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    Software Development Outsourcing as a Driver of IT Market in Russia

    AT the end of the communism and the days of the planned economy the story of the Russian IT was began a years ago.   Thousands of highly-qualified engineers and scientists working in institutes on national defence and space exploration projects were left out of work, when the USSR collapsed. This created a unique market opportunity in the country:” a pool of highly-skilled technical personnel – engineers, software developers, system architects available for a very low price, sometimes for ten times less than the corresponding labour force in the West. For clients in the US and Europe, it was the ideal moment to launch an outsourced software development center.”    the 1990s saw many outsourcing companies established to meet the demand, Reksoft among them when the outsource did. They were high-tech islands in a sea of a turbulent domestic economy. Most of the outsourcing companies worked for foreign customers, from Western Europe and USA. This was because the software industry in Russia had undergone a great depression, and domestic demand for IT services was nearly non-existent.  In Russia it was a surreal atmosphere in the first capital was accumulated, public assets were plundered, crime and corruption flourished. IN the middle of the havoc “men and women with MScs and PhDs were solving the most complex software development tasks for international clients. These communities became a cornerstone of the Russian IT ecosystem. It was a Russian IT talent reservoir that gradually accumulated the deepest knowledge of programming technologies from local universities, and best practices learned through work and co-operation with world market leaders. This accumulated business knowledge was transferred to the local market.”  Giving birth to the new Information Technology, In a few years, many of them looked like private business incubators.  It was a two-pronged process: both the management of the development centers interested in good investments  nurtured the new projects  while their employees, looking for an entrepreneurship opportunity, created their own start-ups. Business knowledge accumulated in international projects, combined with the Russian engineers’ excellent IT skills and brought forth a tremendous harvest of local product IT companies.  Reksoft alone bore six start-ups.  from its crisis and the reviving domestic industry started to provide a stable, local demand for IT services the Russian economy recovered. The outsourcing companies have served the basis of the product sector and the development.  the software development companies now turned to Russian clients. Some of them merged or entered into partnerships with system integrators (SI). Some of them established their own departments of SI or IT consulting, pursuing the goal of creating a one-stop shopping point for the customer.  To the local market the process of shifting the International experience and the global best practices.  About a third of Russian IT outsourcing company revenue the local clients generated.  with the rest coming from overseas clients. 30% of the revenue from the local market is not much, which demonstrates that the market for outsourcing services is still developing here.  THis is also with the promises of the huge growth of the potential in the future. The International experience and Russian brains of the outsourcing companies will be demanded at home.  “With a volume of nearly $16bn and a growth rate of 17% in 2010 according to IDC, we expect a good share of the pie for outsourcing companies in the Russian market. We see something symbolic in it. The first Russian IT companies are coming home.”  This is to show the people that the outsourcing company has a big impact to the society and it helps the company to have a great and strong performance.

     

    Reference:

     

    http://itonews.eu/sofware-development-outsourcing-driver-it-market/

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