russian teddy-bear in search of free honey market
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Russian teddy-bear in search of free honey market. Leonid Glazytchev Logrus International Corporation. Russian Economy. IT is way ahead of the others. Is There the Market at All?. Russian economy is extremely unhomogeneous - PowerPoint PPT PresentationTRANSCRIPT
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Russian teddy-bear in search of free honey market
Leonid Glazytchev
Logrus International Corporation
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Russian Economy
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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
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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
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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
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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 nOn-profit Center for Internet Technologies (ROCIT)
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Software Sales
Crisis: QIII’98; currency devalued fourfold
FY
2000
- E
stim
ate
FY
99
- C
ris
is
FY
98
FY
97
1996
, Q
III
1996
, Q
IV
1997
, Q
I 1997
, Q
II
1997
, Q
III
1997
, Q
IV
1998
, Q
I
1998
, Q
II
1998
, Q
III
1998
, Q
IV
1999
, Q
I
1999
, Q
II
1999
, Q
III
1999
, Q
IV
$0m
$50m
$100m
$150m
$200m
$250m
FY97FY98
FY99
FY2000
$0m
$20m
$40m
$60m
Sales by FY
Sales by Quater
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Software Sales by Category
ERP19%
Home13%
OS23%
DB & Comm-n
14%
Bus. Desktop
31%
Relatively Small Sales to Home Users
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Multimedia Sales
Circulation (Legal)
2000
4000
6000
Average Success Hit
Gross Sales by Year
$20m$20m
$8,5m
1998 1999 2000
Circulation 1000 – 10 000 5 000 – 30 000
Titles per Year 80 300
Average Retail Price $20,00 $2,50
Gross Revenue $3 500 000 $5 000 000
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PC Sales & Internet Users
0,55
1
1,6
2,3
0,450,6 0,7
0,0m
0,5m
1,0m
1,5m
2,0m
2,5m
95 96 97 98 99
PC Sales Internet Users Internet Growth
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• Decommissioned 0,4-0,6 million PCs
• Purchased New 1,2-1,25 million PCs
Total Expected by 2001: 3,8 million modern PCsTotal Expected by 2004: 5-6 million
(9 million with upgrades)
66% on the Internet
PC Facts
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Internet Facts
Population: 146m
36m Intend toBecome Users
4,7 – 5,2mInternet Audience
2,3mRegistered
PC/Net users per 1000: 27/10 (Russia), 116/50 (Mow)
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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
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Forecast
- At least now will you tell me intelligibly: Up or Down???
Up
Down
BOTHWAYS
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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