Beyond oil, Russia keen on tapping IT sector

Chennai, March 21 | Updated: Mar 22 2005, 05:47am hrs
Russia traditionally regarded as an oil economy is now looking at growing the countrys economy by diversifying into other industries. The Information Technology (IT) sector is one of the options that the country is actively considering.

Speaking on the sidelines of the international IT exhibition and conference, Indiasoft 2005, Hans Kuepper, associate director Ernst & Young, CIS region, said that Russia wanted to tap its human resources pool to foray into the IT sector. Russia has a well-educated population trained in the IT field. The country, however, has very few IT companies of global repute. Russias total IT market for 2003 was $6 billion. The virgin IT market in Russia presents a tremendous opportunity for global IT majors, he said.

Mr Kuepper said that experienced global IT majors could develop the IT market in Russia by establishing their presence in the country. This the companies could do by acquiring the Russian IT firms. Global IT majors can enter into the Russian IT market through the acquisition route. This is a very viable option for global IT companies since the cost of acquisition in Russia is 30% lower than the global evaluation, he said.

This apart, Russia offered some unique advantages for global IT majors including a low cost structure and proximity to the Western Europe region.