Continued Strain Imposed on Russia’s IT Sector

The IT industry in Russia is facing increasing pressure from Western countries, as sanctions against Russian companies continue to expand. In the latest round of sanctions, several large Russian IT companies were included for having licenses issued by the Russian IT regulator. This means that the majority of IT companies in Russia could potentially face further sanctions. As a result, many Russian IT businesses are urging the government to hide the register of IT firms in the country from public view. Additionally, global IT giants like Google and Microsoft have been withdrawing from the Russian market or reducing their presence due to legal issues and financial difficulties. The decline of Microsoft is particularly concerning for Russian businesses, as its products currently hold a market share of approximately 75% in Russia. Despite these challenges, the Russian IT sector has been able to withstand the pressure from Western sanctions. In 2022, the Russian software market even grew by 8.8%, although the overall IT market declined slightly. Analysts predict that the share of foreign companies in the Russian IT market will continue to decline over the next few years, with domestic players taking up a larger portion. However, this transition will require support from the government, such as soft loans and incentives for businesses to purchase domestic IT offerings. Other measures that need to be addressed include combating piracy and implementing stricter pricing controls. Additionally, the sector is facing a loss of skilled IT specialists, which presents a challenge in training new professionals in a timely manner.

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