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. Last Updated: 07/27/2016

COMPUTER BUSINESS: Russia Due for Boom In Computer Training




I've noticed that as the computer market here develops, different kinds of business experience a "golden period" when their products or services undergo either high demand or high growth. In the past this has usually been connected with different kinds of hardware, when local companies catch the wave as new technologies take off in Russia. I think companies in the computer services industry, most notably providers of training in information technology, or IT, are due their golden period in 1998.


The total Russian IT market is now worth more than $3 billion annually and is growing rapidly. Russian organizations are becoming more sophisticated users of technology, and the systems they are employing are becoming more complex. Networking technologies are now becoming ubiquitous even in relatively small companies, which can significantly increase the complexity of a company's computer infrastructure.


The business of training computing professionals is large in the United States and Western Europe but still in its infancy in Russia. For historical reasons, Russia has comparatively few suppliers of professional IT training courses. As the computer market emerged here in the early 1990s, customers thought primarily in terms of buying hardware. Though most company bosses could be persuaded to buy shiny new computers, most refused to contribute to the cost of teaching their employees how to use them properly.


These attitudes, training companies say, are a product of a Soviet-era mindset. There was no professional IT training under the previous regime. Labor was cheap and programmers plentiful. If there was a computer problem that no one understood, you got a programmer to hack around it. Technical specialists were employed for their computer knowledge, and if there was something they didn't know, then it was their job to go and find out about it -- at their own expense.


When your potential customers think this way, it is virtually impossible to run a business providing IT training. Well-equipped training centers require a big investment. In the early 1990s, if you had capital there were other, more profitable computer-related businesses to invest in. As a result, there are few local companies whose exclusive business is to provide IT training courses. This is an extraordinary feature for a market the size of Russia.


Last year saw large growth in the IT training market, however, both in terms of student volumes and in the range of offered courses. More significantly, many Russian computer companies involved in distribution or systems integration businesses launched training operations or expanded existing training departments.


Computer companies that derive a large share of their business from larger Russian customers have seen their profits from supplying hardware slashed in recent years. Today there is also intense competition among companies in the more expertise-oriented networking business. These firms are looking for new ways to add value to their businesses and profit from relationships with Russia's biggest buyers of computer technology. Providing IT training has been one way to do this.


But demand is also playing a part. Many Russian organizations are still reluctant to spend money on intangible products like training, but the difference today is that many of these same organizations now realize when buying that training is unavoidable.


Companies in competitive sectors such as telecommunications and investment banking understand that when you are aiming for bigger prizes, skimping on things like training really doesn't make sense.


Robert Farish is the editor of Computer Business Russia: farish@online.ru