ISDEF: Russian software market to reach $7 billion in 2009
ISDEF 2008, the seventh annual Independent Software Developers Forum conference, took place September
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,
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,
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
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
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
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."
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