Russia has several widely known strengths when comes to strategic IT sourcing and application development: elite university system, highly skilled workforce, capability to solve complex technical problems, cultural proximity to the West, etc.
Russian students successfully perform on different contests on information sciences and world championships in programming. They dominate on the majority of international programming competitions. On the prestigious programming championship among students organized on a yearly basis by Association for Computing Machinery – «ACM Programming Collegiate Contest» – the teams of Russian universities have been taking the leading positions since the end of the last decade. Since then results only improved (see details).
In today's multisource environment, Russia is ideally positioned as a destination for high-end software development. Strong educational system with focus on science and math, paired with solid analytical skills of Russian programmers and low attrition rate, allow Russia to successfully compete in the areas of application development, product engineering and embedded systems design. Dmitry Loschinin, President and CEO, LUXOFT “In fact, more people work in R&D in Russia than in any other country in the world.” American Chamber of commerce in Russia,2003
Russia's telecommunications system is in the midst of the global telecommunications revolution. The country's phone system has undergone significant changes since the breakup of the state phone monopoly in 1990. By 2000, there were over 1,000 companies licensed to offer communication services. During this period access to digital lines has improved, particularly in urban centers. Internet and e-mail services are now widespread and rapidly improving. In a few short years, Russia made significant progress toward building the telecommunications infrastructure necessary for a market economy.
Worldwide, Russia has the third-largest pool of engineers, mathematicians, and scientists per capita. Many universities, mainly in the major cities, offer a steady stream of technical graduates.
Political and legislative changes are beginning to exert a positive influence on the Russian offshore software development industry. The Russian government is planning to introduce tax privileges for software developers and IT specialists. Russian IT entrepreneurs could learn how to successfully run their businesses at foreign companies' development centers and then set out on their own and promote their owned licensed software products Currently, more than 250 Russian-based companies are active in offshore software development. The major software development centers (Moscow, St.-Petersburg, and Novosibirsk) have adequate telecommunications infrastructures. The leading Russia-based software companies have 200+ permanent staff, established quality assurance teams and are building their presence in the USA and Western Europe by opening sales and marketing offices.
There is no doubt the Russian software industry has the potential to develop into a major part of the country's economy, and experts are now concerned about how the industry should evolve. One development model, called the Indian model, focuses on pure offshore programming, or selling individualized services to Western companies. The second, often referred to as the Israeli-Scandinavian model, focuses on developing licensed software. One inherent problem in Russia - is the creativity of individual programmers. We think the market will show where the demand is and what segment Russians are particularly successful in.