ISDEF

ISDEF 2008, the seventh annual Independent Software Developers Forum conference, took place September 26-29 at the Holiday Inn Vinogradovo. The conference served as a forum for discussing growth strategies in the software businesses, the challenges of marketing and public relations in the IT sector, and the legal and managerial aspects of operating an IT company. Also, for the first time in ISDEF history, an investment section was held to attract investors to Russian IT projects.

Over 350 managers and owners of software and IT companies from Russia, Ukraine, the Baltic States, the U.S., Germany and France attended the conference. Companies from 20 Russian cities, including Moscow, Saint-Petersburg, Novosibirsk, Perm and Kaliningrad, represented their country.

During the conference, participants discussed questions related to the development of the software market, including startups and strategies for entering established markets, business development tactics and the problems fast-growing companies experience, the managing of human resources and staffing needs in the IT industry, software sales and marketing techniques, and the legal aspects of operating a software company in Russia and abroad. Several leading Russian IT companies presented reports, including 1C, Kaspersky Lab, Ashmanov and Partners, InfoWatch, Famatech, 1C-Bitrix, Alawar Entertainment, Softkey, PROMT, Parallels and others.

The participation of representatives from federal agencies in the section covering government regulation shows the state considers the IT industry one of the key segments of the innovation-based economy of the 21st Century. Specifically, the top managers of four major Russia IT associations (ISDEF, RUSSOFT, NPSS and ICTIA), along with government representatives, attended a roundtable session during the conference. The latter reaffirmed their willingness to cooperate with Russian software developers. Professional IT associations that are in a position to share the opinions of other market participants will play a fundamental role in this process.

The pivotal point of the conference was an investment session attended by over 10 investment funds, including ABRT, AddVenture, Almaz Capital, Apaxys, Intel, Delta Capital, Oradell, ValueTech Advisers, ROSNO Alliance, VTB and Finam, as well as private investors. Unlike traditional theoretical roundtable meetings, this section was focused on reaching practical goals. Investment fund representatives conducted one-on-one negotiations with the top managers of 20 software companies seeking external financing. The companies presented 15 software projects, three Internet ventures and two games.

ISDEF chairman and Alawar CEO Alexander Lyskovsky said investors found the event format compelling. "In the past, we watched a large number of presentations one at a time and then discussed them behind closed doors. This time, banks and investment fund reps were able to talk with presenters and ask questions about revenue projections and general costs — things not commonly discussed in public. We're sure the new format will help software businesses and investors find each other and reach a point of cooperation more efficiently." Since it can take up to 18 months to close a deal from the initial point of contact between an investor and a prospective partner, ISDEF is unable to report the results of the session at this time.

"Investments in the Russian IT industry last year reached about $1 billion dollars," said Lubov Simonova-Emelyanova, head of IT strategy and business development at FINAM. "The IT market is currently very lucrative in terms of revenue and growth potential. Moving forward, separate sessions at large events will provide the most effective format for interaction and enable investors to review projects, discuss them and make the right decision within a short period of time."

Another highlight of ISDEF 2008 was the presentation of independent research focused on the Russian retail software market. According to experts, the market produced $3.7 billion in revenues in 2007, while the turnover of Russian companies abroad was $1.7 billion. Experts expect the national software market to grow to $5 billion in 2008 and $7 billion in 2009. Lyskovsky confirmed that the information ISDEF collected matched the results of similar research RUSSOFT and SoftKey carried out.

According to Famatech CEO Dmitry Kurashev, the task of objectively estimating the actual size of the software market wasn’t easy, as most companies don’t release their financial data. "Only the market participants themselves could estimate the market, but we did it," said Kurashev.

According to ISDEF, the division of software sales in Russia is as follows: corporate clients purchase 65 percent, government agencies buy 20 percent and individuals acquire 15 percent.

Commenting on these numbers, Felix Muchnik, CEO of SoftKey, said women were vital to the growth of the market. "Three years ago, female consumers accounted for only 13 percent of the overall sales volume. Today, their share is 29 percent. While women account for 50 percent of software sales in western countries, a 100 percent increase in the number of women purchasing software in Russia is a colossal improvement. The Russian software market is finally becoming consumer-oriented."

For additional information, please contact the ISDEF conference press office:

Tatiana Chernova
Phone: + 7 913 905 55 43
Email: isdef2008@isdef.org

About ISDEF
http://www.isdef.org

Created in 2002, the non-profit Independent Software Developers Forum focuses on representing and protecting the interests of software developers and other players on the IT market. ISDEF unites independent software developers, registrars, software distributors, representatives of software archives and other members of the software industry.
The main goals of the association are: improvement of the software development and implementation process; growth and development of the software e-commerce industry; and strengthening of the position of Russian developers on the international software market.