We downgraded our forecast for Russian IT market growth in the Q3 15 update to reflect the weaker economic outlook - with recession and sharp rouble depreciation forecast to result in local currency contraction, and a sharp fall in the IT market in US dollar terms. We expect growth to return in local currency terms from 2016, but accelerate from 2017 as the economic environment becomes more supportive. There is , however , downside risk to this scenario , with political factors having the potential to generate uncertainty , for instance data localisation requirements and the government's increased strategic value on achieving technological independence .
Headline Expenditure Projections
Computer Hardware Sales: RUB507.6bn in 2014 to RUB471.3bn in 2015, -7.2% in local currency terms. Forecast downgraded in Q315 to reflect the weaker outlook for the rouble, while the fact demand was brought forward to 2014 ahead of anticipated price increases adds to the drag on spending.
Software Sales: RUB198.1bn in 2014 to RUB196.1bn in 2015, -1.0% in local currency terms. Demand for software from the modernisation initiatives of Russian enterprises will be met by local and global vendors, limiting market disruption relative to hardware sales, but the decline in purchasing power and confidence levels will mean the market contracts in 2015.
IT Services Sales: RUB289.6bn in 2014 to RUB284.7bn in 2015, -1.7% in local currency terms. New regulations requiring domestic data storage could delay the development of cloud computing supply, but with vendor investment in local presence due to the size of Russia's market, any downside should be short-term and IT services is forecast to be the outperforming segment over the medium term.
Full Report Details at
The Russia Information Technology Report features BMI Research's market assessment and independent forecasts covering personal computers and software; semi-conductors, memory chips, integrated circuits and general components; the internet and IT solutions. It analyses analyses regulatory changes (licensing, customs and intellectual property protection) and competitive landscapes comparing IT companies by products, sales, market share, investments, projects and expansion strategies.
BMI's Russia Information Technology Report provides industry professionals and strategists, corporate analysts, IT associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the IT industry in Russia.
* Benchmark BMI's independent IT Industry forecasts for Russia to test other views - a key input for successful budgetary and strategic business planning in the Russian IT market.
* Target business opportunities and risks in Russia's IT sector through our reviews of latest industry trends, regulatory changes, and major deals, projects and investments in Russia.
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