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The current global situation will make the Ukrainian IT market even more attractive

The current global situation will make the Ukrainian IT market even more attractive


15.06.2020 (№ LDaily #14)

The current global situation will make the Ukrainian IT market even more attractive

Vitaliy Karmazinsky, Director of Luxoft Ukraine, when speaking with an LDaily journalist, stressed that, despite the current coronavirus crisis, the IT sphere will continue growing and driving the Ukrainian economy. According to Vitaliy, there will be a boom in IT services as soon as the world overcomes the pandemic, and new digital trends will appear. This boom is now starting, meaning the domestic IT industry is ripe for investment.

LDaily: 2020 will be extremely difficult for the economy and the IT industry. The growth of the IT sphere might slow down. Today, companies are consolidating. They are focusing efforts on protecting employee health, retaining key customers, and positioning in the market. How did the coronavirus affect the company?

V. Karmazinsky: The health of our staff is our absolute priority at all times. As soon as we noticed the scale of the virus outbreak, we tried our best to protect Luxoft employees. Those who were on business trips returned home. Next, we recommended — and then urged — our employees to work from home.

Currently, more than 90% of specialists work remotely in Kyiv, Odesa, and Dnipro. The company has provided them with all means of remote access to network resources, technology, etc.

It turned out that most professionals work from home just as well, and sometimes even better than they do in the office. After a certain adaptation period, the workflow within the company has normalized.

LDaily: Are you going to optimize the budget or change your business model? Have you stopped any projects?

V. Karmazinsky: Undoubtedly, the global economic crisis and the coronavirus pandemic will slow the rapid growth of the IT sphere in Ukraine. I can’t tell you exact numbers yet. Still, I am sure that the IT sphere will continue growing and driving the Ukrainian economy.

Nowadays, companies around the world are cutting costs, including costs for IT services, which also affects us as a service company.
We had to suspend some minor projects. I hope that the situation will begin to improve and we will resume these projects soon.

We are transferring people from suspended projects to actively developing ones to avoid negative consequences, including staff cuts. We are also still hiring from the market (although less now), as not all needs can be covered by internal resources.

It seems to me that we feel more confident than other companies during this crisis. Luxoft, as a global company and part of DXC Technology, a US company, has a significant margin of safety thanks to its customer diversification and long-term agreements with world leaders in various industries.

At the same time, we believe that the difficulties brought by the crisis will also bring new opportunities. Many companies are continuing to transform their businesses to function under the world’s new conditions, and they are looking for new ways of doing business. These changes often require digital adjustments as well as the development or implementation of new electronic systems.

Our mission is to consider these opportunities and adjust our skills and services to the new market needs. Eventually, we will become stronger after the crisis.

LDaily: Can we peek behind the curtains? What projects do Ukrainian Luxoft programmers work on? Who are your customers?

V. Karmazinsky: All key business areas are represented in Ukraine, Luxoft’s largest location. That means we have projects in finance, automotive, energy, telecommunications, and so on.

The line of car-related projects continues to grow despite the general economic strain. This is great news for us. In this segment, we are developing solutions related to navigation systems and autonomous management for dozens of global car brands. Mercedes-Benz cars, for example, have infotainment systems developed by our specialists.

We also have one of the largest US oil and gas companies among our clients. We are developing a solution that allows us to collect, process, and visualize (including in 3D) data at the stage of primary geological exploration.

In addition, basic systems for a leading Swiss online bank and many other projects were developed in Ukraine.

LDaily: There are many opportunities for the development of the IT sphere now. The coronavirus outbreak has driven the evolution of smart cities and parks, online health care services, educational platforms, technology for stores with minimal or even no staffing, online food delivery services, 5G networks, and services based on them. Have you received any orders in one of these areas?

V. Karmazinsky: Sure, we’re witnessing the changes in human patterns of consumption. Plenty of processes are shifting online. So, as soon as the world overcomes the coronavirus pandemic, there will be a boom in IT services. This boom is now starting, making IT a good field for investment.

Companies are now trying to adapt to new conditions, but due to the economic crisis, processes are rather slow. Most companies are focusing on the short-term, i.e. overcoming the negative effects of the crisis so far. However, everyone will look for new opportunities in a modified business environment soon.

As one of the world’s leading business infrastructure deployments, DXC Technology is well positioned to assist its customers in this situation. Luxoft, in turn, successfully complements this offer by developing and implementing specialized software that provides customers with complex solutions from a single vendor.

LDaily: How will the IT sector and service economy change after the end of the pandemic and economic crisis?

V. Karmazinsky: As for the Ukrainian IT market, the current crisis will make it even more attractive both internally and internationally. The need to develop innovative software can attract new customers who were previously satisfied with older systems supported by large Indian companies. They are facing difficulties during the current crisis.

Even more Ukrainian young talents will get interested in the IT sector as a reliable and promising area of development. Perhaps the state will also pay attention to the development of IT, which has not stopped growing in these difficult times and has diversified the economy. For the further growth of the IT sector by 20-30% annually, we need more young technical specialists. Today, we have only 30 thousand graduates annually.

As for the technological component, the Ukrainian IT sector will continue developing from a purely outsourcing model in which the time and skills of Ukrainian programmers in medium-sized projects are essentially sold to high-tech projects with a higher added value. I’m sure the expertise, complexity, and specialization of the projects will only increase.

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