Software is more expensive than money – Newspaper Kommersant No. 54 (7499) dated 03/30/2023
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Russian software developers have raised prices by 30% to 50% over the year, consumers say, linking the trend to a lack of competition in a market that Western vendors have left. The developers themselves partly recognize the rise in prices, but more moderate. Large consumers of Russian software have already applied to the Ministry of Digital Transformation with a request to influence the situation, but so far without success. The rise in prices will continue and only the direct intervention of the regulator can stop it, experts warn.
Nikolai Ulyanov, deputy chairman of the board of Rosselkhozbank, told Kommersant that over the year since March 2022, prices for Russian software have grown by 20-40% year-on-year due to the lack of competition with Western vendors: “Now there is a limited number of suppliers on the market and almost endless number of consumers. The cost of Russian software products, including operating systems, has grown by 30-50%, Yuri Shvydchenko, director of technology practice at Technology of Trust (former PwC), confirmed that the situation is also associated with the departure of Western competitors: “The dynamics are especially noticeable in system software, office and enterprise management systems.
After the outbreak of hostilities in Ukraine, many large foreign developers have limited sales in the Russian Federation, including Microsoft, Oracle, Cisco and others. Rustam Rustamov, deputy general director of operating systems developer Red Soft, acknowledges that prices for “some products” have risen: “This is due to additional investment and an increase in staff.”
Representatives of STC IT ROSA (OS ROSA) and Astra Group (OS Astra Linux) claim that the prices have not changed. But Daria Zubritskaya, director of marketing and communications for the Raketa travel and expense management platform, objects that, on average, all domestic operating systems have risen in price by 15%, including those from Astra Group.
A representative of another developer of operating systems, Basalt SPO, admits a 10% increase in prices, but only for OS licenses, and not FSTEC-certified versions (finalized in terms of security), explaining it by “annual inflation”.
The interlocutor of Kommersant in one of the major consumers of Russian software said that due to the increase in prices for domestic solutions, he had to complain to the Ministry of Digital Development. A Kommersant source in a Russian software developer confirmed that the ministry had raised the issue, asking developers not to raise prices, since “the IT industry already enjoys a sufficient number of benefits and preferences.” Price control in the Russian Federation as a whole is not under the jurisdiction of the Ministry of Digital Development, this is handled by the FAS, another interlocutor of Kommersant in the IT market clarifies. The FAS did not respond to Kommersant’s request. The Ministry of Digital Development is aware of the rise in prices for Russian software: “The ministry is in contact with the industry and will take measures to resolve this issue.”
But the FAS cannot significantly influence the situation, says Lyudmila Bogatyreva, head of the department of digital solutions at the Polilog agency. She explains that, according to part 4 of Art. 10 of the Law “On Protection of Competition”, the prohibition on abuse of dominant position does not apply to the owners of the results of intellectual activity, which are IT companies: accepted.”
The main factor in the increase in prices for domestic software was the increase in the salaries of programmers for their retention in the country and training, difficulties in purchasing equipment, etc., emphasizes the director of the Association of Computer and Information Technology Enterprises Nikolay Komlev: “The lack of products from Western competitors and the mandatory import substitution only warm up this growth. Mr. Komlev believes that due to the lack of competition, Russian software may continue to rise in price “to comparable with foreign software” if the government does not intervene.
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