TECHKNOW: Esther Dyson's update ..BL.- E-mail:

TECHKNOW: Esther Dyson's update ..BL.- E-mail: - 'The Russians are coming!' The phrase smacks of cliche, yet it's the obvious way to headline a discussion of Russia's offshore programming industry. Indeed, cliches are the Russians'

Last Updated: 31 Aug 2010

'The Russians are coming!' The phrase smacks of cliche, yet it's the obvious way to headline a discussion of Russia's offshore programming industry. Indeed, cliches are the Russians' biggest problem as they attempt to sell abroad. Potential customers tend to think of the Russian mafia, or hackers, rather than the earnest entrepreneurs who visited the US last month to promote not only their services but their existence.

Given their numbers, the Russians have a lot to offer a globalising world. But they also have a negative image, a lack of commercial experience and an interfering government. Things are changing rapidly, though. The industry has looked hard at the example of India and its dollars 6.2 billion programming industry - one group's presentation was entitled: 'Can Russia challenge India's dominance in offshore software development?'

The PC answer was, of course, no. Instead, said Ron Lewin of the American Chamber of Commerce in Moscow (, the Russian software industry is going in its own direction, more towards problem-solving than simply coding. This is a bit of spin, but also generally valid. They are trying to turn their deficiencies into advantages. Russians are sometimes perceived as arrogant. Many Russian programmers are not 'mere' programmers; they are mathematicians and scientists who turned to software to make a living. Though they lack management skills, they excel at complex, large-scale technical problems.

The timing is awkward. The Indians have just lowered their projections for next year's revenues to dollars 8.5 billion - an increase, but less than expected. It would be tactless for the Russians to say they're replacing existing workers as the world economy goes soft; the message has to be: 'We'll help your company be more successful so it can keep its people and grow.'

But how does a company from a country outside the technology mainstream establish itself? Many Russians are envious of the Indians, whose government is actively boosting the industry with domestic tax breaks and overseas promotion. But the more sophisticated often echo Natalya Kasperskaya of Kaspersky Labs: 'We say to the Government: 'The less help the better!'' In Russia, companies all too often focus on qualifying for government support, honestly or otherwise, rather than customer satisfaction. Instead, Russian companies are beginning to focus on accreditation - with internationally recognised credentials such as ISO 9000.

Instead of learning on the job, companies are developing specialities - CRM, wireless billing systems, document management and workflow. But by far the most effective sales tool is a good reference account. This was the big news on the Russian roadshow: the sponsorship of the Seattle meeting by Boeing Corp, a big customer of several Russian companies Boeing's co-sponsorship meant more than any government's certification ever could.

The overall message is that the Russians' problems are not new, just extreme - communication difficulties, no branding, no differentiation, poor marketing. The Russians once had so much oil and gas they didn't sell their brains. But if they learn to use their technical skills productively, they will have a resource that's renewable in a way that oil and gas are not.

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