Russia's Putin IT spend in reverse gear, fast

Sixteen per cent shrinkage last year and further, faster contractions to come

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When the first dotcom bubble popped, the likes of EMC, Sun and Oracle didn't panic that the days of easy greenfield sales were over because the then-burgeoning economies of eastern Europe gave them new greenfields in which to romp.

Russia, in particular, modernised quickly and became a decent-sized market for enterprise IT.

But it's all going pear-shaped now: abacus-wielder IDC has shuffled the beads and declared that Russian IT spending went backwards by 16 per cent and predicts “an even more dramatic decline is forecast for 2015.”

Vendor-land's already feeling the pinch from this fall: VMware reported a 50 per cent year-on-year sales decline in Russia last October. You may not care for VMware's fortunes but your pension fund probably does, so Russia's reversals eventually affect all of us in a small way.

IDC says the spending drop is a result of Russia's overall economic woes and will see consumers keep their wallets in their pants. The analyst also predicts “additional regulations covering [government] IT procurement and measures favoring local suppliers can be expected.”

“For the last two decades, suppliers to Russia have had to deal with many operational challenges but this has always been within the context of a growing and modernizing economy gradually opening and integrating with the rest of the world,” says Robert Farish, IDC's veep for Russia. “But from 2014, it looks like these long-term processes are stalling or even beginning to reverse.” ®


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