IBM Global Services Exec Offers Glimpse into Russian Market

By Stan Gibson  |  Posted 06-15-2006
MOSCOW—The rapidly developing Russian economy presents the Moscow office of IBM Global Services with plenty of challenges as executives there seek to convince Russian IT managers that outsourcing has its place in the IT landscape.

"We were missionaries a few years ago," said Sergey Yaskevich, global services director for IBM East Europe/Asia, explaining that at first, Russian companies were averse to outsourcing because they believed it was best to retain control of their IT resources.

"But now they're interested," said Yaskevich, although he said they're not yet to the point of signing up.

IBM's On Demand initiative also has been slow to take off in Russia, because high-speed Internet backbones have been scarce.

"IT as a service may start to catch on once the bandwidth is there," said Yaskevich. Those factors mean that in Russia, IBM Global Services generates only one quarter of IBM's total revenue. In contrast, IGS is responsible for a little more than half of IBM's revenues worldwide.

As Russian energy heavyweights Gazprom and Lukoil globalize, they present an opportunity to a global services firm like IGS, said Yaskevich.

But perhaps more important, strong oil and steel industries are generating big tax dollars, which have given rise to several major government initiatives on which IBM hopes to bid.

"Putin just announced several major projects: health care, infrastructure and education," said Yaskevich.

Click here to read more about outsourcing in Russia.

"Taxation is now working in Russia," he added, contrasting the present with the early years of the Russian Federation, immediately following the collapse of the Soviet Union.

However, he noted that for a multinational company like IBM, some government business is off limits, as the federal department of defense and security services only do business with native Russian integrators.

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