Russia, the next hot IT destination?

 MUMBAI, INDIA: September 23, 2005 was the day when an Indian IT company made its debut in the Russian markets when Tata Consultancy Services (TCS) bagged a deal with National Depository Center (NDC), a Moscow-based entity.

At that point of time, N Chandrasekaran, global head (operations) TCS had mentioned, “The assignment with NDC is strategic from two perspectives. Not only does it reiterate the strength and relevance of TCS' asset-based solutions such as eClearSettleTM for global players in the securities industry, but also extends TCS' footprint in Russia which is one of the emerging markets in the world.”

That opened the floodgates not only for exploration in Russia but also setting up bases in lesser-known countries in Europe and South America.

An analyst with Angel Broking commented, “This had to happen because the US market is undergoing a saturation point and there is a need to build your base in other markets which are unexplored. Companies such as Intel, Google already have a base in Russia and it looks very viable at this point of time.”

Not just Indian companies, but global entities such as IDS Scheer too focuses more on the BRIC (Brazil, Russia, India and China) markets as stated by Daniel Sheahan, senior vice president, APJ, IDS Scheer.

“In 2007, we have put a lot of focus on BRIC (Brazil Russia China India) countries,” said Sheahan.

He also has a special mention for Russia. “We operate in Russia which has an economy growing at about 18 per cent of growth Year-on-Year,” added Sheahan.

On the flip side, with Russia gaining a lot of prominence, a few questions of concern arise. Sourabh Kaushal, industry manager, ICT Practice, Frost & Sullivan (South Asia and Middle East) cautions: “The language plays a big role and it is kind of a closed market but there is a huge potential, no doubt about that.”

While analysts agree to the fact that Russia would eventually become a hot destination for IT enterprises in the coming quarters, challenges of accruing quality labor and managing the language barrier would have to be handled effectively.

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