Sanctions Lead Russian Software Developers to Pursue Emerging Markets

The export volumes of Russian software and development services climbed from 10% to 12% in 2017 reaching $8.5 billion, Kommersant reported citing data provided by the Russian Software Developers Association (RUSSOFT).

The anti-Russian sanctions have hurt Russian software sales in the United States and the European Union, which made developers shift to developing countries, the report notes.

“In the United States, the sanctions have affected the sales of software in IT security, financial technologies and deliveries to the public sector,” says RUSSOFT President Valentin Makarov.

The biggest supplier, Kaspersky Lab, reported that its revenues in North America had dropped by 8% in 2017. In contrast, its sales increased by 8% globally thanks to growth in Russia and Commonwealth of Independent States (CIS) countries (34%), in the Middle East, Turkey and Africa (31%), in Latin America (18%) and in the Asia-Pacific region (11%).

According to Makarov, business trips to Southeast Asia and Arab countries started becoming more frequent last year. That means that so-called third world markets will accelerate Russian software developers’ growth in 2018, and Makarov estimates that market volume could generate 14-percent growth reaching $9.7 billion.

Exports have increased because many Russian software developers open offices around the world, according to Darya Abramova, Marketing Communications & Operational Marketing Head at Orange Business Services.

“Big corporations are willing to open their own R&D centers. In addition, more and more projects have recently come from Asia,” she pointed out.