Software to new markets

Against the backdrop of Western sanctions, Russian software developers (software) began to reorient themselves to deliveries to African, Asian and Middle Eastern countries, the Russoft Association found out. And although interest in European markets among Russian companies has declined, they are not yet ready to leave them completely. Some developers for software sales in Europe and the US register legal entities in neutral countries.

Kommersant got acquainted with the results of a survey by the Russoft Association, which was conducted from February to May 2022 among 171 Russian software companies with a total turnover of about 100 billion rubles. From their answers it follows that after the imposition of Western sanctions due to the outbreak of hostilities in Ukraine, Russian software developers began to reorient the export of their products and services to the markets of South and East Asia, South and Central America and the Middle East.

According to the survey results, if in 2021 5.3% of domestic developers planned to enter the market of South and East Asia, then in 2022 – already 9.6%. In particular, Russian companies are interested in the Indian markets (7.4% of respondents plan to go there in the first half of 2022 against 2.4% for the same period in 2021); Uzbekistan (9.6% vs. 6.8%), as well as the countries of the Middle East (8.5% vs. 4.4%) and Africa (7.2% vs. 2.9%).

At the same time, Russian software developers are losing interest in the European and American markets. Only 3% of the surveyed companies plan to enter the European market in 2022 – a year earlier there were 7.8%, in Germany, for example, interest fell from 6.3% to 1.2%. Interest in the US and Canadian markets fell from 6.8% to 1.8%. It is noteworthy that Russian software companies are also apprehensive about the Latin American market: if in 2021 2.9% of companies showed interest in working in Brazil and Mexico, then in 2022 – 1.8%.

DZ Systems CEO Dmitry Zavalishin confirms the interest of Russian software developers in Asian, African and Middle Eastern markets. According to him, there are minor differences in requests for terms of reference from European and Eastern or Asian clients, but they are decreasing: “Ten years ago, Eastern customers were much more specific than today, up to the point that they required gold and oriental ornaments in the interface. “.

SimbirSoft COO Dmitry Peterson said that the company is already actively developing contacts with partners in new regions, including the Middle East and Latin America: “Like other colleagues, we are developing representative offices abroad, including in some regions of the CIS” . VisionLabs CEO Dmitry Markov notes that it is now more difficult for companies with Russian founders in the US and European markets, because mostly customers make a choice not in their favor.

At the same time, participants in the Russian software market do not intend to completely leave Europe and plan to work in this region through intermediary firms and representative offices. For example, DZ Systems Group plans to register a legal entity in a neutral country to sell software to Europe. But Dmitry Zavalishin notes that foreign banks refuse to open accounts for Russian clients without explaining the reason: “This is influenced by the fact that the scope of possible sanctions and their consequences are not fully understood.”

However, according to Andrey Krylov, director of the digital technology center at Modeling and Digital Twins JSC, despite the interest of a number of Asian and Middle Eastern countries in the products of Russian developers, domestic software will not be able to compete with Western software. He notes that the countries of the Middle East, which are themselves under sanctions, find ways to get around them and use Western software: software, but also re-examine it.”

Timofey Kornev