Prices for Russian software for 2023 increased by 10–20%
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Prices for Russian software have increased by 10–20% over the year, IT companies told Kommersant. Considering that last year the Ministry of Digital Development and major market participants signed a charter that limits growth to the formula “consumer price index plus 15%,” the rise in price does not look dramatic. Nevertheless, the Ministry of Digital Development is preparing another control mechanism – we are talking about creating an “ethics commission” that will consider complaints about price increases. Experts expect software prices to rise in 2024, emphasizing that the cost of developing and implementing programs is increasing.
In 2023, average prices for Russian software in the corporate segment increased by approximately 10–20%, Kommersant was told at the IT infrastructure competency center of the Croc company. The dynamics differ depending on the class of software and are largely due to the fact that vendors regularly release new versions of products, according to Croc.
The estimate of a 10–20% increase in software costs is confirmed by Tsifra Group, citing the rise in developer labor costs as the main reason.
The Association of Largest Software and Hardware Consumers, based on “data from open sources,” clarifies that “the average salary in this area increased by 20% in 2023.” The head of the association, Renata Abdulina, calls the increase in software prices in such conditions “natural.”
The Ministry of Digital Development believes that market participants are able to “independently develop the rules of the game and ensure civilized regulation of the pricing policy for the solutions being developed.” Last year, complaints from large software consumers about price increases of one and a half times led to the fact that large Russian software developers, after a series of meetings in the ministry, were forced to publicly sign a charter for self-regulation of software prices: price increases cannot exceed the consumer price index by 15% (see “Kommersant” dated May 2, 2023).
In 2023, the basic consumer price index, “excluding changes in prices for individual goods influenced by administrative and seasonal factors,” amounted to 106.83%, Interfax reported, citing Rosstat. Thus, developers on average did not break through the price ceiling.
But the Ministry of Digital Development says that they are still “discussing with associations the mechanism for dealing with possible requests from customers regarding pricing issues.”
We are talking about creating a special “ethical commission” on the basis of industry IT associations, explains Renat Lashin, executive director of Otechestvennoe Softa. It is expected that the commission will examine possible cases of inflated prices for software and, in some cases, agree on companies to increase the price of software above the formula defined by the charter.
Most often, Russian analogues used by the market are software developed from scratch, which required large expenses, recalls Igor Dusha, director of the portfolio of information security solutions at Nota Kupol (T1 holding). Suppliers of such solutions strive to cover development costs and include them in the cost of both licenses and technical support, as well as product implementation. In his opinion, therefore, the annual dynamics “looks logical.”
Managing Director of the Norbit company (part of the Lanit Group) Vladimir Vertogradov connects the dynamics of prices for software products with the fact that “vendors now do not give discounts even if implementation is mandatory, although previously they offered them when demand was low.”
Demand for Russian software is still increasing, but growth has “slowed down and stabilized,” notes Yuri Shvydchenko, director of the technology practice at Trust Technologies (formerly PwC, TeDo). As before, the situation is affected by the departure of Western vendors, difficulties with technical support for foreign solutions, import substitution and related legislative initiatives, the expert explains.
Software prices will continue to rise in 2024: there is demand in the market, and at the same time, development costs are increasing due to the ongoing shortage of personnel and competition for them, explains Yuri Shvydchenko. Also, according to the expert, in all market segments “there is one or another shortage of quality products and solutions.” To the greatest extent, Mr. Shvydchenko will clarify, the shortage is expressed in highly specialized niches, for example, in products for industrial automation.
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