The International Association of Outsourcing Professionals (IAOP) has published on its website a preliminary version of its annually updated list of the industry's top 100 players.
As usual, it includes both Ukrainian and foreign players with offices in Ukraine — nine companies in all. In the part of the list relevant to our country, recognized leaders sit alongside names that are little known even within the industry.
Traditionally, The 2015 Global Outsourcing 100 list brings together 75 market leaders and 25 rising stars. Who took which places and which category each company falls into is not yet clear — the final breakdown by score will be presented only on April 15. However, some conclusions can already be drawn by looking at the results of last year's list.
The main surprise of this year's Global Outsourcing 100 is the exclusion of Belarusian EPAM Systems, which had been a fixture of the ranking throughout its existence. In recent years the company had shown negative dynamics, slipping from 29th to 51st place in 2013–2014. Around the same time, EPAM moved from second to third place in the national dou.ua ranking. Even so, EPAM was the only member of the "big five" of Ukrainian outsourcing to make the latest Forbes ranking of the 200 largest companies in Ukraine, taking 179th place with revenue of almost UAH 660 million and profit of about UAH 125 million in the first half of 2014.
The other two companies on last year's list of leaders made it into this year's as well: Russia's Luxoft and Ukraine's SoftServe. The two compete closely in the Ukrainian market, but so far Luxoft has come out ahead both in the dou.ua ranking and in the Global Outsourcing 100. The balance of power will most likely hold this time too: Luxoft has just published its results for the three and nine months of its 2014–2015 fiscal year (which ended in calendar 2014), and in both cases revenue growth exceeded 30%. That said, the devaluation of the Ukrainian and Russian national currencies plays into the hands of all export-oriented outsourcing companies without exception.
By coincidence, just a day before The 2015 Global Outsourcing 100 was published, the World Bank released data on exports of information and telecommunications services by country for 2013. Ukraine performed at its best, increasing exports by 17.5% to $5 billion. The growth trend for this indicator had been broken only once before — in 2009, because of the global financial crisis — but by 2010 the figures had already exceeded the pre-crisis level.
Notably, the $5 billion figure cited by the World Bank turned out to be higher than the $4.9 billion for the chemical industry. According to Derzhzovnishinform, it was the chemical industry that rounded out the top three export sectors in 2013, after the agro-industrial complex and ferrous metallurgy products. As usual, not a word about IT.
"Today our market is characterized by major imbalances," says Mykola Royenko, president of the IT Ukraine Association. The domestic market has collapsed, with staff cuts of 30–50% in recent months. Because of the hryvnia's rapid fall, a significant gap has opened up between the salaries of IT specialists working for the Ukrainian market and those working for export. The military conflict in the country continues, mobilization is under way, and this often becomes an additional argument in favor of emigration. Clients, for their part, are watching developments with concern and sometimes simply freeze new orders. Even expanding existing projects is a great rarity these days.
Given these factors, Royenko does not yet see any prospects for Ukraine's domestic IT market. Qualified professionals do not want to work for a devalued hryvnia that could collapse yet again at any moment.
The magnificent four
The number and line-up of participants with Ukrainian roots in the IAOP ranking have not changed over the past year — it is still the same four companies.
Leaving aside Russia's Luxoft, which holds leading positions in Ukraine, the other four companies featured in The 2015 Global Outsourcing 100 are not among the major players in the Ukrainian market; they are not Ukrainian either, but they do develop their business in our country. They are Artezio, Intetics, TEAM International Services and Softjourn. Belarusian Intetics holds a special place on this list: last year it was a head-to-head rival of Miratech and even managed to beat it by one position. The company has offices in Kyiv and Kharkiv but keeps a low PR profile here. In the American market, which is now its home, Intetics is ready to make itself heard loud and clear — on the eve of its 20th anniversary, its logo adorned the illuminated facade of the NASDAQ Tower in New York's Times Square.
About Softengi
Softengi is not even among the 25 largest companies in Ukraine — its four offices employ about 200 people. Yet in last year's IAOP ranking it managed to take 83rd place in the "Rising Stars" category, right after Miratech. While the ranking's authors cite balanced performance as the latter's strength, Softengi earned its place through good customer reviews.
Its list of completed projects is indeed very diverse, ranging from an automation system for the insurance company PZU and a data processing system for heavy equipment maker Zeppelin Group to photorealistic films about the new Boeing 747-8.