IT & SoftwareOpportunities in Moscow

http://moscow.e-regulations.org/OCO Global

Contents

1. Why invest in Moscow 3

2. ICT sector: Overview 6

3. Moscow’s location advantages 12

4. Contact us 19

Why invest in Moscow?

Critical investment drivers Economic overview

Moscow has the largets concentration of skillful human resources

Over 250,000 people active in knowledge-intensive services – one of the largest concentrations in Europe

Over 150,000 people employed in computer related activities - more than in Budapest, Bucharest and Prague combined

Almost 8,000 students in Computer sciences are graduated each year – highest number in Eastern Europe

Moscow offers the best of Russian R&D heritage

Over 30 researchers per 1,000 employment – higher than in Bangalore and Budapest

Over 50 Universities with IT specialised research groups – twice as high as in Bangalore

USD 1.4 billion expenditure on R&D – more than double than in Bangalore

Take advantage of Moscow’s growing IT & Software industry

Almost 1,000 IT & Software companies are active in Moscow

Moscow is the leading location in Emerging Europe for FDI projects in IT & Software

Join IBM, Google, Cadence, Cisco Systems and other companies that have already invested in Moscow!

Moscow has modern, first class infrastructure

Over 150 international destinations served from two airports

9 international schools

4.4 million Internet users

1.2 million Broadband subscribers

Why Moscow?

Why Moscow? Economic overview GRP: US$ 1.7 billion GRP growth: 9% Per capita GRP: US$ 15,200 Inflation: 11.9% Population: 10.43 million Employment: 8.48 million Unemployment rate: 1.1% 3 airports serving around 160 international

destinations Broadband subscribers: 1.2 million

Sources: Goskomstat, 2006; Moscow Government, 2006; ONG Guide, 2006; Reksoft, 2007

ICT Sector

Key facts Leading players Research capacities Success cases Business associations

ICT Sector –Kew Facts

Market size: US$ 17.3 billion in 2007

Growth rates: 20-25% annually

Export: US$ 1.5 billion in 2006 (> 50% increase compared to 2005)

Local enterprises: Around 1,000 companies

Market segments: Hardware (68%), IT services (20%), software (11%)

Counterfeit: Share of counterfeit software products has been dropping by 4-5%

per year

IP Regulations: On January 1, 2008 Russia enacted new copyright laws (the

Criminal Code's Part 4) that fully conform to world standards

IT Infrastructure: Fastest growing Internet population in Europe; 9th fastest growing Broadband market

Key investors*: Google, IBM, LogicaSMG, Intel, Cisco Systems, Cadence

Sources: IDC; Reuters; Dun & Bradstreet; OCO Monitor* In Moscow

ICT Sector – Leading players

National Computer Corporation (NCC) – Established in 1991 in Moscow. The largest domestic player in terms of turnover (US$ 1.1 billion in 2006). It employs over 2,000 staff in its 24 offices with 18 being in Russian regions. NCC comprises of 5 leading companies in different IT segments and therefore provides a comprehensive solutions to its customers. www.ncc.ru

TechnoServ A/S – Founded in 1992 in Moscow it is the largest system integration company with expertise in IT services and engineering facilities. Strategic alliances with IBM, HP, Sun Microsystems, SAP, etc. The company employs 1,500 people in its 5 regional offices and representations in Ukraine and Kazakhstan. www.technoserv.ru

Laboratory for New Information Technologies (LANIT) – Established in 1989. Main business focus – distribution of hardware/software: Best Distributor of UGS in Russia Award, major distributor of DIEBOLD in EMEA, Microsoft Certified Partner for Learning Solutions, etc. Over 3,000 staff and the network of 6 regional companies and representations in Kiev and Alma-Aty. www.lanit.ru

Kaspersky Lab – major developer of security software in Russia. Kaspersky Lab is headquartered in Moscow, Russia and has regional offices in the UK, France, Germany, the Netherlands, Poland, Japan, China, Korea, Romania and the United States. Data security contracts with Airbus, BBC, Tatneft, France Telecom, etc. www.kaspersky.com

IBS Group – Founded in 1992 in Moscow. Comprises IBS and Luxsoft companies. Luxsoft is the largest Russian provider of high-end IT outrsourcing solutions with 4 R&D centers in Russia. Luxsoft recently opened a delivery center in Vietnam – first example of an Eastern European sofware company establishing a presence in this market. www.ibs.ru

ICT Sector- Research Capacities* Faculty of Computational Mathematics and Cybernetics of the Moscow

State University – Founded in 1970. Three research laboritories are located at the Faculty: Lab of Computer graphics and multimedia; Lab of computational complexes; Lab of Mathemetical Phisycs. Intel and Microsoft have established their students’ labs at the Faculty whereas Cisco has its regional academy there. www.cs.msu.su

Innovation Centre at the Institute of Precision Mechanics and Computing technologies named after S.A. Lebedev (IPCME) – Founded in 1948 it was the most important scientific and technological center famous for development of original supercomputer architectures. IPCME incorporates a number of research laboratories and one engineering center and employs over 500 researchers and engineers. www.ipmce.org

Center of Open Systems and High Technologies (Moscow state University of Physics and Technologies) – Main specialisations are Information systems, Automation of Management Systems, portal solutions, etc. The center’s partners include Sun Microsystems, IBM, RenderX, Adobe Systems, FatWire Software, Symantec, Symbol Technologies. www.cos.ru

Scientific and Manufacturing Complex (SMC) "Technological Centre" - Founded as University Research Centre at the Moscow Institute of Electronic Engineering in 1988. In 1994 SMC "Technological Centre" was awarded the status of State Research Centre. The Institute is situated in Russian Zelenograd, "Silicon Valley" of Russia. Currently there are 400 research staff. www.tcen.ru

* Examples of IT research organisations in Moscow

ICT Sector – Recent Success Cases

Google (USA): In 2006 set up a research & development center in Moscow to develop new products for Russian and global markets. The location decision was driven by the the availbility of talented researchers and the presence of the leading IT universities.

IBM (USA): In 2006 IBM opened a laboratory for information systems and technologies development in Moscow. The IBM lab specializes in mainframe hardware development which is considered to be IBM’s long-term strategic field of business development. As part of the network, Russian engineers will take part in developing software for data storage systems and testing software products for IBM BladeCenter servers. In 2005 expanded its Innovation center in Moscow, which offers porting and testing services to more than 100 ISVs, helping them deliver open standards-based solutions to market faster.

PeopleSoft (USA): Opened its headquarters in Moscow to serve Eastern Europe and former Soviet Union markets.

Cadence (USA): Established a research & development center to focus on Electronic Design Automation tool development, including methodology services. It also serves as Cadence's Russian centre for training, scientific endeavours and large-scale educational programmes, as well as local customer support. The center created 70 jobs.

ICT Sector – Useful Links

Information & Computer Technologies Industry Association www.apkit.ru

Association RUSSOFT www.russoft.org Non-profit Partnership of Software Suppliers

www.appp.ru Russian Chamber of Commerce and Industry

http://eng.tpprf.ru/ru/main/general/history/ Association of European Business in Russia

(IT and Telecom Committee) http://www.aebrus.ru/committees/sectoral/it/

American Chamber of Commerce in Russia (Information and Communication Technologies Committee) http://www.amcham.ru/committees/ict

Moscow’s location advantages

Competitive position Economic growth Employment/skills Infrastructure

Location advantages – competitive position

Moscow has an excellent regional offer for locating a software

development centre scoring better than all of its regional competitors

on the quality side

Location advantages – economic growth

The growth of Moscow’s economy in the next decades is predicted to significantly outpace the growth rate of other central cites in Eastern Europe

With growth rates around 25% the Russian IT market is a highly attractive investment location. According to the Ministry of IT and Communications, The IT sector should reach US$ 40 billion by 2010

Volume of the Russian IT market

3,6

9,0

11,5

7,2

4,5

5,8

2,8

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

2000 2001 2002 2003 2004 2005 2006

USD billion

Location advantages - employment/skills

Labour force of 8.5 million

Around 260,000 people employed in ICT sector

30 researchers per 1,000 employment

Almost 60 Universities providing ICT courses

Over 40,000 students in Computer Sciences

Social security paid by employers: 26%

Average working week: 40 hours

Statutory holidays: 10

Distribution of labour

Trade 24%

Construction 12%

Manufacturing 12%

Transport & Communication

7%

Education 5%

Healthcare 6.%

Government 4%

Financial services 4%

Real estate & other services

18%

Other8%

Source: Moscow Government; Goskomstat; Statistics on Russian Education; Watson Wyatt

Location advantages - R&D capacities Patents: Russia has the highest number of ICT patent

applications in Eastern Europe with Moscow being the driving force behind this indicator

Research institutes: Moscow is the research center of Russia with the highest concentration of research institutes, technology centers and Universities. Moscow hosts the highest number of IT research institutes in Eastern Europe

FDI projects: Between 2003 and 2007 Moscow has attracted over 30 Greenfield inward investment projects in IT & Software, which makes it the leading location for high-tech FDI in Eastern Europe

R&D activities by multinationals: Moscow has attracted a number of research activities from major IT players and positioned itself as one of the major centers for R&D in Eastern Europe. In addition, Moscow is seen by experts as one of the most promising markets for outsourcing activities. According to the study conducted by the market research specialist CyberMedia, Moscow is the second top destination after Bangalore for product development function

Location advantages - track record

Location advantages - infrastructure

Connectivity: Moscow is strategically located– easily accessible from both Europe and Asia. Moscow’s 2 international airports serve over 150 international locations – more than any major city in Eastern Europe

ICT Infrastructure: Moscow also offers the best ICT infrastructure in the country, with the largest internet users population in Eastern Europe

Contact us

http://moscow.e-regulations.org/info@miepa.org

T.: +7 (495) 431 3898