It has been estimated that the world market for software is rising rapidly. In 2006 this industry remained dynamic. The total volume of the IT sector, according to preliminary data, will be over 1trl 60 bln rubles ($60 bln). This is 20% higher than in 2005. Expected revenues for electronic services are 745 bln rubles ($28 bln), which is 21% higher than in the previous year, and prospective revenues on postal services are 54,4 bln rubles ($2 bln), which is 27,4% higher than in the previous year.

The lion's share of this market is either outsourced or offshore programming (offshore software development) when the on-demand of some large corporations is present. According to the research company Gartner, 72% of IT users opt to outsource. 

Russia now is one of the leaders in exporting software and outsourcing services. Today in Russia, there is between 25 and 30 thousand people in the field of exporting software, while in 2004, exports amounted to 560 million dollars. It is expected that in 2007 this figure will exceed 1 billion. The growth of the industry is due to the increase in demand for programming in the Russian market. With the support of the IT sphere that could grow by 20% annually. The government concept of the IT industry development would be a further impetus for growth in Russian IT-businesses. The Russian resort developers and large companies have several advantages over their counterparts from other countries. These include high levels of training, the cost of services, geographical proximity to the countries of Western Europe, and the developed countries of South-East Asia and the Middle East.

Let’s see what we leave behind from the past year.

So, the landscape for outsourcing marketplaces is rapidly changing; with many new job web-sites appearing to change on daily basis. Software Development Outsourcing marketplaces provide people with a convenient opportunity to find new outsourcing business partners.

As Russian service providers have enjoyed long-term relationships with their clients and acquired adequate knowledge about their business, from a long-term perspective, the Russian IT stands to gain. From a demand viewpoint, the size of the offshoring pie is increasing--larger deals are flowing offshore, and more global organizations are coming to Russia to evaluate and finalize their outsourcing strategies. However, as offshoring has evolved, customers and vendors have discovered the benefits of improved processes and service quality as equally important factors in the choice of an offshore location.

"They come for the price, but stay for the quality" is the mantra which many offshore providers currently subscribing to. Today besides cost and quality, some of the other driving factors for offshoring are aspects like easy access to technical talent, flexible work practices and the ability to use different time zones. Creating 24-hour processes, which were previously limited to certain parts of the day, access to highly qualified and motivated staff diversifies an organization’s work culture and additionally assists in the improvement of service quality.

Today, there are multiple options for structuring an offshore arrangement for achieving financial and IT transformation objectives. The four preferred outsourcing models are: captive unit, build-operate-transfer (BOT), joint venture and dedicated offshore development center.

Joint venture is a model wherein a client and an offshore supplier set up a joint venture vehicle, which will predominantly service the client's business. Both the client and the JV partner share the risk and the revenues resulting from the operations.

Though each model has its pros and cons, businesses must choose a stand-alone model or a hybrid structure to maximize the benefits of offshoring and aligning the offshore initiative to their business model.

Clearly, there is no one fit for strategy. It is the consulting skills of the vendor and the client's desired end result that will result in the evolution of the offshoring model to meet business requirements.

In addition, economic and regulatory frameworks over the last few years have resulted in several emerging challenges for organizations. Such dynamic considerations have made it imperative for them to assess the financial viability of their IT portfolio, so that they can address the changes in a business scenario in an effective manner and optimize returns on investments in existing applications as well.

We are keeping up to date, and indeed ahead. Recently we even celebrated the New Year in Saint-Petersburg where one of the development centers is situated. The weather was not quite Christmassy, but it has not been a problem for those who are use to working agile and are always ready for unexpected situations.

Among the Holiday surprises was the visit of Dimitri Nikouline, Murano Software President. According to Dimitri, our clients trust us and are pleased with the outcome of our work. Some of them are glad to see the members of our teams not only as talented developers but also as those who have the same interests in life.

Informal communications during work that naturally take place speaks of understanding and is the key to successful cooperation in the future. Natural human communication among business (and development) partners is the basis for the most promising projects. We have everything, starting from outstanding and talented developers, in order to usher in the New Year.

Dimitri also said “Guys, you are simply the best”. Frankly speaking, we believe in it.

Some respected Internet sources give very cognitive information and can influence thinking. One source displays a diagram that shows offshore software development destinations. You can find several countries there, but Russia is not represented. Where is it included? Is it located in the “Eastern Europe” or “Other Countries” category? 

On the other hand, more and more large companies open development centers in Russia. This week Google opened its second development center outside the US in the same country. The country is Russia and the development center is located in Saint-Petersburg.  
 
Google chose Russian specialists to develop innovative software solutions. Murano clients do the same. If you are looking to set up your own offshore development center in Russia, we would like you to consider working with our dedicated teams of talented and highly skilled technical professionals.  
 

The Economic Development Authority in Fairfax County and Murano Software

The delegation of the Economic Development Authority in Fairfax County (FCEDA) including the president and chief executive officer visited the Murano software development center in Saint-Petersburg. The meeting was incredibly interesting as both sides interacted with each other quite well. We presented our organization’s, activities and benefits and discussed possible future collaborations with the FCEDA.

Our plans on the east coast

Since Murano’s headquarters is located on the west coast of the US, most our software development clients are based there. Recently, we’ve been considering expanding our operations throughout the United States. We considered expanding our operations in New York, Boston, Washington D.C., or Atlanta.

From the outset, neither northern Virginia nor the Washington, D.C area were not high on our list of possible locations. However, after we met with the FCEDA, we realized that Fairfax County is one of the best places to live and have a business in terms of economic growth, infrastructure, level of education, etc. We are grateful to the FCEDA delegation for giving us the opportunity to learn as much as we could about their region. We think they did a great job of promoting the county and providing assistance for international business development.

Informal part of the meeting

Our guests did not appear to be tired at all after their long flight and even kindly agreed to go sightseeing in the city on their first day in Russia. We really appreciated their willingness to discover Saint Petersburg!
The FCEDA delegation visited our office early in the work day, therefore they saw only a few of the Murano developers at work since they adapted to the time zone difference with our US clients. The delegation members said that it was interesting to visit our offices and see how easy it is to plunge into an atmosphere where the workers are highly enthusiastic even if the surroundings are unfamiliar.  

It’s obvious that lots of companies can minimize their development costs via offshore outsourcing. Thus usually one of the main criteria for choosing an offshore destination is price. Don’t you think this is a mistake?

If you seek a successful offshore outsourcing engagement, you must think of the results you want. You should pick a vendor that matches you in size or the size of your projects. It’s worth paying attention to developers’ abilities, skills and experience; put emphasis on people rather than on specific requirements of your project.

As for Murano Software, we are quite effective at cooperating with small and mid-size companies that are innovative. We provide our clients with dedicated teams of talented and creative problem solvers who are able to realize the client’s ideas successfully.

In our opinion, the best offshore effect occurs when the finished software product delivers the full functionality required to meet the needs of the client and it is delivered on time and on budget without any unexpected changes in the process of the development.
To get the desired offshore effect, you should enhance your in-house IT-team by engaging the top specialists in the world. Therefore ask for resumes, don’t be immediately concerned with how quickly a project can get done. Ask for company hiring policies and strategy. And finally, you’ll benefit from having access to a diverse talent pool that can quickly fulfill your requirements and deliver the quality software products and achieve better ROI.