The market is anticipated to increase rapidly during the anticipated period, with a CAGR of 7.2 percent, reaching US$ 8,628.2 million by 2020. The segments of IT software and services contributed significantly to the expansion of the Russian IT market in the European region.
The need for IT software and services in Russia is being driven by an increase in e-government and e-banking activities by governments and banks, among other important causes.
The Russian IT software and services market is expected to witness a substantial decline in growth throughout the duration of the coronavirus outbreak. Cancellations or delays of new orders, and concerns over employee health safety during the pandemic are key factors, negatively impacting market growth. The slowdown of the Russian economy will hurt small and medium IT enterprises substantially.
Russian IT Software and Services Market — Key Takeaways
- Cloud services are highly popular in the Russian IT software and services market, supported by growth of e-commerce activities.
- Virtual assistant tools are rapidly gaining traction, aided by the widespread penetration of smart devices in the region.
- IoT applications are gaining ground as Russia invests in Smart City projects including energy, utility, and transport applications.
- Western Russia is a key hub in the IT software and services market, aided by the presence of key developers.
Russian IT Software and Services Market — Key Driving Factors
- Favorable regulation frameworks controlling the Russian IT software and services market is a major growth factor.
- Widespread penetration of internet services in the region bolsters adoption and development rates.
- Advances in IoT and cloud services are key factors aiding growth of Russian IT market players.
Russian IT software and services Market — Key Constraints
- Widespread cost cutting by clients for IT services is a major restraint on revenue growth.
- Slowdown of the Russian economy hinders critical market developments.
The Anticipated Impact of COVID-19
Across the Russian IT software and services market, the coronavirus pandemic has resulted in suspension of key decision-making activities in addition to cancellation of development and service contracts. Regional and international travel restrictions are also expected to hold back market developments in the near term. Economic uncertainties will influence the market throughout 2020. Gradual recovery is likely in 2021 as business restrictions are relaxed.
Major players in the Russian IT software and services market include but are not limited to I-Teco, Microsoft Corporation, Asteros, Oracle Corp., Compulink Group, SAP SE, LANIT Group, IBM Corp., Hewlett Packard Company, and IBS Group. Leading players are focusing on long term service contracts to sustain revenue. For example, BestPlace is providing Malaysian retailers software services from 2020.