and36

Chapter 5.Human Resources and Labor Market80%70%60%50%40%30%20%10%0%80%70%60%50%40%30%20%10%0%80%70%60%50%40%30%20%10%0%80%70%60%50%40%30%20%10%0%65%Employees Fluent in Foreign LanguagesEnglish65%10%11% 3% 11%GermanOthers2009 Survey 2010 SurveyEmployees Fluent in Foreign Languages(by the location of surveyed companies)67% 66%70%12% 13%Moscow62%49%11%6% 8% 6%2% 1%Saint Petersburg Siberia Other citiesEnglish German OthersEmployees Fluent in Foreign Languages(by turnover of surveyed companies)12% 12%more than$20 mln57% 57%8%from $4 mlnto $20 mln64%10%7% 6% 0%from $0.5 mlnto $4 mlnEnglish German OthersEnglish German Others26%less than$0.5 mlnEmployees Fluent in Foreign Languages(by model of business of the surveyed companies)67%11%Service-orientedcompanies51%12% 4%7%Product-orientedcompanies78%5%6%Development centersof foreign companiesSaint Petersburg as well as in larger companies.We observed a similar correlation with the size andlocation of the company in previous years.Proficiency in a foreign language is an almostmandatory requirement in the development centersof foreign companies. Only a little more than 10%of employees of these centers can afford to speakonly their native language.For most employees in service-oriented companieswho work in permanent contact with their customers,it is also important to know a foreign language. Butin this group the significance of the English is slightlylower than the role played by other languages. Theproduct-oriented companies have the lowest share ofemployees proficient in foreign languages. In thesecompanies, most of the communications with thecustomers goes through sales managers.SITUATION IN THE LABOR MARKETIN RUSSIA AND OTHER COUNTRIESIt appears that the average salary of programmersin Russia will now grow at about the same rateas in economically developed countries (less than10% annually).The programmers’ salary gap between Russiaand the USA is still very large. On average, anAmerican IT specialist earns $6,500 a month whilehis/her Russian counterpart earns almost 4 timesless. However, on the global software market, Russiacompetes primarily with India, China, Vietnam, othercountries with low-cost labor and not with the USAand European nations. In addition, the advantage ofRussia over the USA in terms of labor costs is offsetby the higher expenditures for the lease of officepremises, administration of accounting and financialreporting, higher taxation of high-tech companiesand their employees.According to Russian software developers withremote development centers in other countries,the labor costs in Vietnam and China are at least2 times lower than in Russia. Other business-relatedcosts in these countries are also lower. The costs ofsoftware development in India remain much lowerthan in Russia.The salary ceiling in Russia is already reached, andit is defined not by the labor costs but by the taxationof the payroll (social payments) that the governmentadds to a company’s production costs. If the situationwith the social payments remains unchanged, andsoftware development companies do not receivesocial payment benefits promised by the President,the companies will be unable to raise salaries in orderto preserve and expand their staff. Therefore, theywill be forced to move their software developmentaway from Russia to other countries with morefavorable taxation.In many countries with cheap labor, salaries arealso growing fast. This is a result of an acute shortage37

Chapter 5.Human Resources and Labor Marketof qualified personnel in all developing countries.According to NASSCOM (the leading IT companiesassociation in India), quoted by The Wall StreetJournal, about 50% of all engineering graduates andup to 85% of all college graduates in other professionsare not fit for work in private companies after theirgraduation. There is no mandatory secondaryeducation in India and its quality is relatively low,which is a serious problem for the Indian IT industry.Russia has a good potential for increasing thenumber of personnel employed in the IT industry.According to Frost & Sullivan, Russia ranks first in theworld in terms of researchers and software developersper thousand inhabitants and it is the third in terms ofscientists and engineers per million inhabitants, wellahead of India and China. Russia ranks first in the worldin terms of the share of students receiving educationin technical disciplines (according to UNESCO, FederalStatistic Office of Germany). However, the use of suchpotential requires the establishment of favorableenvironment for software development businessin Russia.38

Chapter 6.Technologies

Chapter 6.TechnologiesCompared with our previous survey, a numberof references to various technologies and solutionsused in software development (operating systems,programming languages and tools, databases)did not change a lot and remains at a significantlylower level than shows 2008 survey. In our 2009 and2010 reports, as a result of the crisis, a number ofreferences to technologies fell in almost all segments.As a matter of fact, the license fees for operatingsystems, databases, programming tools used by laidoffemployees were diminishing simultaneously withthe “optimization of the personnel”. Before the crisisthese operating systems, databases and programmingtools were not used to their full capacity but wererather maintained for marketing purposes, awaitingnew orders.MS WindowsOperating Systems in Use0% 20% 40% 60% 80% 100%93.7%93%97%The second reason for the decline in a numberof tools and platforms in use by our respondentswas the significant increase in a number of surveyedcompanies with a larger share of relatively small-sizecompanies that have a limited range of technologiesand tools in use.As a result of the economic crisis, we wereadditionally able to learn to what extent the operatingsystems, databases and tools were used as a reserveand, conversely, what technologies could not give upcompanies despite the crisis.OPERATING SYSTEMSThe frequency of references to the 7 most popularoperating systems remains on the same level as inlast year (the variation is within the margin of error,no more than 1%). The only exception is Mac OS,the frequency of its references increasing from 9%to 15%. The growing popularity of this operatingsystem is most likely the result of the revolutionarybreakthrough made by this company in the mobileGNU Linux familyMS WindowsMobileSun Solaris17.1%16%26%16.2%15%41%53.5%53.5%64%MS WindowsOperating Systems in Use by the Smallestand Largest Companies0% 20% 40% 60% 80% 100%91%90%87.5100%50%Symbian OS10.9%12%25%GNU Linuxfamily38%88%100%26%9.1%Mac OS9%15%19%MS WindowsMobile3%25%88%HP-UXOpen/Free/NetBSDDOS2%9%0.5%7.3%7.2%18%6.3%25%Mac OSSun Solaris2.3%5%2.3%5%25%50%63%75%NovellNetwareMainframe10%0.5%3.6%6.6%5.4%Open/Free/NetBSD2.3%5%37.5%38%0.5%2.3%Unix(includingIBM-AIX)6%Symbian OS0%37.5%75%2008 Survey 2009 Survey 2010 SurveyOther operating systems mentioned by our respondents:SGI, QNX, Palm OS, Blackberry (by 1%)VxWorks, Windows Azure, Windows Embedded, Android (by 0,5%)company turnover less than $0.5 mln2009 Survey 2010 Surveycompany turnover more than $20 mln2009 Survey 2010 Survey40

Chapter 6.Technologiesand tablet devices market, which in generalcontributed to the increased attention to Apple’sproducts from customers in all segments.We find it hard to make a judgment on any changesfor the HP-UX system, since only 10 companiesmentioned Unix in their responses, and it is not alwaysclear which Unix-like system these respondents havein mind. There is some growth in the popularity ofSymbian and Open/Free/NetBSD, even though thisincrease only slightly exceeds the margin of error.We noticed the continuing decline in thefrequency of references to Novell Netware, DOS andMainframes. A year ago, it transpired that the crisismade a most negative impact on their popularity (aswell as on the popularity of Mac OS). But in contrastwith them, the popularity of Mac OS has significantlyincreased over the past year.DatabasesAmong the most popular databases, we notethe increased popularity of MySQL (from 36%to 47%), PostgreSQL (from 11% to 17%), MS Access(from 14.7% to 19%) and IBM DB2 (from 8% to 13%).The changes for other databases are within themargin of error.Among other databases that were not included inthe table, the respondents mentioned, no more thanonce, ADABAS, Apache Derby, Progress, IBM solidDB,MongoDB, DataFlex, RDM, Sedna and TimesTen. Twoof the surveyed companies are using their proprietarydatabases.Databases in UseDatabase 2008 Survey 2009 Survey 2010 SurveyMS SQL 82% 66,1% 63%Oracle 69% 48,6% 49%MySQL 68% 35,8% 47%MS Access 49% 14,7% 19%Firebird 19% 11,0% 11%PostgreSQL 31% 11,0% 17%MSDE 27% 9,2% 7%IBM DB2 33% 8,3% 13%InterBase 18% 7,3% 9%Sybase ASA 13% 6,4% 6%SQLite 8% 5,5% 9%IBM Informix 18% 5,5% 7%SAP DB 9% 4,6% 6%Sybase ASE 13% 3,7% 6%Sybase IQ 7% 2,8% 0%LINTER 5% 2,8% 0%Paradox 12% 1,8% 4%Cachee 7% 1,8% 1,3%Ingres 2% 1,8% 0,7%Berkeley DB 1% 1,8% 0,7%Other 13%Databases in Use by the Smallest and Largest CompaniesDatabasecompany turnover lessthan $0.5 mln2009Survey2010SurveyPROGRAMMING TOOLScompany turnover morethan $20 mln2009Survey2010SurveyMS SQL 61,4% 49% 87,5% 88%Oracle 31,8% 31% 75,0% 88%MySQL 27,3% 26% 62,5% 88%MS Access - 3% 50,0% 63%IBM DB2 - 9% 25,0% 63%PostgreSQL - 6% 50,0% 63%MSDE - 0% 37,5% 13%Firebird 6,8% 11% 25,0% 13%IBM Informix - 0% 25,0% 75%InterBase - 3% 25,0% 50%Sybase ASA - 6% 37,5% 50%Sybase ASE - 0% 25,0% 50%Paradox - 0% 12,5% 38%SAP DB - 0% 25,0% 38%Sybase IQ - - 12,5%LINTER - - 12,5%Ingres - - 12,5%SQLite - 0% - 25%Other - 6% - 38%There is a significant increase in the frequency ofreferences to C/C++ as the main program language(from 36% to 46%) compared with the previousyear. The figures for other programming tools barelychanged compared with last year.28% of respondents mentioned their secondaryprogramming tools (of all surveyed companies thatmentioned their main programming tool).We note the significant increase of referencesto C/C++ and .NET in the rating of secondaryprogramming tools. The frequency of referencesto C/C++ increased both in the rating of the mainprogramming tools and in the rating of secondaryprogramming toolsOther secondary programming languages: Forthand Ruby (by 3%), Fortran, Python and COBOL(by 2%). About 15 more tools were mentioned once.Only 49% of surveyed companies (78 respondents)mentioned their development tools. As a result,the margin of error for measuring the popularity ofprogramming tools is higher than in case of operatingsystems and databases. The frequency of referencesfor MS Visual Studio barely changed over the pastyear. The popularity of other tools slightly diminished.Among other development tools, our respondentsmentioned the tools provided by IBM (2.5%), BorlandJBuilder (2.5%), tools provided by Oracle (5%) as wellas their proprietary tools (6.5%).41

Chapter 6.TechnologiesC/C++Java/J2EEPascal(Delphi)Main Programming Tools0% 10% 20% 30% 40% 50%13%18.4%21.1%18%22%33%36%38%46%48%50%40%30%20%10%43%41%Secondary Programming Tools,used by the companies in certain projects31%38%0%Java/J2EE C/C++23.8%45%.NET19%17% 16.7%15%Pascal(Delphi)PHP2009 Survey 2010 Survey6%8%PL/SQL6%4.8%Perl.NET17.5%PHPPL/SQLPerl5.8%8%1.9%3%2%11%4%13%2008 Survey21%2009 Survey 2010 SurveyOther programming tools mentioned by our respondents:Ruby (2 references), Cobol (1), Python (2), 1С (3)80%70%60%50%40%30%20%10%0%Most Popular Development Tools63.6%60%46%25%19% 19%10%4.5% 3% 10% 3%6.8%MS Visual StudioEclipse Intellij IDEA Delphi2008 Survey 2009 Survey 2010 Survey42

Summary

SummaryFaced with a 2.3-2.6% drop in demand on theworld software market (according to IDC andGartner) and a 5.3% drop on the world IT servicesmarket, the Russian software companies managed toincrease their foreign sales by 5% last year. In 2009Russian software and development services exportreached $2.75 bln.Russian software exports volume growth wasfueled by sales of software products which increasedby 28%. The exports of products and ready-madesolutions exceeded the nominal milestone of $1 bln.The sales of software development services remainedat the level of 2008. There was a certain reduction inthe turnover of Russian software development centersof foreign corporations. We assume that in thecoming years there will be the increased expansionof software products exports while the exports ofsoftware development services will grow slightlyslower with more emphasis on high-tech projects.The 2010 Global Outsourcing 100 Rating includesa record number of 13 companies from Russia andneighboring Russian-speaking countries. In this list areAllied Testing, Artezio, Auriga, IBA Group, Itransition,Intetics, EPAM Systems, Luxoft, MERA Networks,Reksoft, SaM Solutions, Sibers and SoftServe.7 Russian companies in this rating are among theTop 100.The image of Russia as a provider of softwareand development services to the world market isgradually improving. Russia increased by 11 points inthe Global IT Industry Competitiveness Index by theEconomist Intelligence Unit by climbing to 38th placeahead of all other BRIC countries. However, 40% offoreign media publications with keywords «Russia»and «Software» mention spamming, computer virusesand cyber attacks rather than successful Russiansoftware developers and the victories of Russianuniversity teams in software programming contests.This contributes to a generally negative image of thecountry. Only 15% of publications bring a sense ofsomewhat positive image of Russia. This negative toneof publications about Russia and its IT industry doesnot correspond to real life where Russia significantlylags behind the USA, China, Brazil and some othercountries in terms of generating spam and malware.As a year ago, most of the respondents believethat the crisis «worsened slightly the situation» forthe industry. Primarily, it made the negative impacton the smallest companies (with turnover of less than$0.5 mln). About 100-150 of such companies wereforced out of business in 2009. At the same time,almost a quarter of the small businesses that remainedeither felt no impact of the crisis or noted its positiveimpact. So we can be sure that in the next 2 yearsa number of small businesses will be restored to its2008 level and will grow as fast as ever.In the past year, the software developers treatedwith caution any prospects of market growth andincoming investments. No more than 8% of surveyedcompanies attracted new investments. However, thefact that 20% of respondents declared their desirein attracting outside financing in the next two yearssuggests that the period of uncertainty is over.According to the companies, their businessenvironment in Russia in 2009 either got no worseor did not change at all. Compared with theprevious survey, the respondents rate better only the«Availability of Up-to-date Infrastructure», «HumanResources Availability» and «Financial Support to SmallBusinesses and Start-ups». It is a paradox that a largenumber of positive responses about the first twocharacteristics are most likely the result of economiccrisis. This crisis led to a reduction in commercialproperty rental rates and to a certain (temporary)reduction of the tensions on the labor market.All existing improvements in the Russian businessenvironment are offset by the changes (expected oralready in place) in the domestic taxation policy. Theincrease of payments on wages, under the legislationthat replaces the Unified Social Tax (UST) by socialpayments, significantly deteriorates the financialindicators of software development companies. Thereplacement of UST by social payments would alsomean the loss of benefits under UST that were usedby software exporters in 2008-2009. If the governmentdoes not adopt promised measures to ease taxationfor software developers, the competitiveness of theindustry will be seriously damaged.According to the survey, 2009-2010 saw a steadydecline in the importance of the «US and Canada»market for Russian software developers. The WesternEuropean market, primarily, German and Scandinavian(including Finland), remains on the same level, whilethe importance of French and Italian markets issomewhat increasing. CIS countries are becomingthe most rapidly expanding market. Russian softwaredevelopers are increasingly present in the marketsthat are new to them: Latin America, South East Asia,Middle East, Australia and Africa.Large software developers are continuing theirexpansion in Russian regions. The head offices andremote development centers of surveyed companiescan be found in 50 Russian cities. Most of the remotedevelopment teams, outside Moscow, the MoscowRegion and Saint Petersburg, are based in Novosibirsk,Voronezh and Rostov-on-Don. Belarus is becomingan attractive region for Russian remote developmentcenters. Similar centers will be also created in China,Vietnam and Eastern Europe.The surveyed exporters have significantly reducedtheir activities on the Russian labor market comparedwith the previous year. 23% of the companies hiredno new employees within the year. This indicatorwas at 9% in 2009 and 5% in 2008. At the sametime, the companies tried to preserve the core oftheir staff while the employees preferred to keeptheir working place than to seek a better level oflabor compensation. The staff turnover in Russia notonly failed to increase in 2009 but it even somewhatdiminished (6% instead of 9% in 2008).44

SummaryThe salaries in software companies slightlydecreased in 2009, but at the beginning of 2010 theyreturned to their pre-crisis level. Finding qualifiedpersonnel will be the biggest challenge for Russiancompanies in the coming years. This problem iscompounded by the «demographic pit» resulting fromthe decrease in the birth rate during «Perestroika».Our respondents believe that the quality ofprofessionals prepared by the Higher EducationSystem is somewhat decreasing. Nevertheless, theirlevel of education still remains one of the highestin the world which is confirmed by the victories ofRussian universities teams in the world programmingcontests (ACM) and stronger position of the Russiancompanies on the high-tech development market.45

PARTICIPANTSOF THE SURVEY

Participants of the surveyABBYYCompany OverviewWebsiteLocations WorldwideABBYY is a leading developer and provider of document recognition, data capture,linguistic technologies and services. ABBYY software products range from end-userapplications for PC, Mac and mobile devices to cloud-based enterprise solutionsand development tools. ABBYY maintains a strong focus on innovation and has a20-year history of scientific research in the field of artificial intelligence and appliedlinguistics.ABBYY covers all major markets across five continents. Today, more than 30 millionpeople from over 130 countries use ABBYY products and technologies. Paperintensiveorganizations from all over the world use ABBYY solutions to automatetime- and labour-consuming tasks and to streamline business processes. ABBYYlinguistic technologies and services help break down language barriers, facilitatingbetter communications.ABBYY Language Services provides comprehensive language solutions tocorporate customers, offering technology-intensive and high-quality translationand localization services.Another of ABBYY’s business domains is publishing paper dictionaries and referencebooks (ABBYY Press).www.ABBYY.com, www.ABBYY-ls.com10 offices in Russia, Germany, Ukraine, the United States, the United Kingdom,Japan, Taiwan, and CyprusFounded in 1989EmployeesKey Productsand servicesKey Partnersand CustomersRecognitionand AwardsABBYY Group employs over 900 people worldwide.ABBYY FineReader line of optical character recognition (OCR) applications; ABBYYFlexiCapture line of document capture solutions; ABBYY Lingvo dictionary software,and development tools for integrating OCR and document capture technologies;end-to-end translation and localization services to corporate customers.Companies that license ABBYY technologies include BancTec, Canon, EMC/Captiva,Hewlett-Packard, Microsoft, NewSoft, Notable Solutions, Samsung Electronics,among others. ABBYY OCR applications are shipped with equipment from theworld’s top manufacturers such as BenQ, Epson, Fujitsu, Fuji Xerox, Microtek,Panasonic, Plustek, Toshiba, and Xerox. ABBYY products are used in large-scalegovernment projects such as those of the Australian Taxation Office, BrazilianFederal Tax Department, Lithuanian Tax Inspectorate, Ministry of Education ofRussia, Los Angeles County and Montgomery County Government of the USA.More than 1000 customers worldwide have entrusted ABBYY Language Serviceswith their linguistic tasks; more than 10 of them belong to the 100 best globalbrands.ABBYY products have gained significant recognition from leading industrypublications, partners and technology organizations around the world with morethan 200 awards. Examples include:• The Russian Government Science and Technology Award• KM World “Trendsetting Product of the Year 2010”, for ABBYY FlexiCapture 9.0• KM World “Trendsetting Product of the Year 2008”, for ABBYY FineReader 9.0• Silver Mobile Star Award from MobileVillage, for ABBYY Mobile OCR Engine47

Participants of the surveyArtezio – the Art of TechnologyFounded 2000HeadquarteredMoscow, Russian FederationCompany OverviewDevelopment centersSales representationCertificationServicesArtezio is an ISO 9001:2008 certified software development and consultingcompany. Over the last nine years, Artezio has completed more than 300 projectsfor its international clients. Artezio’s software development services allow its clientsto deploy multi-platform applications, thus letting them leverage the power ofmodern software technologies. This is done with the highest degree of engineeringskills in conjunction with clear and transparent communication processes. As abusiness consulting service provider, Artezio offers technology companies helpand expertise in setting up and managing their own offshore/ nearshore softwaredevelopment centers.Since 2005, Artezio is a member and a major offshore division of LANIT group whichis a $1.4B IT Services vendor with 4000 employees. From its development centersArtezio delivers cost effective, high quality IT services to clients in North America,Europe, Middle East and Japan thus being one of the leading Russian offshoresoftware developers.Moscow, Saratov (Russia); Minsk, Vitebsk, Mogilev (Belarus); Toronto (ON, Canada)Moscow (Russia), Cherry Hill (NJ, USA), Rosenheim (Germany)ISO 9001:2008, Microsoft Gold Certified• Software engineering• Technology consulting• Software quality assurance andcontrol• Support and maintenance• Offshore development centersetup and operate• IT outstaffingIndustry focusCorporate solutionsTechnological profileCorporate websitesContactsCore: Healthcare/Pharmaceuticals/Bio-tech/Life Sciences, Finance/Banking,Telecommunications, Hi-techEmerging: Transportation/Logistics, Retail, Entertainment/Media, Education,Governmental, Gas and OilBusiness software: business applications, web-applications, SaaS, e-Learning, CRM,PRM, ABAP development for SAP, software customizationPortal Software: Open source (Liferay, GridSphere, Exo) platforms based largescalebusiness portal solutions; Sharepoint-based portal development; Large-scalevideo streaming entertainment portalsIntegration: J2EE and .Net-based application integration; ESB-based bankingsoftware integration; SOA based integration; IVR data integration for CRM software;Integration with SAP software modulesBI: Data Mining, Data Warehousing, OLAPDocument workflow: SharePoint, Nuxeo, AlfrescoMobile platforms: J2ME, iPhone, Android, SymbianPlatforms: Microsoft Windows 98/NT/2000/ XP/Vista, Linux, FreeBSD, IBM AIX, SunSolaris, HP-UXTechnologies: J2EE, Microsoft .NET, LAMPProgramming languages: Java, C, C++, C#, Perl, PHP, SAP/ABAPProduct lines: IBM, Microsoft, Oracle, SAP, JBossDatabases: Oracle, Microsoft SQL Server, IBM Informix, MySQL, PostgreSQL,InterBaseMethodology: WF, RUP, Agile (SCRUM, XP)http://www.artezio.com, http://www.artezio.ruinfo@artezio.com, sales@artezio.comRussia: Phone: +7 495 981-0531, Fax: +7 495 232-2683USA: Phone: +1 978 930-1698, Fax: +1 856 596-7512Germany: Phone: +49 8031 267-93548

Participants of the surveyAurigaElite Software R&D ServicesSince 1990Founded in 1990Engineering LocationsServicesDomain VerticalsMajor ClientsTechnologies &PlatformsAwardsRussia (Moscow, N. Novgorod, Rostov-on-Don), EU (Vilnius, Lithuania)• Software Product Engineering andADM• Custom Software Development• Product Maintenance• Re-engineering and Porting• Customization and Integration• Software Testing and QA• Product Support• Technology Research andConsulting.High-tech, Telecom, Mobile, Healthcare, Finance, Information security, Media andEntertainment, Education, Government, and more.IBM, LynuxWorks, Actel/Pigeon Point Systems, BroadVision, Dräger Medical,Dialogic, Raymarine, etc.• Embedded devices (ARM, PowerPC, Intel, FPGA…)• Real-time systems (VxWorks, QNX, ThreadX, pSOS, eCos, LynxOS)• Linux (server, desktop and embedded), UNIX, Windows internals.• Mobile (Android, Symbian, RIM BlackBerry, LiMo, Moblin, Windows Mobile) andWireless (GSM, 3G, Bluetooth, WiFi, WiMax)• Enterprise applications: Workflow, document and content management (EMCDocumentum and other), CRM systems.• Web services, high loaded distributed applications• .Net and Java platforms for portals (SharePoint, Liferay, IBM WebSphere), weband desktops application development• Databases (MS SQL, Oracle, DB2, Sybase, MySQL)– Ranked #15 in worldwide Top 50 Best Managed Providers of The 2010 Black Bookof Outsourcing (by Datamonitor), the highest rank achieved by a Russian companyever. In earlier years ranked as #3 among ITO service providers in CEE and #6 amongsoftware testing / QA providers worldwide.– In Global Outsourcing 100 (rating by IAOP) since 2008. In 2010 listed among bestin healthcare, telecom, high-tech industries, R&D services, Russia region.– In Global Services 100 (by Global Services Media and neoIT) since 2006. Thecompany is ranked among the “Top 10 Service Providers: Eastern Europe”.– In overall Top 20 of software R&D service providers and in Top 10 among thecompanies serving Software industry, in 2009 ranking of service providers in India,China, Russia, Ukraine & CEE by Zinnov Management Consulting.Industry Standards CMMI Level 4, ISO 9001, SPICE, DO-178B, ISO 13485About AurigaAuriga is the first Russian software R&D and IT outsourcing services provider thatstarted providing offshore/nearshore software development services to US/EUcustomers.Wide range of services, best resources with creativity mindset, working on themost challenging projects, provided Auriga with global hi-tech, finance, healthcaremajors in its clientele list.Many of our clients stay with us for years, several of them call for Auriga services formore than 10 years. They are attracted by the synergy effects of Auriga’s hard andsoft skills – quality of delivery and personnel qualification combined with culturalproximity to the buyer, flexibility in approaches, methodologies and processes(from «heavyweight» methods to Agile) and orientation towards customer businessgoals. Mutually augmenting and strengthening each other, these proficiencies makeAuriga the poster child of Russian IT outsourcing.Contacts Auriga, USA: 92 Potter Rd, Ste. 1, Wilton, NH 03086, USA.Phone: +1 (866) 645-1119. Fax: +1 (603) 386-6097Auriga, Russia: 125 Varshavskoe Shosse, Unit 16A, Moscow, Russia, 117587Phone: +7 (495) 713-9900, Fax: +7 (495) 939-0300Web siteE-mailhttp://www.auriga.cominfo@auriga.com49

Participants of the surveyEPAM SystemsCorporate websiteContact emailHeadquartersFounded 1993Headcount 5,500+Company OverviewDevelopment centersMajor Service OfferingTechnology FocusPractice Areaswww.epam.cominfo@epam.com, sales@epam.comNewtown, PA, USAEPAM Systems is the leading provider of full-cycle software engineering and ITconsulting services with development centers in Central and Eastern Europe.EPAM provides services to clients worldwide utilizing global delivery model throughits customer support operations in North America, UK, Germany, Sweden, andSwitzerland together with 5,500 IT professionals across development centers inCentral and Eastern Europe and Russia.EPAM’s core competencies include complex software product engineering forleading global software and technology vendors, as well as development, testing,maintenance, and support of mission critical business applications and verticallyoriented IT consulting services for global Fortune 2000 corporations. EPAM hasdeveloped, deployed into production, as well as currently supports and maintainssystems for global customers in 30+ countries and 13 languages.The company has always focused on providing distributed application developmentservices across multiple sites. As such our entire core processes and systems (qualitysystems, management processes, software development tools, build managementetc.) have been designed, implemented, and proven over the last 17 years tosupport this delivery model.Certified as compliant with SAS 70 Type II security standard, EPAM’s experience isbacked by financial strength, security & IPR protection, maximizing quality, efficiencyand scalability of company operations while minimizing risks.Russia, Ukraine, Belarus, Hungary, Kazakhstan• Software product engineering and custom development• Project-based technology consulting• Application Testing, Maintenance and Support• Application Migration and Reengineering• .NET (1.1 through 4.0) (ASP.NET, Win Forms, WPF, Silverlight)• Java EE (SOA, ESB, Web & Rich Client Applications, Grid)• SAP NetWeaver (xApps, Web Dynpro, EP, BW, BI, XI, MDM)• DBMS (Oracle, MS SQL Server, Sybase, MySQL)• Enterprise Content Management (EPAM CMS, Open Source, Stellent (Oracle),Documentum, Interwoven)• Embedded SW development (OSE, VxWorks, LynxOS, Reliant (pSOS), QNX, Linux,HP-UX, Solaris, Windows NT 4.0 Embedded, Windows CE/Mobile)• Software Product Development• Finance and Banking• Media and Entertainment• Travel and Hospitality• Insurance and Healthcare• Telecommunications• Oil/Gas, Energy• Retail and Consumer GoodsPartial Customer ListAwardsThomson Reuters, The Coca-Cola Company, Wolters Kluwer, MTV Networks,Expedia, Schlumberger, Renaissance Capital, MICEX, Whirlpool, SAP, Microsoft,Oracle, ATG, Barclays Capital, mobilkom austria group• The 2010 Global Outsourcing 100: ranked highest among Central/EasternEuropean and Russian ITO vendors; included into multiple individual sub-lists;• The 2010 Global Services 100: named among the global Top 10 «OutsourcedProduct Development Vendors»;• Top 50 Best Managed Outsourcing Vendors 2009: is the sole Central/EasternEuropean and Russian ITO vendor on the list; listed for the third time since 200650

Participants of the surveyeVelopers CorporationCompany NameURLEmailHeadquarterDevelopment CenterNumber of employers 50Founded 1999ContactsAbout CompanyeVelopers Corporationwww.evelopers.comsales@evelopers.com800 W El Camino Real, # 180, Mountain View, CA 94040 USA15, 26 Line, Vasilievsky Ostrov, St. Petersburg, 199106, RussiaUSA +1-408-406-8727, e-mail: svelednitsky@evelopers.comRussia +7-812-324-3211 ext. 702, e-mail: anarvsky@evelopers.comeVelopers is an ISO 9001:2008 certified software development company whichprovides consulting, and IT outsourcing to customers worldwide. With the teamof professionals we have over 10 years experience in designing and developingoutsourcing projects. Our services vary from custom application development,maintenance and support to providing Offshore Development Center and ITconsulting.Headquartered in California, eVelopers maintains presence in Silicon Valley and aglobal development center in St. Petersburg, Russia.IndustriesTechnical expertiseWhether a multi-billion dollar corporation or a promising startup, our clients sharethe same need: to find the best technical resources no matter where they arelocated. Businesses and organizations of all sizes, including Fortune 500 companiesuse eVelopers as extension of their IT team to become cost effective and moreefficient.Hi Tech, Travel and Hospitality, Financials• web technologies: xhtml, css, js, ajax, json, json-rpc, xml, xslt, xpath, xforms,action script, php• web frameworks: jQuery, Dojo, ExtJS, ExtGWT, Flash, Flex, Backbase, PureMVC,CakePHP, PEAR, PECL, ADOdb, Sencha• java platform (first company in St. Petersburg to embrace J2EE standard,delivered more than 150 different J2EE projects):– java se: 1.2 to 1.6– java ee: jsp, jstl, jsf, servlets, ejb, jms, jta, jca, jaxp, jaxm, jax-ws, jmx, struts,spring, hibernate, jboss seam, icefaces, myfaces, gwt– java me: cdc, cldc, midp• application platforms: Jboss, Sun One, BEA WebLogic, IBM WebSphere, AdobeLifeCycle, Alfresco• ms platform: c#.net, asp.net, ado.net, SilverStripe, BizTalk• portal platforms: JBoss, Oracle, Liferay, CAS, Tibco• integration with legacy systems: web services, BizTalk, DCOM, CORBA, BEATuxedo, RosettaNet• cms: Alfresco, SilverStripe, Drupal• mobile platforms: Android, iPhone, Sencha Touch51

Participants of the surveyFirst Line SoftwareOverviewServicesAreas of expertiseWebsiteContact infoGlobal presenceFirst Line Software is a premiere provider of product and custom applicationdevelopment services to industry leaders and growth companies around the world.Our mission is to deliver software that continuously meets and exceeds customers’expectations through unrivaled technical competence, advanced developmentmethodologies and proven governance approach. First Line focuses on serving themost demanding clients whose primary focus in outsourcing is quality, reliabilityand continuity. We maximize business value for clients through transparency,communication, and collaborative approach to client engagements. First Line’scustomers benefit from our almost two decades of experience and deep expertisein building, operating and growing highly productive software development teams.We serve a variety of clients from different industries and geographies, from NorthAmerica and Europe to Southeast Asia. Although we specialize in helping softwareproduct vendors, we can work with any firm whose business is enabled by orgreatly relies on software.• Product development: technology research and selection, product design,specification and mock-ups, prototyping, full cycle development, componentdesign and integration, performance engineering, customization andenhancement, porting and migration, deployment, support and maintenance• Custom application development: feasibility and requirements analysis forbusiness case, application design, development, and implementation, systemsintegration/consolidation, re-engineering, performance tuning and portingservices• QA and testing: Test process audit, test coverage analysis, test strategydevelopment, test execution, test automation• Business Intelligence• Master Data Management• WCM/EPiServer• ECM• Cloud computing• Enterprise portals• Windows network managementwww.firstlinesoftware.comE-mail: sales@firstlinesoftware.comPhone: +1 (877) 737-7178USA, Russia52

Participants of the surveyLanit-TercomFoundation date 1991HeadqurtersHeadcount 300+Company OverviewKey areas of expertiseCompetence CentersMain tools andtechnologiesOperating systemDatabasesDevelopmentof HardwareNetwork technologiesKey clientsWebsitesContact informationSt.PetersburgLanit-Tercom is the leading Russian software and hardware development company,one of the originators of the Russian IT-industry with about 20 years of successfuloperation on the IT-market.Lanit-Tercom works with the customers from Russia, the USA and the EU.The company operates in historical closeness with St.Petersburg State University, oneof the biggest pools of highly-qualified engineers. Thus, the best Russian scientiststhat work with the most complex and scientific-intensive projects can be hired.The core Lanit-Tercom’s services are: development of software/hardware complexes,software/hardware optimization, reengineering and ODC set-up.• Energy & Industry• Banking & Finances• Telecom/Internet• Education• Law• Transportation• Publishing & Media• Mathematical software• Energy & Industry• Electronics development• Reengineering• Image and Video Processing• Media and Publishing• Mobile applications• Special purpose electronics• Software for managing analytical equipment• Resource PoolС/С++, Microsoft .NET, Java, J2EE, COBOL and other legacy technologies, Webtechnologies,MATLAB, Simulink, ADTF, VHDLMicrosoft Windows 98/NT/2000/XP/2003, Linux Kernel 2.0-2.6, HP UX, Sun Solaris,OS/2, IBM Mainframe, real-time operating systems, embedded systemsOracle, Microsoft SQL Server, IBM Informix Dynamic Server, IBM DB2 UDB, MySQL,Microsoft Access, PostgreSQL, InterBaseFPCA (VHDL), CPLD, DSP, RISC, ASICATM, FDDI, Ethernet/Fast Ethernet, xDSL, IP, X.25, VPN, IP-over-X.25, X.25-over-IP,VolPT-Systems, Microsoft, Pro Television, Siemens, Citibank, Relativity Technologies,NetHawk, APL, Blue Phoenix, Comapping , Italtel, Navio, Oplayo, FOSS, Focon,International Intellectual Group, Laerdal, Ministry of Defense of RF, Saint-PetersburgState University, Federal Agency for governmental communication and information(FAPSI).www.lanit-tercom.ru, www.lanit-tercom.com28 Universitetsky pr., St.Petersburg, Peterhof, 198504, RussiaPhone: +7 812 428 41 94, Fax: +7 812 428 74 09Email: contact@lanit-tercom.com53

Participants of the surveyURLContact E-mailwww.abisoft.spb.ruinfo@abioft.spb.ruContact Phone +7 (812) 591 6903HeadquartersYear of Foundation 1998Number ofEmployeesProgrammingLanguagesAbout ABI SoftSaint-Petersburg13C/C++, C#ABI SoftABISoft Ltd. is a dynamically growing software development company. The core of ourteam was formed in 1999 year, during the work in w-Technologies representative office.We have experience in the areas of distributed and autonomous systems for mobiledevices, WEBapplication development, local or remote support of up systems, databaseadministration, development of computer games, etc.URLContact E-mailwww.akvis.cominfo@akvis.comContact Phone +7 (342) 237 9328HeadquartersPermYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout AKVIS20C/C++AKVISAKVIS specializes in development of image processing software and scientific research.The company was founded in 2004 by IT professionals having considerable experience inprogramming and software development. Since then the company has released a numberof successful programs. The software development division is located in Perm, Russia.The company sponsors web-design and digital photography contests. AKVIS offers freelicenses to non-profit organizations (heritage foundations and historical societies) involved inconservation and restoration of photographic archives having cultural value.URLContact E-mailwww.alfatran.cominfo@alfatran.comContact Phone +7 (495) 232 6091HeadquartersKhimkiYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout Alfa-Tranzit13C/C++, C#Alfa-TranzitEngineering & Consulting Centre of Alfa-Tranzit Co., Ltd was founded in 2000 year by MikhailK. Leontiev - academician, professor, doctor of science, the member of SAE. Leader inrotordynamics field, who together with the employees have accumulated over 40 years ofrotating machinery field design and service experience. Today the company has become oneof the Russian industry leaders in the software, analysis, design and testing of rotor structursfor high performance turbomachinery.55

Participants of the surveyURLContact E-mailwww.ascon.ruinfo@ascon.ruContact Phone +7 (812) 703 3933HeadquartersYear of Foundation 1989Number ofEmployeesProgrammingLanguagesAbout AsconSaint-Petersburg550C++, DelphiAsconASCON was founded in 1989 as a private company and become one of the first CAD/AEC/PLM developers and integrators on the Russian and CIS member countries market. ASCONsoftware solutions address key issues of engineering design, such as preparation and releaseof drawing and design documentation, business process development and engineeringdata management. Today ASCON operates more than 60 offices in major industrialregions worldwide. Each company branch provides a full range of services in softwareimplementation, IT consulting, personnel training, software integration and support.URLContact E-mailwww.asv.rusaleinfo@asv.ruContact Phone +7 (342) 224 4444HeadquartersPermYear of Foundation 1994Number ofEmployeesProgrammingLanguagesAbout ASV32C, PerlASVCreated in 1994, JSC ASV is Russia’s leading developer of highly technological solutions forthe telecommunication business automation. Over 50 Russian telecommunication companiesare using JSC ASV’s solutions, profiting from their reliability, scalability, availability, lowoperating costs and simplicity of servicing. JSC ASV has been able to develop a uniquetechnology to implement and support its own solutions, thus being able to make more than50 installations in the lines of three regions in the Republic of Kazakhstan in 1998, includingthe largest city of Alma-Ata, in Kazakhtelecom JSC.URLContact E-mailwww.avicode.comhr@avicode.comContact Phone +1 (443) 577 3000HeadquartersYear of Foundation 2001Number ofEmployeesProgrammingLanguagesAbout AvicodeBaltimore, USA100C#AvicodeAVIcode is the leading provider of application monitoring solutions for the Microsoft .NETFramework. With its award-winning technology and innovative products, AVIcode deliversthe industry’s most complete suite of application monitoring solutions used throughout thefull application lifecycle.57

Participants of the surveyURLContact E-mailwww.bacup.rua.r.rakhimov@bacup.ruContact Phone +7 (383) 325 0771HeadquartersYear of Foundation 1990Number ofEmployeesProgrammingLanguagesAbout BACUP ITNovosibirsk42BACUP ITBacup IT – private Russian software development company with the primary focuson custom business application development. The company was founded in 1990 inNovosibirsk, Russia. Bacup IT gathered the best programmers and software developers andshaped up a solid harmonious software development team. The team consists of diversein age software specialists with one common goal–use all the expertise and skills to meetgrowing expectations of our customers.URLContact E-mailwww.bornica.ruinfo@bornica.ruContact Phone +7 (495) 764 3144HeadquartersMoscowYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Bornica12Pascal, DelphiBornicaThe Bornica company was created in the year 2003. We develop and sell software forbusiness. One of our products «Autobase» gained popularity and is being widely used infleet managemet. We deal with differnt regions in Russia (Saint-Peterburg, Kaliningrad,Murmansk, Arhangelsk, Vladivostok and other) and we also would like to have foreignpartners. Among our clients there are large oil companies, construction companies, heavymachinery companies.URLContact E-mailwww.canopus.rusales@canopus.ruContact Phone +7 (495) 956 3468HeadquartersMoscowYear of Foundation 1993Number ofEmployeesProgrammingLanguagesAbout Canopus15PHP, DelphiCanopusCANOPUS Software Ltd was founded in 1992. With more than 18 years of experience inInformation Technology market we established a reputation of a stable and reliable supplierof solutions for financial companies, banks, corporate treasuries and payment systemsoperators. For the present day, the company structure includes the following departments:Development; Implementation and support; Sales and Marketing; Accounting and Finance.58

Participants of the surveyURLContact E-mailwww.cboss.ruinfo@cboss.ruContact Phone +7 (495) 363 4460HeadquartersMoscowYear of Foundation 1996Number ofEmployeesProgrammingLanguagesAbout CBOSS500CBOSSCBOSS Corporation offers the full range of equipment, system and application softwareand professional services, including consulting, turnkey implementation, technical support,staff training and IT outsourcing, providing telcos with guaranteed operations quality whileminimizing operational and capital expenditures.URLContact E-mailwww.cn-software.comsupport@cn-software.comContact Phone +7 (8162) 603 500HeadquartersYear of Foundation 2005Number ofEmployeesProgrammingLanguagesAbout CN-Software,LtdVeliky Novgorod10PHP, Python, C, PerlCN-Software, LtdCN-Software Ltd. was registered in August, 2005; however, the history of our company(known as CN-Software.com) started in 2002, when the first copies of CNSearch - the searchsystem for web-sites - had been sold. That was the time when the core of our team, aimedat web-site software development, formed. Later, the number of our software productsincreased. Some of our developments are now presented as software products.URLContact E-mailwww.constant.obninsk.ruandrey@constant.obninsk.ruContact Phone +7 (484) 394 4474HeadquartersObninskYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Constant25C, Java, Delphi, PascalConstantConstant is a nearshore software development company, benefiting from the huge potentialof highly educated software professionals in science cities. We believe that your peopleshould focus on the most essential; creating value for your customers instead of coding. Ourmotivated and skilled teams, work as they were your business unit, but at the local cost level.59

Participants of the surveyURLContact E-mailwww.crystalreality.cominfo@cristalreality.comContact Phone +7 (812) 954 6216HeadquartersYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Crystal RealitySaint-Petersburg10C++Crystal RealityCrystal Reality LLC was founded in the March 2003 in Saint-Petersburg, Russia by KimBondarenko, Philip Philonenko and Misha Filippovitch to improve the basis for thedevelopment of Crystal Player product and to bring professional scale management fordeployment of the technology to the users. The actual development of Crystal Playerproduct was started in Oct 2002 by Kim Bondarenko. We specialize on highly complexmultimedia solutions for wide range of platforms, providing our customers both qualityproducts as well as well tested software components for building media applications.URLContact E-mailwww.cti.ruinfo@cti.ruContact Phone +7 (495) 784 7313HeadquartersMoscowYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout CTICommunications13Delphi, C++, Java, C#CTI CommunicationsCTI is a system integrator and software development company located in Russia,specialized in communications solutions. Our portfolio includes the following solutionsfor telecommunications companies: Networks, IPTV, OSS/BSS, Service Delivery Platforms(SDP), VoIP, Self-care portals, Data centers and also for corporate customers: UnifiedCommunications, Contact Centers, ITSM and Information Security. CTI develops its own suiteof software products for telecommunications market such as billing systems, components ofOSS/BSS systems, IP-Telephony applications and Video over IP management systems.URLContact E-mailwww.darout.ruausov@darout.ruContact Phone +7 (812) 346 8530HeadquartersYear of Foundation 2001Number ofEmployeesProgrammingLanguagesAbout Darout ServiceLdtSaint-Petersburg45JavaDarout Service LdtDAROUT SERVICE Ltd. is a prospective outsourcing company, with a strong organization andmanagement aimed at performing the projects on Software Design and Implementation,including ERP and financial applications, custom software for Internet and Mobile Devices,Database design, administration and tuning.60

Participants of the surveyURLContact E-mailwww.dataart.cominfo@dataart.comContact Phone +1 (212) 378 4108HeadquartersYear of Foundation 1997Number ofEmployeesProgrammingLanguagesAbout DataArt®New York, USA400DataArt®.Net, Java, C++, Python, Ruby, PHP, Perl, Objective-CDataArt is a leading provider of high-end software outsourcing services for SMEs,specializing in enterprise application development, system integration and businessautomation tools, with industry-specific software expertise in financial, telecom and mediasectors. Headquartered in New York.URLContact E-mailwww.daxx.cominfo@daxx.comContact Phone +7 (812) 493 5543HeadquartersYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout DaxxAmsterdam20PHPDaxxDaxx is an IT Service provider founded in 1999 and based in the Netherlands using nearshoredevelopment centers. Daxx offers high quality IT solutions and staffing mostly to small andmedium sized companies. For the technical skills required by our clients we use our threein-house competence centers. These centers are located in St. Petersburg, Donetsk andKiev. Our experience with IT production and service for the last 10 years, our experience inRussia and Ukraine and the high educational standards in these countries ensure that we canhandle even the most complex projects.URLContact E-mailwww.digdes.ruinfo@digdes.comContact Phone +7 (812) 346 5833HeadquartersYear of Foundation 1992Number ofEmployeesProgrammingLanguagesAbout Digital DesignSaint Petersburg300С/С++,C#,VB/VB.NET,JavaDigital DesignDigital Design is a Russia-based IT consultancy offering a full range of IT services to ourclients in Russia and worldwide. We work with large and SMB companies from a varietyof branches including banking, logistics, transportation, manufacturing and public sector.We also work with ISVs and system integrators as a software development partner or asubcontractor for large-scale software development projects. The company is headquartedin St.Petersburg, with a local branch in Moscow. Since its inception in 1992 Digital Design hasbecome one of the largest IT providers in Russia with €15 mln.61

Participants of the surveyURLContact E-mailwww.directum.rupresent@directum.ruContact Phone +7 (3412) 505 500HeadquartersIzhevskYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout DIRECTUM100Delphi, C#DIRECTUMDIRECTUM Company is one of the leaders of Russian electronic document managementmarket. To intensify promotion, development and implementation of electronic documentand interaction management system a special department of NPO «Computer» wasestablished in to DIRECTUM Company in 2003.URLContact E-mailwww.domprog.cominfo@domprog.comContact Phone +7 (812) 320 2136HeadquartersYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout domprogSaint-Petersburg20C++, C#, Java, Pascaldomprogdomprog (Dom Programm Ltd.) was established in 2000 as an offshore softwaredevelopment company. We are located in St.-Petersburg, Russia. This place is being oftenreferred as the «Silicon Valley» of Russia. Our developers are skilled and trained softwareengineers graduated from the prestigious world-class St.-Petersburg Universities and haveexceptional experiences and skills. Solid educational background allows them to solve thetricky programming problems and to provide the customers with the top class products.URLContact E-mailwww.edsd.rumarket@edsd.ruContact Phone +7 (3842) 598 765HeadquartersYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout EdisonKemerovo12EdisonС++, С, C#, Delphi, PHP, Python, RubyEDISON is currently made up of a team of highly-qualified professionals who provide awhole range of software development and testing services for customers from a variety ofbusiness sectors. To date, we have completed hundreds of major projects. The maximumtotal labour contribution for one project has so far been 15 man-years. The proven quality ofour services creates an atmosphere of trust between us and our partners, while the practicalvalue and reliability of the products we create significantly improves our clients’ businesses.62

Participants of the surveyURLContact E-mailwww.elcomsoft.ruinfo@elcomsoft.comContact Phone +7 (495) 974 1162HeadquartersMoscowYear of Foundation 1990Number ofEmployeesProgrammingLanguagesAbout Elcomsoft25C, C++, AssemblerElcomsoftEstablished in 1990, ElcomSoft Co. Ltd (referred hereafter as ElcomSoft) is a privately ownedcompany headquartered in Moscow, Russia. Since 1997, ElcomSoft has been serving theneeds of businesses by delivering corporate security and IT audit products. The companyhelps law enforcement, military, and intelligence agencies in criminal investigations withits wide range of computer forensics products. ElcomSoft tools and products are used bymost of the Fortune 500 corporations, multiple branches of the military all over the world,governments, and all major accounting companies.URLContact E-mailwww.elecard.rusales@elecard.ruContact Phone +7 (3822) 492 609HeadquartersTomskYear of Foundation 1988Number ofEmployeesProgrammingLanguagesAbout Elecard170CElecardElecard is a leading provider of software and hardware solutions implemented on MPEG-2and AVC/H.264 video compression technology. Based on more than 20-year research ofmultimedia and network technologies, Elecard now offers advanced and cost-effectiveIPTV and DVB broadcasting servers and STBs. The IPTV product line comprises AVC/H.264encoders, VoD and TimeShift servers, DVB-IP video gateways, DVB-C, DVB-T and IP set-topboxes.Consumer and professional product lines feature software products for video editing,playback, conversion, and analysis on PC.URLContact E-mailwww.sqlmanager.netinp@sqlmanager.netContact Phone +7 (351) 261 9505HeadquartersYear of Foundation 1993Number ofEmployeesProgrammingLanguagesAbout ElectronicMicrosystemsChelyabinsk40DelphiElectronic MicrosystemsEMS /Electronic Microsystems/ is an Information Technology Company, one of its activityfields is software development. EMS was founded in 1993 and initially was specializing in thedevelopment of network applications, corporate databases and business automation toolsbuilt in multi-layer client-server architecture. Since 1999, EMS has concentrated on producingdatabase administration tools and utility applications for data management. The R&D centerof EMS is headquartered in Chelyabinsk, Russia. EMS also has headquarters in New York,Oxford and Stuttgart.63

Participants of the surveyURLContact E-mailwww.enterra.ruinfo@enterra-inc.ruContact Phone +7 (3852) 360 898HeadquartersBarnaulYear of Foundation 2001Number ofEmployeesProgrammingLanguagesAbout Enterra60PHP, JavaEnterraEnterra’s Mission is “To use our expertise and innovation to provide our customers with highendsoftware solutions on Time, on Point, on Budget!” Founded in 2001 Enterra currentlyis a multi-national software development company with offices based in: Tampa (USA),Walldorf (Germany), Barnaul, Moscow (Russia), Simpheropol (Ukraine).URLContact E-mailwww.equelli.cominfo@equelli.comContact Phone +7 (3812) 39 6489HeadquartersOmskYear of Foundation 2008Number ofEmployeesProgrammingLanguagesAbout Equelli90С++, Java, C#, PHP, Ruby, PythonEquelliWe are Equelli – an up and coming IT company providing IT outsourcing services worldwide.We currently employ over 90 software developers working in two offshore softwaredevelopment centers. It is in our plans to found two more development centers in 2010.Besides the great team of developers, we have a crew of analysts, and a testers department.The company started with 3 developers in August of 2008 and since that time we havegrown to be a successful and profitable company (the company’s revenue has increased upto about 1000% over the last half a year).URLContact E-mailwww.etnasoft.cominfo@etnasoft.comContact Phone +1 (718) 717 2700HeadquartersYear of Foundation 2002Number ofEmployeesProgrammingLanguagesAbout ETNASoftwareSaint Petersburg55C#, .NET, JavaETNA SoftwareETNA Software is a software development company focused on electronic trading and assetmanagement applications. ETNA offers a full spectrum of IT services from software design,development, implementation and testing to support and maintenance. Trading platforms,automatic trading systems and order routing solutions produced by ETNA are used by majorbrokerages in the USA and the UK.64

Participants of the surveyURLContact E-mailwww.exigenservices.cominfo@exigenservices.comContact Phone +7 (812) 327 9900HeadquartersYear of Foundation 1993Number ofEmployeesProgrammingLanguagesAbout ExigenServicesSan Francisco1700Exigen ServicesJava/ Java EE, C++, C#, PHP, COBOL, FortranExigen Services is an Inc. 5000 global IT company that provides a lower risk alternative toconventional application outsourcing. The company combines advanced developmentmethodologies with value-based project governance and performance-based contractsto mitigate outsourcing risks and provide a higher return on IT project investments. Since2000, Exigen Services has been a global leader in the use of distributed Agile methods forrapid and precise systems development throughout the banking, insurance, brokerage,healthcare, telecommunications, government and media industries.URLContact E-mailwww.fujitsu.comandrey.krehov@ru.fujitsu.comContact Phone +7 (843) 279 4909HeadquartersKazanYear of Foundation 2006Number ofEmployeesProgrammingLanguagesAbout Fujitsu RussiaGDC196C#, VB.NETFujitsu Russia GDCFujitsu Russia Global Delivery Centre (GDC) — the key organization department, deliversservices to Fujitsu Europe business in following directions: Application Services — servicesfor applications development and applications support; Infrastructure Services — services inremote infrastructure management and network operations; Test and Validation — servicesin test and validation and workplace services; Customer Services — dispatching and supplymaintenance, remote workstation management and hardware support.URLContact E-mailwww.learnware.ruhaper@learnware.ruContact Phone +7 (812) 380 8877HeadquartersYear of Foundation 1991Number ofEmployeesProgrammingLanguagesAbout HyperMethodIBSSaint-Petersburg30PHP, C++HyperMethod IBSHyperMethod IBS is one of the Russian leading developers of Software and solutions fore-learning, development of electronic training courses, training and personnel assessment.During the last few years, the platform of eLearining 3000 was set up and introduced inhundreds of institutions. Brief overview of some significant projects is presented below.Banks, retail chains, defense enterprises, institutions of higher education, colleges are amongthem and etc. The platform of eLearining 3000 has been translated into English, Kazakh,Armenian, Ukrainian, Czech, Farsi and other languages.65

Participants of the surveyURLContact E-mailIBA Groupwww.iba-it-group.com, www.ibagroup.euinfo@iba-it-group.comContact Phone +375 (17) 217 3952HeadquartersYear of Foundation 1993Number ofEmployeesProgrammingLanguagesPrague, Czech Republic2466C/C++/VC++, C#, Java, VB.Net, Cobol, ABAP/4, RPG/400, Fortran, Forth, Basic, Pascal,Smalltalk, Lisp, PLX, ADA, Prolog, Modula, PL/1, Natural, Ассемблеры для разныхплатформAbout IBA Group IBA Group is one of the largest IT service providers in Eastern Europe employing 2,500professionals. Headquartered in Czech Republic, its offices are in Belarus, the US,Germany, Cyprus, Russia and Bulgaria. Founded in 1993, IBA offers software development,migration, maintenance, 24x7 support, and IT consulting services with focus on mainframesoftware, enterprise applications, business intelligence, web solutions, SAP solutions, Lotustechnologies, and business intelligence. IBA Group serves clients in 30 countries acrossdiverse industries, including banking, railway, telecommunication, manufacturing, healthcare,trade, and public sectors.URLContact E-mailwww.ifiles.ruinfo@ifiles.ruContact Phone +7 (495) 960 7083HeadquartersObninskYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout iFiles20Java, PHP, C++iFilesiFiles is a company of Web solutions and Software development provider. We have anextensive experience in web-systems development more than 7 years. We partner withclients to provide sophisticated end-to-end technology solutions - from developmentconcept and strategy, architecture and design to the complete execution and launch ofcomplex initiatives.URLContact E-mailwww.informatic.ruinfo@informatic.ruContact Phone +7 (495) 957 7877HeadquartersMoscowYear of Foundation 1989Number ofEmployeesProgrammingLanguagesAbout Informatic30C++InformaticSince 1989 (the date of foundation) Informatic Ltd develops and implements software in thefields of linguistic technologies. Today Informatic is one of the topline developer of linguisticsoftware. Our products have won wide acclaim from customers, experts and softwareindustry professionals worldwide.66

Participants of the surveyURLContact E-mailwww.infotecs.rukokorev@infotecs.ruContact Phone +7 (495) 737 6192HeadquartersMoscowYear of Foundation 1991Number ofEmployeesProgrammingLanguagesAbout Infotecs120C/C++, C#, JavaInfotecsInfotecs (Information Technologies and Communication Systems), one of Russia’s oldesthigh-tech companies, was founded in 1989. At present, the company is a key player on theRussian VPN and TCP/IP security software market. Over the last sixteen years, the companyhas been developing its proprietary corporate networking and information protectionproducts and managing major projects aimed at building private and public communicationsnetworks.URLContact E-mailwww.innoworx.ruali@inno-worx.comContact Phone +7 (812) 764 0500HeadquartersYear of Foundation 2008Number ofEmployeesProgrammingLanguagesAbout InnoWorxSaint-Petersburg40PHP, JavaInnoWorxInnoworx is fast growing software and web development Company in Europe and MiddleEast. We specialize in high-end software and web development, employing hand-pickedspecialists and training them on a constant basis to sustain our quality and competencelevels. Our strategy is to build up a network of companies in Europe and Middle East thatsupport the near-shoring development process and utilize our flexibility in resource usageand our ability to adjust quickly to market movements.URLContact E-mailwww.inquartos.ruinfo@inquartos.ruContact Phone +7 (843) 294 7117HeadquartersKazanYear of Foundation 2004Number ofEmployeesProgrammingLanguagesAbout InquartosSoftware Ооо50C++, C#, WBA, Perl, BashInquartos Software ОооInquartos Software is a technology company based in Kazan, Russia. Since its foundation in2006, the company has focused its efforts on the development of custom software in thearea of data protection and centralized management of resources on corporate networks.67

Participants of the surveyURLContact E-mailwww.inrecolan.comInreco LANsergey.pyatigorskiy@inrecolan.comContact Phone +7 (4922) 444 090HeadquartersVladimirYear of Foundation 1989Number ofEmployeesProgrammingLanguagesAbout Inreco LAN60.Net, Java, MS VB, C++Inreco LAN is a software development outsourcing company, and we employ the combinedknowledge and experience of the team to help our clients become successful. InrecoLAN offers wide range of software development services from solving R&D tasks to plaincoding. Inreco LAN cares about its clients. It is our strong conviction that each project mustbe completed on time and on budget, with all features and functions originally specified.To ensure that, we work with our clients very closely and carefully, using well-structured,industry standard software development processes for each project.URLContact E-mailwww.insat.ruscada@insat.ruContact Phone +7 (495) 974 0092HeadquartersMoscowYear of Foundation 1988Number ofEmployeesProgrammingLanguagesAbout InSAT35Delphi, C#, C++InSATInSAT — private company, established in 1988. The basic company profile is: Softwaretools development for industrial automation — SCADA, SoftLogic, OPC; System integrationof industrial automation systems in Power, Chemical and others; Hardware and softwaredistribution for industrial automation; Custom and off-shore programming; Development ofprecision tensometric systems.URLContact E-mailwww.intel.ruigor@intel.comContact Phone +7 (812) 331 9430HeadquartersYear of Foundation 2004Number ofEmployeesProgrammingLanguagesAbout IntelSaint Petersburg100Java, C, C++IntelIntel Russia is composed of approximately 1,150 employees (including 166 interns) and hasoffices in Moscow, Nizhny Novgorod, Novosibirsk, St.Petersburg, and Sarov. In additionto sales and marketing divisions, Intel Russia is home to a large R&D center that employsapproximately 560 engineers. Since 1992, Intel has invested more than USD 800 millioninto the Russian economy, with a primary focus on Russian businesses. Through theseinvestments, Intel Capital gives Russian companies the opportunity to take advantage ofIntel’s wide scope of cutting-edge technology and experience.68

Participants of the surveyURLContact E-mailwww.intellect-inform.ruintellect-it@aaanet.ruContact Phone +7 (863) 242 2901HeadquartersYear of Foundation 1997Number ofEmployeesProgrammingLanguagesAbout Intellect-InformRostov-on-Don500C, C++, JОIntellect-InformThe consulting company «Intellect-inform Ltd. « is in the market of information technologiesfrom the end of the ninetieth years. The basic direction of activity of the company iscomplex maintenance of an information exchange of the enterprises on the basis ofintroduction of modern information technologies. Since 2003 « Intellect-Inform Ltd. « wasincluded in «I&I» Group. Specializations are: Development of the software, Informationbank systems; Information control systems of the enterprise; System of electronic documentcirculation; IT-consulting.URLContact E-mailwww.ifrigate.rumain@ifrigate.ruContact Phone +7 (8635) 224 110HeadquartersYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout Internet-FrigateRostov-on-Don28Internet-FrigateC#, ASP.Net, PHP, C++, ActionScript, Java, Perl, AjaxDevelopment of internet-sуstems: from web-sites and social networks to businessprocessautomation systems and e-commerce systems. Web-modules with CMS forcustomer relationship management systems (CRM), sales force automation systems (SFA),systems of electronic documents circulation automation, collaboration systems, geoinformationalsystems (GIS), mobile solutions. Industry experience: logistics, transport andtourism, information services and telecommunications, trade and marketing, government,entertainment and edutainment.URLContact E-mailwww.intsoft.spb.ruinfo@intsoft.spb.ruContact Phone +7 (812) 579 3637HeadquartersYear of Foundation 1994Number ofEmployeesProgrammingLanguagesAbout IntsoftSaint-Petersburg10C#, JavaIntsoftINTELLIGENCE-SOFT is an offshore software development and IT consulting companywith headquarters and software development center located in St.Petersburg, Russia. Ourcompany provides custom application and database development, web programmingand graphic design services to customers worldwide. Since 1994 INTELLIGENCE-SOFTsuccessfully operates at the offshore software development market providing our customersfrom Western Europe, USA and Canada with reasonably priced high quality softwareproducts and services.69

Participants of the surveyURLContact E-mailwww.isd-co.ruinfo@isd-co.ruContact Phone +7 (499) 408 4789HeadquartersMoscowYear of Foundation 2001Number ofEmployeesProgrammingLanguagesAbout ISD Co.17C++, C#ISD Co.Our main business is the development and installation of programming products that helpthe traditional “brick-and-mortar” businesses to move to the realm of the Internet. ISD Co.specializes on building ERP solutions for enterprises and it offers the whole spectrum ofservices from optimization of business processes to consulting, to securing and installation ofhardware and software, programming development, Internet/intranet solutions, outsourcing.URLContact E-mailwww.kg.rumail@kg.ruContact Phone +7 (846) 272 3202HeadquartersSamaraYear of Foundation 1997Number ofEmployeesProgrammingLanguagesAbout KnowledgeGenesis90C#Knowledge GenesisSoftware Engineering Company “Knowledge Genesis” is a privately owned company withheadquarters in Samara, Russia (see on Map), one of the modern aviation and airspacecenters of Russia. Founded in 1997, today we are a team of more than 60 professionalsin new information technologies able to provide advanced technologies and solutions incombination with high quality and low-cost outsourcing services in for IT industry. We haveimplemented and work according to the quality management system (ISO 9001:2000) andprovide enterprise-ready solutions according to highest standards of IT industry.URLContact E-mailwww.krug2000.rukrug@krug2000.ruContact Phone +7 (8412) 556 497HeadquartersPenzaYear of Foundation 1992Number ofEmployeesProgrammingLanguagesAbout KRUG150C#, C, C++KRUGFounded in 1992, today SPC «KRUG» is one of outstanding engineering companies in Russiain industrial automation field. SPC «KRUG» is creator and supplier of modern industrialautomation systems and branch solutions. Using uniform hardware and software, adaptedfor Russian standards, in designing and producing allow to decrease total cost of ownershipfundamentally and to provide high level of saving rate from our production.70

Participants of the surveyURLContact E-mailwww.ledas.cominfo@ledas.ruContact Phone +7 (383) 335 6504HeadquartersYear of Foundation 1999Number ofEmployeesProgrammingLanguagesAbout LEDASNovosibirsk35C++, PHP, JavaLEDASLEDAS Ltd. is an independent software development company founded in 1999 inNovosibirsk, Russia. LEDAS provides computational components and services to itscustomers — PLM (CAD/CAM/CAE/PDM) and ERP software development companies andmanufacturing enterprises, using its core competence in mathematics, computer scienceand computer-aided design, solid experience in software development & 3D modeling,proprietary technologies, and advantages of its location.URLContact E-mailwww.medisa.cominfo@medisa.comContact Phone +7 (3812) 382 914HeadquartersOmskYear of Foundation 2007Number ofEmployeesProgrammingLanguagesAbout MIDISA Soft10C++, Visual BasicMIDISA SoftOur company is engaged in software development since 1995. Over the years, we havecreated a lot of different projects. Our projects are applied in various branches of business inmany countries all over the world. During recent years, our company holds leading positionon Russian software market.URLContact E-mailwww.mobitech.ruinfo@mobitech.ruContact Phone +7 (812) 333 1869HeadquartersYear of Foundation 2002Number ofEmployeesProgrammingLanguagesAbout MobitechSaint-Petersburg15С, С++, Java, Perl, PHPMobitechMobitech is a Russian software development company, founded in 2002 in Saint Petersburg.We develop software for cellular communications operators and employ it to furnish,integrate, and support combined hardware and software design solutions for clients. Ourteam of experts has unique experience in developing and integrating design solutionsfor cellular operators. All software that we furnish is the result of our own developmentefforts, which means we can modify it to suit your specific business objectives in the shortestpossible time.71

Participants of the surveyURLContact E-mailwww.nadosoft.cominfo@nadosoft.comContact Phone +7 (812) 427 3901HeadquartersYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Nadosoft LtdSaint-Petersburg52C/C++, JavaNadosoft LtdNadosoft company specializes in providing web and software development, quality controland consulting services including solution integration, migration between different systemsand offshore IT outsourcing to small and medium sized companies. We are a softwaredevelopment company which implements your business ideas as software solutions.URLContact E-mailwww.smartcard.ruinfo@smartcard.ruContact Phone +7 (495) 788 7922HeadquartersMoscowYear of Foundation 1991Number ofEmployeesProgrammingLanguagesAbout NCT300C, DelphiNCTNCT is a leading provider of customized business solutions based on advanced technologies,expert approach and highly qualified support. We deliver innovative software productsand equipment for fleet and banking card systems, retail automation and customer loyaltyprograms. Our solutions allow our clients to improve their business and better serve theircustomers. NCT was founded in Moscow in 1991 and presently unites over 300 professionalemployees working on domestic and international projects. Company’s quality managementsystem is certified under ISO 9001.URLContact E-mailwww.ntrlab.ruinfo@ntrlab.ruContact Phone +7 (495) 649 8936HeadquartersMoscowYear of Foundation 2000Number ofEmployeesProgrammingLanguagesAbout NTR Lab, Ltd80NTR Lab, LtdC#, C/C++, Coldfusion, CSL, Flash, Actionscript Java, Javascript/Ajax, PHP, VB.NET, VB/VBAOur founders recognized the opportunity offered by the convergence of the Internet andthe need for cost-efficient development of mission-critical solutions and founded NTR Labin 2000. They had a driving vision of creating an IT outsourcer that would combine Russianstrengths with the best of Western management style. NTR Lab’s headquarters is in Moscow,Russia. Additionally, we have development facilities in Tomsk and Novokuznetsk, Russia, withUS office in Washington State.72

Participants of the surveyURLContact E-mailwww.radixtools.ruinfo@radixtools.ruContact Phone +7 (4732) 519 497HeadquartersYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Radix-ToolsVoronezh30C++, PHP, Perl, PascalRadix-ToolsRadix-Tools was founded in 2003 and specializes in software development in the fields ofmicroelectronics, standard cell library characterization, geo-information, radio-monitoring,navigation, electronic publishing and information systems.URLContact E-mailwww.rd-software.comcontact@rd-software.comContact Phone +7 (812) 327 8636HeadquartersYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout RD-SoftwaveSaint-Petersburg15C, C++, C#, Java, RubyRD-SoftwaveRD-Software is a software development company. Our main focus is on the development ofcustom software for corporate customers. To this purpose a wide spectrum of developmenttools are used, enabling an optimal solution to our customers’ requirements. RD-Softwarewas established in Russia in 1997, followed in October 2001 by RD-Software GmbH inGermany. We have a presence in the IT market for over eight years. Companies in Germany,Finland, UK, Russia and USA benefit already from a partnership with us.URLContact E-mailwww.reksoft.cominfo@reksoft.comContact Phone +7 (812) 325 2100HeadquartersYear of Foundation 1991Number ofEmployeesProgrammingLanguagesAbout ReksoftSaint Petersburg364Java, .Net (C#), C++ReksoftReksoft is an expert offshore software development services provider with a key focuson telecommunications, hospitality & travel, and financial services sectors. Reksoft hasbeen delivering software outsourcing solutions for the past 19 years, winning a loyalcustomer base of such leading enterprises as Airwide Solutions, Dirol Cadbury, First DataInternational, Francotyp-Postalia, Fujitsu Siemens Computers, Mazda, Philip Morris, SpringerBusiness+Science Media, Swisscom Mobile, Tieto and T-Systems. Currently, the companycounts more than 400 employees and has its offices in 5 countries.73

Participants of the surveyURLContact E-mailwww.relex.rumarket@relex.ruContact Phone +7 (4732) 711 711HeadquartersYear of Foundation 1990Number ofEmployeesProgrammingLanguagesAbout RELEXVoronezh136C, C++, C#, Java, PHPRELEXRELEX Group has been successfully working on the IT market since 1990. The group,whose kernel is the production and research enterprise RELEX, Inc., includes severalcompanies each of which specializes in a particular field: Software development under theRELEX trademark; IT outsourcing and custom software development services; Softwaredevelopment for government organizations.URLContact E-mailwww.rtsoft.rurtsoft@rtsoft.ruContact Phone +7 (495) 742 6828HeadquartersMoscowYear of Foundation 1992Number ofEmployeesProgrammingLanguagesAbout RTSoft350C, C++RTSoftClosed Joint Stock Company RTSoft was founded in 1992. RTSoft company provides deliveryand integration of the wide range of baseline hardware and software as well as developssoftware for industrial, telecommunication, defense and specialized systems. Company’sspecialists ensure qualified technical support and professional consulting services. RTSoftspecializes in developing software for embedded systems and masters cutting-edgetechnologies in engineering and debugging software for both leading real-time operationalsystems and general assignment operational systems.URLContact E-mailwww.softmechanics.rucontact@softmechanics.ruContact Phone +7 (812) 320 2160HeadquartersYear of Foundation 1999Number ofEmployeesProgrammingLanguagesAbout Soft MechanicsSaint Petersburg15Pascal, C, PHPSoft MechanicsSoft Mechanics(Soft Mekhanika) was founded in 1999 and is dedicated to the developmentand installation of Ticketing Systems for entertainment enterprises and ticket networks.In spite of being a young company, we have a solid background and experience in IT forentertainment technologies and e-commerce. Our goals were defined few years ago,when a computerised ticket system «Teatral» was developed and applied. This system wasinstalled in The Mariinsky Theater in St. Petersburg. The «Teatral» is based on the TickedInformation Systems Technology, which was developed by our specialists.74

Participants of the surveyURLContact E-mailwww.softage.rucontact@softage.ruContact Phone +7 (383) 330 9655HeadquartersYear of Foundation 2003Number ofEmployeesProgrammingLanguagesAbout Softage LLCNovosibirsk30C/C++, Java, .NET, RealbasicSoftage LLCSoftage LLC is an US based offshore outsourcing software development Company providingin addition to web development, custom software development solutions.URLContact E-mailwww.sbconsulting.ruavs@sbconsгlting.ruContact Phone +7 (812) 783 3277HeadquartersYear of Foundation 2002Number ofEmployeesProgrammingLanguagesAbout SoftBusinessConsultingSaint-Petersburg10Delphi, Java, C#, PHPSoftBusinessConsultingSoftBusinessConsulting has been in the IT market since 2002 as an independent softwaredeveloper, rendering services of IT-outsourcing and consulting. Our Company is an officialpartner of some of the worlds leading software companies Oracle, Microsoft and Sybase.We are the official dealer of 1C company.URLContact E-mailwww.spectec.rusales@spectec.ruContact Phone +7 (812) 329 4560HeadquartersYear of Foundation 1991Number ofEmployeesProgrammingLanguagesAbout SpetsTekSaint-Petersburg50DelphiSpetsTekSpetsTek Ltd. Specializes at Development and implementation of TRIM-software package;Consultancy in the area of development and implementation of technical management andenterprise asset management (EAM) systems based on TRIM; Consultancy in the field ofbusiness process optimization; Development of CALS and ILS technology; Development ofB2B and B2G technology.75

Participants of the surveyURLContact E-mailwww.spiderproject.rusmt@spiderproject.ruContact Phone +7 (495) 926 4397HeadquartersMoscowYear of Foundation 1992Number ofEmployeesProgrammingLanguagesAbout Spider Project15CSpider ProjectSpider Project Team is a leading Russian project management consulting company.Company activities cover the following directions: Developing and implementing of projectmanagement systems; Project management training; Developing and selling of unique toolfor project management professionals - Spider ProjectURLContact E-mailwww.spiritdsp.com, www.spirit.rumarketing@spiritdsp.comContact Phone +1 (408) 540 6033HeadquartersMoscowYear of Foundation 1992Number ofEmployeesProgrammingLanguagesAbout SPIRIT DSP100SPIRIT DSPC, C++, Objective C, Java, Ruby, Perl, PHP, JavaScript, AssemblerSPIRIT DSP is the world’s top provider of carrier-grade voice and video communicationsoftware IP platform for telecom operators, OEMs and software developers. 200+ millionembedded voice channels in 80 countries are based on SPIRIT technology platform. SPIRITcounts among its direct customers Adobe, ARM, AT&T, Blizzard, BT, China Mobile, Cisco,HP, HTC, Huawei, KT, Microsoft, Oracle, Polycom, Skype, TI, Toshiba, Veraz, ZTE, and 250+others. VideoMost.com is the SPIRIT spin-off for multi-point video-web-conferencing service.SeeStorm.com is the SPIRIT spin-off for synthetic 3D video platform.”URLContact E-mailwww.star-force.ruinfo@star-force.ruContact Phone +7 (495) 967 1451HeadquartersMoscowYear of Foundation 1998Number ofEmployeesProgrammingLanguagesAbout StarForceTechnologies40C++, C#StarForce TechnologiesStarForce Technologies is the expert in software and digital content protection againstcopying, cracking and unauthorized use. For more than 10 years we have been successfullydeveloping and implementing an ultra-modern complete suite of technology means forcopyright and intellectual property protection worldwide. StarForce not only produces andsells software products, but at the same time today we market ourselves in the ability ofbeing reliable and responsible Technology partner for those who constantly incur a loss dueto computer piracy, unauthorized data access and information leakages.76

Participants of the surveyURLContact E-mailwww.stoikimaging.ruinfo@stoik.comContact Phone +7 (495) 225 1327HeadquartersMoscowYear of Foundation 1994Number ofEmployeesProgrammingLanguagesAbout STOIK Imaging20C++, C#, PHP, JavaSTOIK ImagingSTOIK Imaging is a Russian private company dedicated to image/video processing softwaredevelopment. Young physicists and mathematicians founded the company in 1994. Companyspecialization takes its origin from image processing and data acquisition software projectsmade in a frame of Soviet space program. Today the company is focused on developmentof commercial graphics software for consumer and professional markets.URLContact E-mailwww.ru.sun.comGrisha.Labzovsky@Sun.COMContact Phone +7 (812) 334 6000HeadquartersYear of Foundation 2004Number ofEmployeesProgrammingLanguagesAbout SunMicrosystems SPB,LLCSanta Clara, USA320Java, MySQL, С/C++, SolarisComputer software.Sun Microsystems SPB, LLCURLContact E-mailwww.synapse.rusynapse@synapse.ruContact Phone +7 (495) 434 3638HeadquartersMoscowYear of Foundation 1990Number ofEmployeesProgrammingLanguagesAbout SYNAPSE40C, C++SYNAPSEFor about 15 years SYNAPSE Science Center is at the market of seismological andgeophysical software for data acquisition, transmission and processing systems. Its portfolioconsists of dozens of products and R&D projects. Its application software and integrationsolutions work for universities, governmental agencies and private companies all over theworld.77

Participants of the surveyURLContact E-mailwww.transas.cominfo@transas.comContact Phone +7 (812) 325 3131HeadquartersYear of Foundation 1997Number ofEmployeesProgrammingLanguagesAbout UTIP SoftwareSt.Petersburg300+TransasTransas (TRANsport SAfety Systems) is a world-leading developer and supplier of a widerange of software, integrated solutions and hardware technologies for the marine industry.The company is a member of world maritime associations, international work groups andcommittees and participates actively in new maritime standards development.Today, thenumber of Transas employees worldwide exceeds 1500 people, while company’s productsare being distributed and supported by a vast network of representative offices in some110 countries.URLContact E-mailwww.utipsoftware.ruinfo@utip.ruContact Phone +7 (342) 260 9375HeadquartersPermYear of Foundation 2006Number ofEmployeesProgrammingLanguagesAbout UTIP Software15C++, DelphiUTIP SoftwareWe have founded our company in 2006. What for? Being a new player on the tradesoftware market, we are going to contribute to the existing innovative solutions forinternational financial market environment. The stuff made up of software specialists andhigh-class traders makes the basis for creation the breakthrough products. In creation theUTIP applications, we used the latest software engineering technologies and took intoaccount the needs of our potential customers: brokers oriented on the innovative businessschemes as well as traders whose principal demand is to maximize the profit.URLContact E-mailwww.winagents.comedvard@winagents.ruContact Phone +7 (8342) 231 788HeadquartersSaranskYear of Foundation 1999Number ofEmployeesProgrammingLanguagesAbout WinAgentsSoftware10C++, Delphi, JavaWinAgents SoftwareThe WinAgents Software Group are developers of software for all Windows platforms,including WinCE. WinAgents specializes in VoIP technology, network applications, WindowsNT/2000 services, COM/ActiveX technology, and database applications. We are experiencedplayers in the IT arena, with our first development project dating back to 1999.78