Russia Information Technology Report Q3 2015
BMI View: We downgraded our forecast for Russian IT market growth in the Q315 update to reflect theweaker economic outlook - with recession and sharp rouble depreciation forecast to result in local currencycontraction, and a sharp fall in the IT market in US dollar terms. We expect growth to return in localcurrency terms from 2016, but accelerate from 2017 as the economic environment becomes moresupportive. There is, however, downside risk to this scenario, with political factors having the potential togenerate uncertainty, for instance data localisation requirements and the government's increased strategicvalue on achieving technological independence.
Headline Expenditure Projections
Computer Hardware Sales: RUB507.6bn in 2014 to RUB471.3bn in 2015, -7.2% in local currencyterms. Forecast downgraded in Q315 to reflect the weaker outlook for the rouble, while the fact demandwas brought forward to 2014 ahead of anticipated price increases adds to the drag on spending.
Software Sales: RUB198.1bn in 2014 to RUB196.1bn in 2015, -1.0% in local currency terms. Demandfor software from the modernisation initiatives of Russian enterprises will be met by local and globalvendors, limiting market disruption relative to hardware sales, but the decline in purchasing power andconfidence levels will mean the market contracts in 2015.
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