outsourcing to ukraine. country overview. webinar 13.01.10
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04/18/23 “Outsourcing in CEE. Country Overview. Ukraine” © Ukrainian Hi-Tech Initiative 1
Ukrainian Hi-Tech Initiative
Outsourcing in CEE. Country Overview. Ukraine
Webinar “Outsourcing in CEE. Country Overview. Ukraine.”
Presenter: Inna Sergiychuk, COO, Ukrainian Hi-Tech Initiative
January, 13, 2010
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Agenda
Introduction of Ukraine
Backgrounds for Outsourcing to Ukraine
Overview of Ukrainian IT Outsourcing Industry
About Ukrainian Hi-Tech Initiative
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Introduction of Ukraine
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Ukraine Snapshot
Population: 45,999, 900
Capital Kiev
24 provinces and one autonomous republic Crimea
Languages:Ukrainian, Russian
Time Zone EET (GMT+2)
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Overview of Economy Ukraine is an emerging free market, with a gross domestic product that has
experienced rapid growth in recent years
Western-oriented government policies encourage partnership and close business ties with US and EU companies
In 2008 Ukraine joined the World Trade Organization
Ukraine now has the potential to be one of the region’s leaders in volume of foreign direct investment and portfolio investment
In 2007 Ukraine had the highest IT industry growth rate among Central and Eastern European countries. Ukrainian IT market ranked fourth after Russia, Poland and the Czech Republic, with almost 40 percent growth and over $3,4 billion in volume, accordingly to IDC survey
The USA, Germany, Poland, the UK, Japan, China, Russia are the main trade partners of Ukraine
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Foreign Direct Investment to Ukraine
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Ukraine aspires to join the European Union and NATO, and has entered into co-operation agreements with both organizations'.
The European Union's Partnership and Cooperation Agreement (PCA) with Ukraine went into force on March 1, 1998.
The final tournament of The 2012 UEFA European Football Championship (Euro 2012) will be hosted by Ukraine and Poland
International Relations
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Geography & Culture
Close to Europe
Time differences with Europe are negligible
Moderately continental climate close to climate of most European countries
Cultural compatibility with European and North American countries
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Citizens of the United States, European Union, Swiss Confederation, Liechtenstein, Canada, and Japan DO NOT need visas for entering Ukraine since 2005
Kyiv, Kharkiv, Lviv, Dnipropetrovsk, Donetsk, Odessa - main airports with direct links with most countries of the world
A lot of hotels and airports are being modernized, and the new ones are being built as a preparation to host Euro 2012. 4 cities are to host Euro 2012!
Traveling to Ukraine
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Backgrounds for Outsourcing to Ukraine
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IT Labour Market
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Education in Ukraine
Ukraine has a long standing reputation as major technology region, with a well developed scientific and educational base
With only 1% of all world’s population, Ukraine has 6% of the world’s physicists, mathematicians, computer programmers, and other highly educated professionals
More than 16,000 IT specialists with bachelor degree and about 14,000 IT specialists with master degree graduate from universities each year
To bridge the gap between classical education and real business and technical process, outsourcing companies have partnered with leading universities to offer additional classes and labs for students
Bologna process in higher education area.
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Office rent - from 8$ to 30$
Internet (optical channel 4 mbit) - from 50$ to 200$
PC for software development from 600$ to 1000$
Infrastructure in Ukraine
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In 2007 the Ukrainian Parliament adopted the law “On the Foundations of the Development of Ukrainian Information Society in 2007-2015”. The goal of the law is to promote growth of information society in Ukraine, strengthening the basis of IT sector development.
One of the most comprehensive law on law on Intellectual property and copyright protection in the world
Non-residents at the territory of Ukraine may perform activities only through their own representative offices
Government Support and Legal Aspects of Business in Ukraine
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Overview of IT Outsourcing Industry in Ukraine
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Early stages of SD market development in Ukraine
1952-1970: Formation of computer calculations 1952 – first computer in Continental Europe. Computer codes.
1970-1980: Usage in science, military technologies.
FORTRAN, PL1, COBOL, C
1980-1990: Usage in national economy of Soviet Union 1980 – PC appearance 1980-1990 – Automation of largest industrial enterprises of Soviet
economy. COBOL, FORTRAN, PASCAL, Пальма.
History of Software Development Market
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Formation of SD industry in Ukraine
1990-1999: Formation of Software Development market 1990 – appearance of the first independent software development
companies. Accounting. Automated workstations for industrial enterprises. Clipper, DBase, FoxPro, С/С++.
1989 – establishment of Mirasoft 2000 problem. Tessart – 1999. 120 employees.
1999-2002: Industry growth within DOT COM boom Wide usage of Internet Projects for DOT COM startups The volume of offshore projects exceeds the volume of onshore projects
2002-2003: Period of Uncertainty Global IT market recession and focus of software development market on
offshore customers became the reason of industry slowdown. Separate companies bankrupted (Novatek, Tessart, Ukrsoft)
History of Software Development Market
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Volume of Outsourcing Services Export
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Maturity of SD market in Ukraine
2003-2006: Rapid growth of the industry at the cost of offshore projects With the recovery of global economy, the demand for Ukrainian
developers increased as well.
2006-2008: Market stabilization Large players Luxoft, Global Logic, EPAM, DataArt, StarSoft In 2008 – 800 IT companies with 14,000 employees
2008-2009: Financial recession Slowdown of the market development The part of resources are focused on onshore activities inside the
country Focus on development of inhouse products, service-oriented projects
History of Software Development Market
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IT Outsourcing Services Export Market
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Number of IT Outsourcing Companies
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Main Services Provided by Companies
Custom software development
Dedicated development team
Support and Maintenance, System Administration
QA and Consulting
Embedded Software
Web solutions, E-commerce
Business Processes
IT Hardware
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USA
Germany
Netherlands (Benelux)
France
UK
North Europe (Finland, Sweden, Norway)
Other EU countries
Russia
Other Asia
Key Export Markets
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Key Outsourcing Centers in UkraineCity Population,
millionsPart of outsourcing industry resources, (mostly IT), %
Average salary relative to Kyiv, %
Property price level relative to Kyiv, %
Kyiv 4.0 42 100 100
Kharkiv 2.5 20 85 80
Lviv 1.3 11 75 65
Dnipropetrovsk 2.0 8 80 75
Odessa 1.8 4 80 75
Other 14 70 65
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Average Rates of Ukrainian Companies
Type of specialists Experience (years)
Rate on short project, (< 3 month), $USA
Rate on long project, (> 3 month), $USA
Junior Java developer to 3 14-18 12-16
Software Java Engineer from 3 to 5 18-22 16-20
Sr Software Java Engineer
more than 5 22-27 20-25
Team leader more than 5 27-32 25-30
Project manager more than 5 27-32 25-30
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TOP Clients of Ukrainian Software Developers
Motorola (Freescale)
Microsoft (Celenia)
TDK (GlobalLogic)
Skype (Lohika)
Deutsche Bank (Luxoft)
Sun Microsystem, MySQL –R&D office in Ukraine
UBS Bank (Luxoft)
Apple Inc. (CMK (Software Mac Kiev)
BOSCH (web100, Infopulse)
Ebay (Lohika)
IBM (GlobalLogic)
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Ukrainian Hi-Tech Initiative (hi-tech.org.ua) – association of companies providing IT outsourcing services. The association unites more than 50 companies who employ more than 4500 IT specialists.
ITUkraine (itukraine.org.ua) - аssociation of Ukrainian software development companies. The association unites 28 companies.
Developers (developers.org.ua) - сommunity of Ukrainian IT professionals
JUG Ukraine (jug.org.ua) - Ukrainian Group of Java Developers
Professional Associations and Communities
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Industry Development Trends for 2010-2012 Improvements in marketing and sales of outsourcing services
penetration into new segments of small and middle businesses
Improvements in production processes cost saving possibility of outsourcing in low-cost segments
Adoption and provision of services based on new technologies RICH – technologies iPhone, Android ecosystem Google app ecosystem
Diversification of activities to related segments IT support SaaS development of inhouse products IT consulting
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High-qualified specialists
Strong educational and scientific schools in exact sciences
Large pool of IT specialist
Mature, stable and growing market of IT outsourcing services providers
Openness of Ukrainian economy to foreign investment and international cooperation
Geographically and cultural close to European consumers
Comprehensive law on intellectual property protection
Significant (up to 50%) savings on cost for high-qualified offshore specialists
Main Advantages of Choosing Ukraine as an Outsourcing Destination
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About Ukrainian Hi-Tech Initiative
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Established in 2003
Leading alliance in offshore software development and outsourcing industry in Ukraine
53 companies which employ more than 4500 people are members of Ukrainian Hi-Tech Initiative
Association covers all regional software development centers: Chernihov, Kiev, Kharkov, Lviv, Dnepropetrovsk, Simferopol, Donetsk, Odessa
Ukrainian Hi-Tech Initiative is one of the founders of Central and Eastern European Association (CEEOA) in 2008
About Ukrainian Hi-Tech Initiative
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Market research: Ukrainian IT Services and Products Export Market Research 2003 CEE IT Outsourcing Review 2007 CEE IT Outsourcing Review 2008
Events: Ukrainian Outsourcing Forum 2005, 2006, 2007 Hardware Design Development in Ukraine 2006 Aaron Marcus workshop “Successful User Interface Development” 2007 Job Fair in Kyiv, Donetsk, Cherkassy
Cooperation with Government Concept for Government Program on the development of Ukrainian
Software Development industry – “UKRAINE, THE IT-FIRST NATION”
Content projects ITOnews.eu – information portal for association CEEOA CATALOG.ceeoa.org – directory of ITO services providers from CEE
Main Projects of Ukrainian Hi-Tech Initiative
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Assistance with establishment of partnerships and business relations between Ukrainian and foreign companies
Assistance with setting up and conducting business in Ukraine
Consultations on conducting business in Ukrainian outsourcing services market
Assistance with collaboration on projects implementation
Main Services
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References
“Ukrainian IT Services and Products Export Market Research 2003” by Market Visio and Gartner
“Ukrainian IT-export Market Review 2004” by Techinvest
“CEE IT Outsourcing Review 2007” by CEEOA
“CEE IT Outsourcing Review 2008” by CEEOA
Pictures by © Gutsaluk Oleg, Boyko’s Producer Centre Gallery, artboyko.com
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NET Technology Center WEB100 – the Ukrainian software
development company that provides offshore outsourcing services and deals with the development of IT solutions for B2B communications and business solutions based on Social Media technologies.
NET Technology Center WEB100 is an active member of
Ukrainian HI-TECH Initiative since 2003.
Technology Sponsor of the Series of Webinars
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Thank you!Contact information:
Inna SergiychukCOOUkrainian Hi-Tech Initiative
Phone: +380 (44) 458-17-53Email: innas@hi-tech.org.ua Live Сhat: http://hi-tech.org.ua/Live-chat/
Please follow up the discussion of the webinar in our LinkedIn Group :“Outsourcing to CEE: CEEOA Activities”
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