Transcript Russian teddy-bear plodding from jumble sale to the market

Russian teddy-bear in search
of free honey market
Leonid Glazytchev
Logrus International
Corporation
Russian Economy
Is There the Market at All?
• Russian economy is
extremely unhomogeneous
• Maturity levels for different
economy sectors are
significantly different
• IT is way ahead of the others
Reasons for IT’s Lead
• The most dynamic sector of the economy
worldwide
• The most internationally integrated
• No rotten roots – young industry
• Attracts young and educated people
without political or economic prejudices
• Very high level of technical competence
The Two Sides of Russian IT
• Side 1
– Speaking the same language
– Flexible
– Relatively low cost of rank and file labor
• Side 2
– Managerial skills usually below expectations
– Promises outbalance real capacity/skills
– Salaries considerably higher than the country
average. Senior management is convertible, i.e.
expensive
Show Us the Data!
• Officially published data is often
unreliable
• Most of the data are based on private
conversations with top management of
major software and hardware distributors,
and on Logrus experience
• Internet data supplied by Russian nOnprofit Center for Internet Technologies
(ROCIT)
FY
99
20
00
FY
$50m
1998, QII
1998, QI
1997, QIV
1997, QIII
1997, QII
1999, QIV
1999, QIII
1999, QII
1999, QI
1998, QIV
1998, QIII
FY2000 - Estimate
FY99 - Crisis
FY98
FY97
1997, QI
$200m
98
97
$100m
1996, QIV
$250m
FY
FY
$150m
1996, QIII
Software Sales
Sales by FY
Sales by Quater
$60m
$40m
$0m
$20m
$0m
Crisis: QIII’98; currency devalued fourfold
Software Sales by Category
Home
13%
Bus.
Desktop
31%
OS
23%
DB &
Comm-n
14%
ERP
19%
Relatively
Small Sales to
Home Users
Multimedia
Sales
Circulation
Titles per Year
Average Retail Price
1000 – 10 000 5 000 – 30 000
80
300
$20,00
$2,50
Gross Revenue
$3 500 000
Circulation (Legal)
Gross Sales by Year
$20m
$5 000 000
6000
$20m
4000
$8,5m
1998
1999
2000
2000
Average
Success
Hit
PC Sales & Internet Users
2,5m
2,3
2,0m
1,6
1,5m
1,0m
1
0,55
0,5m
0,45
0,0m
95
PC Sales
96
97
Internet Users
0,6
0,7
98
99
Internet Growth
PC Facts
• Purchased New
1,2-1,25 million PCs
• Decommissioned
0,4-0,6 million PCs
Total Expected by 2001: 3,8 million modern PCs
Total Expected by 2004: 5-6 million
(9 million with upgrades)
66% on the Internet
Internet Facts
2,3m
Registered
4,7 – 5,2m
Internet Audience
36m Intend to
Become Users
Population: 146m
PC/Net users per 1000: 27/10 (Russia), 116/50 (Mow)
Localization Industry
• Didn’t exist 10 years ago
• Mostly very small companies or departments
with a single major client
• No reliable revenue statistics
• Continuous turnover of players on the market
• Lack of professionalism on a wide scale
• Approximate gross revenues for FY99:
$3 – 4 million (~30% - internal localizations)
• Contradictory and inconsistent data on
technical translation market volume
Forecast
Up
BOTH
WAYS
Down
- At least now will you tell me
intelligibly: Up or Down???
SUMMARY
• S/w and hardware sectors have survived
the crisis and give all signs of revival
• Internet is growing rapidly
• For three consecutive years:
s/w sales > $100m, computer sales > 1m
• We can expect an upward
spiral both in the IT industry
and in localization
WWW.LOCALIZATION.RU
[email protected]
WWW.LOGRUS.RU