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. Last Updated: 07/27/2016

Child's Dream Leads to Creation of IT Giant

MTAnatoly Karachinsky founded IBS in 1992 and it is now Russia's largest systems integrator.
Twenty years ago, Anatoly Karachinsky helped computerize Soviet train-ticket sales by working to create a system still used by the Railways Ministry.

Ten years ago he founded Information Business Systems, which has grown from 12 employees to an information technology giant employing 2,000.

In June, Karachinsky, 43, made Business Week's Stars of Europe list of the top 50 businesspeople on the continent.

His lifelong interest in information technology began back in the mid-1970s, before personal computers had appeared. "In school I was absolutely sure I wanted to be a programmer," Karachinsky recalled.

He began earning money writing computer programs while studying at the Moscow Institute of Railway Engineers, from which he graduated in 1981. Later Karachinsky went to work for the computing center at the Soviet Railways Ministry.

"There were many good programmers working with me at the time -- many of whom are now working in big companies or have left abroad," he said.

Karachinsky spent five years at the ministry before a former classmate at the railway institute invited him to work at an Austrian-Soviet IT joint venture called Prosystem.

"It was one of the Western companies coming to the Soviet market in hopes of earning quick money," he said.

Because the staff was very small, Karachinsky had to deal with both technological and commercial issues, and he recalls that the company made $10 million in its first year.

"It was a good lesson," Karachinsky said. "For me it was like a flight to the moon. I came from the [Railways Ministry's] research institute and started working for a Western company."

But a year later he became bored with the job.

"I was a programmer, I wanted to do something," Karachinsky said. "To be able to do something, I needed people. To hire people, I needed to build a business."

When Prosystem's Austrian owners decided to set up another joint venture with the Soviet government, Intermikro, Karachinsky joined as technical director.

New mass media had begun to bloom during perestroika and business was thriving with newspapers and magazines ordering information systems.

More importantly, Karachinsky was learning. "These joint ventures were a step from the state-run organizations to private businesses," he said.

But the Soviet Union collapsed in 1991 -- as did the joint ventures co-owned by the government. So Karachinsky a year later founded IBS, which has grown to be the largest systems integrator in the country.

Today, IBS Group includes a number of subsidiaries in addition to the systems integrator. Dealine was set up in March 1995 and sells computers and other products through its e-business platform at www.dealine.ru. The company announced earlier this month that it would assemble computers under the Depo brand for corporate customers.

Dell Systems, the Russian dealer for Dell Corp., was created in July 1996, and in April 2000 the software company Luxoft set up shop. Karachinsky's group also includes the Data Fort outsourcing company, the NewspaperDirect online news delivery company and other projects.

"IBS is like a very big research institute," Karachinsky said with smile, adding that the company has grown because of ever-increasing demand for IT services in the country.

Besides demand, the four ingredients of a successful business are the idea, strategy, ability to focus on implementation and teamwork, Karachinsky said. "It's important to know how to build a team, how to convince them, how to inspire them and how to make them follow you."

Karachinsky sees himself primarily as an entrepreneur, with a knack for doing business acquired after years of mistakes.

A Western journalist once asked him whether the university where he received his business education was expensive.

"I said it cost about $12 million," Karachinsky said, referring to his entire career.

"You learn as you live, and your mistakes cost you money. So my education was extremely expensive, but very effective," he says. "We didn't have fundamental education in the management field, and we made more mistakes than we would have if we had.

"It's always been difficult to do business," he said. "If it's not difficult in business, you should close down or it's a monopoly."

Karachinsky has been able to succeed because of his vision and ability to focus, said Gamid Kostoyev, marketing director at Germany's SAP AG representative office in the CIS and Baltics, who joined Karachinsky's original IBS team in 1993.

Karachinsky was trying to organize business processes at IBS while his competitors were trying to clear imported goods at customs. "He has always been able to see far ahead -- 10 steps farther than anybody else," Kostoyev said.

Karachinsky said that the main stimulant for business development is competition, something lacking in Russia.

"How long did Moses lead people around the desert? For 40 years. Why did he do it? To change their mentality from being slaves to being ready to build a new state," he said. "We need time. We need critical mass. We need success stories."

Being a business success story hasn't kept him from enjoying his hobbies -- playing golf, sailing on his yacht, water skiing, photography and reading.

His two sons study at universities in Canada. Ivan, 21, is majoring in finance in Vancouver and 15-year-old Roman, taking after his father, is studying computer programming at Waterloo University in Toronto.

"This year for the first time my wife and I have been left alone," he said.

"I hope [my sons] come back to Russia," said Karachinsky. "For now they come for advice, but not often."