Russia’s software export kept growing while authorities developed import substitution strategy

In 2015 the Russian IT services market grew by an average of 9–10% in ruble amounts, according to an IDC report cited by Russia Beyond The Headlines, with a growing demand for business process automation software, cloud services, Big Data solutions, outsourcing and business analysis systems. According to industry association Russoft, the export of software and IT services in 2015 increased by 16% from 2014.

Such exports, which amounted to some $2.8 billion in 2009, are estimated to have reached $7 billion in 2015. In particular, Russian publishers of information security software are becoming increasingly visible on the world market, as exemplified by such companies as Kaspersky Lab, InfoWatch and Positive Technologies.

The decline of the ruble against the dollar helped software publishers develop and sell their solutions internationally, while the ruble-based cost of salaries decreased in relative terms.

A farewell to US software?

Meanwhile, the Russian government announced its import substitution strategy in the field of software. Preference is given to domestic products in government software purchases. The new rules are to be applied — as far as Russian software products can be competitive — in such fields as business applications, antivirus software, information security, and Internet servers in business environment, according to the preliminary plan announced in the spring of 2015.

The government’s import substitution strategy also aims to support the development of domestic enterprise software in segments where Russia is highly dependent on foreign products. Among the concerned segments are client and mobile operating systems, server operating systems, database management systems, cloud software and virtualisation, as well as user-defined office software. Such domestic software should be developed until 2025, according to the government’s plan, in collaboration with other countries, in particular the BRICS states.

The government also intends to support the national software industry in the fuel and energy industry, the construction industry, healthcare, the financial sector, and transport. In these and other fields, according to the plan announced in spring, the government plans to “raise smart investments” for industry-specific software within five years. State-owned development funds, software customers, universities and scientific institutions are to be involved in these plans.

In addition, the Russian government worked on updating its IT security doctrine to prevent information warfare, identity-theft and cyber-fraud more efficiently amid growing international tensions.

First measures

These perspectives began to materialize throughout the year, as exemplified by the following:

  • In November, Russian software company Parallels announced in November a project to develop a locally-built cloud computing platform to store data online. The new service aims to challenge existing US platforms such as Microsoft Azure and Amazon Cloud. Called ‘Rosplatforma,’ it will “become the foundation of Russia’s electronic sovereignty [and] a strategic export to countries seeking technological independence from the US,” Parallels claimed.
  • In May, the Russian ministry of communications instigated the project to replace Android and iOS, meeting with Finnish developer Jolla to discuss the creation of a new mobile operating system based on Jolla’s open-source Sailfish OS. The minister Nikolai Nikiforov, told the media that that he wants to see the use of non-Russian mobile operating systems drop to just 50% by 2025, up from its current market share of over 80%.
  • Under a law which came into force on Jan. 1, 2016, the state is not allowed to buy foreign software if there is an available domestic version.

The article was originally published on East-West Digital News as a part of the2015 in review series.

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