The Russian IT software and services market is expected to witness a substantial decline in growth throughout the duration of the coronavirus outbreak. Cancellations or delays of new orders, and concerns over employee health safety during the pandemic are key factors, negatively impacting market growth. The slowdown of the Russian economy will hurt small and medium IT enterprises substantially.
The market is expected to register a strong growth of 7.2% in its CAGR during the projected period to reach US$ 8,628.2 million by 2020. Both the IT software and services segments made considerable contribution to the overall growth of Russian IT market in the European region. Increased e-government and e-banking initiatives by governments and banks are some of the prominent factors driving the demand for IT software and services in Russia. Also, introduction of new technologies for enterprise mobility and big data analytics by key players such as IBM, SAP and IBM are expected to boost the market growth, thereby increasing competitiveness in the market. The banking, communication, media and entertainment, and manufacturing sectors owe a significant contribution to the Russian IT software and services market.
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The Anticipated Impact of COVID-19
Across the Russian IT software and services market, the coronavirus pandemic has resulted in suspension of key decision-making activities in addition to cancellation of development and service contracts. Regional and international travel restrictions are also expected to hold back market developments in the near term. Economic uncertainties will influence the market throughout 2020. Gradual recovery is likely in 2021 as business restrictions are relaxed.
“The Russian IT sector is witnessing a transition to software-as-a-service (SaaS), which reduces upfront costs and bolsters access. Consequently, purchasing power of IT consumers goes up. Major manufacturers are also increasingly preferring SaaS business models as the industry shows interest in open source and cloud computing software,” says the FMI analyst.
Russian IT Software and Services Market – Key Takeaways
- Cloud services are highly popular in the Russian IT software and services market, supported by growth of e-commerce activities.
- Virtual assistant tools are rapidly gaining traction, aided by the widespread penetration of smart devices in the region.
- IoT applications are gaining ground as Russia invests in Smart City projects including energy, utility, and transport applications.
- Western Russia is a key hub in the IT software and services market, aided by the presence of key developers.
Russian IT Software and Services Market – Key Driving Factors
- Favorable regulation frameworks controlling the Russian IT software and services market is a major growth factor.
- Widespread penetration of internet services in the region bolsters adoption and development rates.
- Advances in IoT and cloud services are key factors aiding growth of Russian IT market players.
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Russian IT software and services Market – Key Constraints
- Widespread cost cutting by clients for IT services is a major restraint on revenue growth.
- Slowdown of the Russian economy hinders critical market developments.
Competition Landscape
Major players in the Russian IT software and services market include but are not limited to I-Teco, Microsoft Corporation, Asteros, Oracle Corp., Compulink Group, SAP SE, LANIT Group, IBM Corp., Hewlett Packard Company, and IBS Group. Leading players are focusing on long term service contracts to sustain revenue. For example, BestPlace is providing Malaysian retailers software services from 2020.
Table Of Content:
1. An Overview of Economy
2. An Overview of IT Market in Russia
3. Russian IT Market Value Forecast ($ Mn) and Y-o-Y Growth (%), 2013 – 2020
4. An Overview of IT Market in Russia by Verticals
5. Major IT Topics in Russia
6. Key Market Outlooks
7. Competitive Landscape