The Ministry of Economics and German IT companies are discussing the prospect of selling foreign software to state structures on new terms. Foreign companies offer to partially transfer the production of software to Russia and soften the law banning the supply of foreign software to government agencies.
Last week, at a meeting with entrepreneurs of the state of Baden-Wuerttemberg (Germany), Minister of Economy Alexei Ulyukayev discussed the localization of software production in Russia. Representatives of the Ministry of Communications and Mass Media were invited to the meeting, but were not present.
“The greatest concern of German businessmen is caused by the definition of Russian software provided for by the beneficiary of the company-holder of the product, provided for by the law signed in summer. In order to stimulate investment activity of foreign IT companies in Russia, representatives of the German business community propose to consider the possibility of making changes to the legislation and use the criteria for the degree of localization to determine the origin of the software, ”says the correspondence
between ministries.
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The representative of the Ministry of Economics Elena Lashkina confirmed that "the localization of foreign software developers was one of the issues discussed." In addition, a representative from
SAP attended the meeting. In addition, the
IBM Research and Development Center and the
HP division are based in Baden-WĂĽrttemberg.
The law obliging state agencies to submit a written explanation for the purchase of foreign software on January 1, 2016 was signed by Russian President Vladimir Putin at the end of June.
From January 1, 2016, the state customer will have to argue his choice in favor of foreign software, if his Russian counterparts in a specially created registry of domestic software. The law will affect only state bodies.
The software should belong to the state, the municipality, a Russian non-profit organization or company with a share of Russian beneficiaries of more than 50% - this is the main criterion that makes it possible to consider software as domestic.
The Association of European Businesses had previously
requested that localized foreign software be incorporated into the created registry of domestic software. The largest foreign IT companies represented by the Director General of the Association of European Businesses (
AEB ) Frank Schauff were asked to postpone the entry into force of the law from January 1 to July 1, 2016. During these six months, the association proposed to the Russian authorities to work out joint criteria for the localization of foreign IT companies in Russia, so that their software could also be included in the Unified Register of Russian software being created.
Mr. Schauff also notes that “European business in the past decade has made significant investments in the Russian Federation and planned to invest in the future,” but now foreign IT companies may suspend investment programs and even withdraw from the Russian market under the conditions of unclear rules of the game,
quoted his words “ Kommersant.
SAP CIS Director General Vyacheslav Orekhov notes that localization of production in the company implies “procedures for transferring the software creation process to Russia: development, training, service support and data center centers”. “Specific criteria for considering a company or a product as localized should be defined in a dialogue between business and the regulator,” he said.
In March, the Russian representative office of SAP turned to the Ministry of Communications and the Ministry of Industry and Trade with a proposal to conclude an investment agreement, under which SAP undertakes to invest in technology development in the country. Later, Nikolai Nikiforov, Minister of Communications, said that SAP is in talks with
Rostec on creating a joint venture in Russia, but this idea was not supported by SAP top management in Germany.
According to the National Association of Electronic Commerce Participants, SAP in 2014 was the most sought-after software developer in the Russian public sector, who bought 5.6 billion rubles in its solutions. Next come Oracle (4.6 billion rubles), IBM (3.3 billion rubles),
Microsoft (3.05 billion rubles) and
Cisco (1.9 billion rubles).
“Russian companies fear that localization will further strengthen sales of foreign software,” Nikolai Komlev, director of the Association of Computer and Information Technology Enterprises,
told Kommersant. Foreign players, Mr. Komlev adds, fear that in the shrinking Russian IT market, they may in the future be completely removed from the public sector, which in Russia is the largest consumer of IT.