Microsoft proposes to renew – Kommersant

Russian representative offices of international companies and legal entities that have not fallen under sanctions receive offers from the American Microsoft to renew the license for its software. In total, according to Kommersant’s data, about 1,000 organizations received the letters. Market participants believe that this is how Microsoft is trying to maintain its presence in the market and reduce the level of piracy. Due to the lack of analogues for a number of products, companies that do not fall under the legal requirements of import substitution will continue to use American software, experts say.

Since the beginning of the year, a number of Russian representative offices of international companies began to receive letters or oral proposals from Microsoft to continue cooperation, a source in the IT industry told Kommersant. According to him, Microsoft does not want to lose Russian customers, so it does not close the Russian legal entity and is trying to find ways to continue supporting software and updating it. According to the source, about 1,000 Russian legal entities received such offers. Another interlocutor of Kommersant in the industry confirmed this information, according to him, Microsoft continues to cooperate with those companies that are not subject to US sanctions.

After the start of the military operation in Ukraine, Microsoft limited access to downloads of some of its products for consumers – in particular, we are talking about tools for creating Windows installation images (see “Kommersant” dated March 4, 2022). At the same time, Russian distributors of Microsoft solutions continue to sell license renewals for software already implemented in Russia.

In 2022, Microsoft Rus LLC fired almost all employees and terminated the existing lease agreement, follows from the explanations to the Microsoft Rus reporting for 2022. But the company notes that a decision to liquidate the structure is not being considered, as “compliance with government restrictions” in Russia makes its long-term plans uncertain. Microsoft did not answer “Kommersant”.

Chairman of the Russian-Asian Union of Industrialists and Entrepreneurs (RASPP) Vitaly Mankevich (who also confirmed that some companies in Russia received offers to continue cooperation with Microsoft) believes that the corporation is trying to establish a direct dialogue with Russian business: “As we see, the Western authorities are still do not put pressure on Microsoft to work in Russia. Microsoft is evaluating opportunities to return to the country.” According to him, Microsoft’s exit from the Russian market cost the company $125 million.

The company’s attempt to maintain a presence in Russia may be associated with reputational risks in the markets of other countries, says Lyudmila Bogatyreva, head of the digital solutions department at Polylog agency: “Seeing the company’s sharp refusal to work with local Russian business for political reasons, companies in other countries will be more wary regarding Microsoft. Ilya Zharsky, managing partner of the Veta expert group, believes that this gesture of the American company is a desire to retain some niches due to increased piracy in the Russian Federation: “Such letters are a guarantee that access to legal products remains open.”

There is still demand for Microsoft products among Russian businesses, and the software itself is supplied in boxed versions through parallel imports, says a Kommersant source among distributors. Of course, for some period Microsoft will be able to maintain influence on Russian business, since the vendor has a huge installation base, says Viktor Petrov, director of the IVA Technologies R&D center: “Some customers cannot migrate to other operating systems and office software due to lack of budget and comparable analogues”. But Mr. Petrov is sure that Russian companies will switch to domestic solutions because of the “vector” of the government. According to the presidential decree of March 2022, it is prohibited to use foreign software in the public sector and at critical information infrastructure facilities (banks, telecom operators, fuel and energy complex, etc.) from 2025, and from 2026, software and hardware systems.

Timofey Kornev