The Russian IT services industry experienced robust growth during the last five-year period and is expected to continue growing over the next five years, with slight variations due to the outbreak of COVID-19.

The IT services sector correlates strongly with a country’s gross domestic product (GDP). This means the IT services industry will be in line with GDP growth, given its positive correlation. As technological advantages increase year-on-year, many companies are using IT services, in particular IT infrastructure services, to be fully functional and competitive. As a result, the IT services industry follows the same curve as technology, which means the IT services industry will grow with the growth of technology, with slight variations from country to country, but the growth rates of the industry will still be significant.

The Russian IT services industry recorded total revenues of USD19.0 billion in 2019, representing an average annual growth rate (CAGR) of 11.3 percent between 2015 and 2019.

Cybersecurity has become critical for many companies due to numerous high-level threats to cybersecurity and network technologies. This development has boosted growth in the services sector and encouraged innovation and development in this area. In response to the growing threat of cyberattacks, many governments have sought to implement regulations and provide support, fueling demand for such services.

Infrastructure services was the most lucrative segment in the industry in 2019, with total revenue of USD11.2 billion, or 59.2 percent of the industry’s total value. BPO (business process outsourcing) services contributed USD4.2 billion in revenue in 2019, representing 22.3 percent of the industry’s total value.

Infrastructure services are the most profitable segment of the industry, as the IT infrastructure is necessary to operate and manage a company’s internal and external IT services. A fully functional infrastructure is indispensable for any organization, both for employees and customers.

Industry performance is expected to decelerate, with an expected CAGR of 10.7 percent for the five-year period from 2019 to 2024, pushing the industry to USD31.5 billion by the end of 2024.

Demand for IT services is expected to increase in the coming years, as many companies will start working from home to cope with potential virus outbreaks or other types of disruptions. Demand is also likely to increase in the context of the business outsourcing trend.

Companies are bound to invest heavily in IT and new technologies that will help them to continue working normally and work from remote locations or from home at all times. However, at the time of this writing, it is extremely difficult to predict how the industry will develop in the coming years in light of the COVID-19 spread.