Bearing in mind that
the world IT market has experienced some setbacks
lately whilst IT in Russia has continued to grow
very quickly, do you think that we can characterize
Russia as the new India?
Before I answer this question, I would like to say
that, even though IT in Russia is growing rapidly,
at around 25 % per year compared to the downturn
in the global IT industry, I do not think that Russia's
role can be compared to that of India because today
India is number one in offshore IT outsourcing.
This role is not directly connected with the national
market growth; these are different things. Besides,
the fact that the markets in developed countries
like the US or the UK are falling, and IT is still
falling, is not good for outsourcing.
Since the markets and offshore outsourcing are not
moving as fast as they used to, it is not the right
moment to try and catch up with India. The fact
that the Russian domestic market is rapidly growing
is not enough in itself to enable Russia to become
the new India. Unlike Russia, the Indian domestic
market has not been growing rapidly, but India has
retained its leading role in offshore IT outsourcing.
However, I think that Russia is going to take a
much more visible position in the global IT marketplace
and not only because of the rapid growth of its
domestic market. I can expand on that but only if
you ask me that question…
What would you say will be the reasons for Russia's
more visible position in the global IT market?
The growth of the domestic market is not a reason
at all, but there are real reasons why Russia is
becoming a prominent player in the IT outsourcing
market. The first factor is its human resources.
There are two main benefits to Russian IT people:
first is the number of these people. There are different
data on how many IT professionals graduate each
year. Russia's starting point in this business was
very good. In the mid 1990s, Russia had more than
one million R&D personnel which was the highest
number in the world, followed by the US and Japan.
According to Microsoft's research, over the last
seven years about 186,000 people have graduated
annually from Russian universities with the skills
required to work in the IT industry. According to
Forbes, it is 100,000 people every year, but those
are only the people majoring in Computer Sciences,
Maths and Physics, with a good scientific background.
In India, they have 60,000 graduates every year.
Secondly, the demand for IT workers is going to
grow very rapidly in the future. In 2005, the demand
is expected to exceed one million, compared with
360,000 today. If we look at the numbers from India,
we can see that the total number of IT workers today
is about 500,000 of which only one third work in
the software and IT services export sector. By 2005,
there will be around 200,000 people working in this
sector, well short of the one million demanded.
Thus, a significant amount of those posts will be
filled by non-Indians. There is a large market to
be opened up. The numbers above show that Russia
will be an important player there. Russian education
is good: in two out of the last three years, Russian
teams have won the ACM programming Olympics. They
took 1st and 2nd places in 2000, 1st and 3rd places
in 2001 and had a very good performance this year
despite the Chinese winning. Russian universities
were among the winners and, more importantly, they
were regional universities which is very good news.
That is where the real potential of Russian IT is
coming from. Although we won't be the next India
because India is India and will remain so, we will
certainly become a very visible player.
Auriga was founded twelve years ago and soon
decided to move to America. Tell us about the history
of Auriga. How did you become one of the fifty fastest
growing companies in New England, for example?
We founded Auriga in 1990 in Russia to carry out
software development for foreign clients like Hewlett-Packard,
as well as for domestic customers. I think for the
first three years HP was the only client of Auriga;
we became their exclusive partner for the Moscow
region. The HP initiative was about selecting one
business partner within each of the leading IT regions
in Russia. HP would train them in California and
then they would return to Russia to develop software
for HP.
We signed the first people and then, in 1993, with
the recession, Hewlett-Packard resized these operations
and only kept their Indian partnerships going. So,
at that moment, I decided that we had to move to
the US because, without building sales and marketing
infrastructures closer to the clients, it would
have been difficult to be successful. I decided
to take us to the US and, in 1993, Auriga was incorporated
in the State of New Mexico. In 1995, Auriga's headquarters
moved to Amherst, New Hampshire. Since then I have
lived in NH and spend ten days or so here in Moscow
every couple of months.
Offshore solutions, IT staffing and software
development services are your three cornerstones.
How successful have they been?
The good thing now is that all three are merging.
We still have purely staffing projects but we are
trying to get turn-key projects where, obviously,
staffing is the first stage. If you get good people
then the job will get done. Doing the same thing
offshore is even more challenging. Let's say we
start with getting the potential turn-key project
from the client and we sort out the staffing problems
by using our people in Amherst, New Hampshire and
then the next project is done half offshore and
half on-site. All of these three lines of business
are merging so as to be able to achieve our goals.
We want to position ourselves as a consulting company.
It's not a client's concern where the job is being
done. Wherever labor and production is the most
efficient and least expensive is where the job is
being done.
|
In a speech in St.
Petersburg last year you said you were always competing
with Indian companies. How do you manage to compete
in the global marketplace?
We are competing with Indian companies. There are
good companies from many countries but it happens
that, in our case, we have nearly always bid on
the same projects as Indian companies. I have never
met any Russians! We are winning projects, obviously.
During my IT roundtable talk when President Bush
visited Russia, I gave some examples of how it was
possible to beat Indian companies. Russian companies
still have a major disadvantage which is the sheer
size of some of the projects. If we had to have
a hundred people working on a new project within
a month, we couldn't do it because we just don't
have the engineers and the infrastructure for large
projects. What Russian companies need to do is to
grow! Big projects need bigger companies which need
more people and more investment.
Your mission is to constantly exceed the expectations
of your clients. Who are they and what do they expect
from you?
Our clients are mostly American and we work in two
vertical markets: software development and telecom.
We do have a little bit of work for other clients
but these two groups represent 90% of our work.
What they expect is really different because it
involves a lot of work, like system-level software
development, things like writing drivers, etc.,
i.e. something not typically done offshore. It's
difficult to find this type of skills abroad; we
are kind of unique in that respect. Our clients
expect us to deliver solutions and we try to exceed
their expectations. We are succeeding.
How can a company benefit from using your offshore
resources?
Clients usually benefit from offshore work due to
a combination of a few factors. Number one is cost
saving. A couple of years ago it wasn't the main
issue but, in the current climate, it most certainly
is. Secondly, it's the opportunity to find skills
which they themselves do not possess or cannot find.
If you need a certain amount of resources for a
project and can double the number of people working
on that project, then you could halve the time-to-market
for your product.
Can you explain what Auriga's IT Business Incubator
is?
This project is about studying how SMEs can use
IT. Big companies usually know how to do things
for themselves. For SMEs, it's important to have
a partner helping them get to know local markets
and help them develop software on their own terms
and maintain their own development standards. We
try to help them with the infrastructure. The next
step would be for the client to become totally independent
but, in practice, they keep working with us even
though it costs them a little bit more. Having a
local partner is really useful.
What can you tell our readers about your close
connections with Moscow State University and the
level of communication between Moscow and New Hampshire?
Our connection with Moscow State University is very
important. I was a professor there for a number
of years. Most importantly, this close connection
gives us access to top graduate students. They know
we are here and we have very good contact with them.
(Mr. Sukharev connects to his server in New Hampshire
to access the data). 95% of Auriga employees have
Master's degrees, 17% have PhDs, and 65% are graduates
of Moscow State University. (Mr. Sukharev phones
his voice mail inbox in New Hampshire to see if
he has any new messages).
You have built this company using absolutely
no start-up capital. How did you manage this?
We're still not looking for outside financing right
now. It might be possible in the future though.
Right now, we are self financing. I'm very hopeful
we will outgrow ourselves as soon as the markets
pick up. My main priority is to establish this company
as a very visible player, especially in the US,
and we are trying to do a lot to enter the German
and British markets. We would like to double and
triple the number of engineers so as to be able
to compete for big projects, something which can't
be done in a reasonable time frame without outside
investments. It depends a little bit on the market
but the challenge is to really make the company
grow using outside investments.
If we were to meet again in ten years time, where
would you like to see Auriga?
First of all, geographically, I would like to see
us in Amherst, NH, because I love the place, and
in Russia, too. I don't want to be elsewhere; I
love the proximity to the ocean and the markets.
In Russia, at some point we will have to go outside
Moscow. We have already tried to do it more or less
successfully but it has depended on the project
so far. Moscow still has good resources but in Russia's
regions there are abundant, very high quality skills
available for a lower cost. Therefore, in Russia,
we will move into the regions but keep our connections
here in Moscow and at Moscow State University. Auriga
will become a top-level consulting company using
offshore resources. I want to be able to bid on
big projects.
What is your final message to those people looking,
perhaps, to invest in business in the Russian Federation?
Look at Russia. Russia is different. It's not like
it used to be three or four years ago. It has experienced
a lot of growth and there is a lot that still needs
to be developed in the Russian IT sector. Some foreign
investors' concerns about Russia are very outdated.
Today Russia is one of the best countries to invest
in. The window of opportunity is wide open.
|
