The overall climate in Russia is moderate. Russia is new in the field of offshore outsourcing. It is seen that the Russian outsourcing sector has grown to € 422 million at an annual rate of 60 percent.

Government support

Instead of providing valuable support, like any other country like India or China, Russian Government hinders development by a complex bureaucracy and restrictive tax, customs and immigration laws. Corruption and a lack of protection of intellectual property is still an issue. But still, there have been some improvements and positive signs in the last few years: the federal program Electronic Russia and the first IT park Vasileysky Island. Furthermore, in the recent years the development of offshore software programming has become a state priority task in Russia. Russian IT companies believe that the implementation of measures written into the Conception of the IT market’s Development in the Russian Federation can make Russia the world’s second country in the IT outsourcing market after India.

Labour

Russia has a large well-educated and low-cost workforce. Russian has more than one million specialists available who are capable of quickly joining the IT sector and who have excellent skills. Russia has about 20,000 professionals focused on IT exports at the moment.

Infrastructure

The infrastructure is poor except in major cities such as Moscow and St. Peterburg.

Education

There are a number of top universities and top research firms in Russia.

Cost advantage

Labour costs are moderate whereas infrastructure costs are high. Salaries for an IT programmer with 2-3 years experience range from more than € 6,000 to more than € 11,500 per year.

Quality

ISO certified companies are there but there are only 3 SEI/CMM certified companies.

Cultural compatibility

Cultural compatibility is still a problem.

Time / distance advantage

There are 9 different time zones in Russia. The time difference between Europe and European Russia is two hours, independent of summer or winter time.

English proficiency

Russia has less proficiency in English language. Top managers have a decent level of proficiency in English, but mid-level and lower-level staffs have less proficiency.

Regional IT cluster and suppliers

Cultural compatibility

The vast majority of Russia’s offshore software services firms are located in Moscow, St. Peterburg and Novosibirsk which are geographically and culturally close to Europe.