Russian programmers are predicted 15% of the world market. But there are nuances

Alexander Dybin

Russian programmers lost up to two billion dollars in 2022 due to the mass exodus of Western companies from the country.

Such data is provided by the president of the non-profit partnership of software developers "Russoft" Valentin Makarov."This is 25% of the total total volume of foreign sales of software companies by the end of 2021," he says, "at the same time, the companies remaining in Russia planned to increase exports by at least 5-10%.

As a result, preliminary calculations indicate that the total exports of software companies totaled from $8.4 billion to $9.2 billion with a drop of 8-17%. The total turnover of the industry is likely to have decreased, but only slightly. In 2021, it was 1.56 trillion rubles. The decline in export revenues was largely offset by the growth of sales in Russia due to import substitution."

In 2022, it became more difficult to track the movement of money in this area, since Russian companies that continued to work with Western clients brought sales departments to neutral countries and how much money is returned in Russia by such detours is not fully clear.

On the other hand, our companies actively explored the markets of friendly countries. The most active Russian software companies are in Uzbekistan, the UAE and India, sales volumes to Latin America have increased significantly.

"Latin America has grown 4-5 times," says Valentin Mkarov, "far away, but there is the right attitude of people. They hate Americans, these people once hoped for the USSR and now hope for Russia. There is a lot of interest in East Asia. For them, we look like a source of digital independence. On the example of the same India, half of them belong to America, and half want independence. Both from America and from China. For us, this is a window of opportunity. Become a world-class player. Not to compete with China, but to create a kind of digital socialism".

Speaking about the prospects of the Russian IT industry, experts note that our country could occupy up to 15% of the world market.

But so far, at least two things are hindering this triumph. First, and paradoxically, import substitution. The course to replace foreign equipment and software was announced back in 2014, but this process did not go quickly until 2022. Last year, Russian analogues were needed by everyone at once. And several problems came out at once. For example, state-owned companies and government agencies want to get Russian software, but they are not ready or cannot buy iron, they want to modify it on old equipment, as long as its resource allows. Here there is a conflict of compatibility of Russian programs with the remnants of imported systems, and with each other. The industry suggests not insisting on the mechanical replacement of one software with another, but asking to allow a gradual transition. This process is also called "migration".

"We are faced with the problem of incomplete compatibility. The application application on Windows is more functional than on the Russian operating system, - Rustam Rustamov, Deputy General Director of Red Soft. - There is a problem of compatibility with state information systems, when it is impossible to submit reports without Windows. We need a kind of "sandbox" to test the compatibility of various domestic systems and software".

The second serious problem is insourcing, when large state–owned companies begin to develop software for themselves. This leads to the fact that 2-3 companies are trying to solve the same problem, which take valuable personnel from the market. At the same time, if this task were performed by third-party companies, they would make more competitive software.

Another difficulty is the shortage of personnel. And it's not about the outflow of programmers frightened by mobilization. Russian companies did not have enough IT specialists until 2022.

"This is the right message that specialists have left, it is not so," says Valentin Makarov, "some categories have left, often forced. For example, exporters have taken out sales centers to continue working. Foreign companies that had development centers in Russia simply forced their staff to relocate. And some small part was afraid of mobilization".

In addition, there are legal restrictions, there is simply no regulatory framework for the most advanced developments and it is not clear how to implement artificial intelligence and software for quantum computers that are about to appear on the market.

"Unmanned transport, telemedicine, fintech – all this will reign for the next 50 years, but it does not have regulation yet and requires a regulatory framework", - says Valentin Makarov.