Estimation of the perspective development of Ukrainian IT Services exports market.

Key points

The volume of the Ukrainian market in 2003 is $ 70 million. The market growth is 40% in comparison with 2002.

The main prerequisites for active growth of Ukrainian IT Services export market are as follows: political stability of the state, increasing of the number of qualified IT specialists, active growth of the allied industries (telecom sector), profitable geographical position of Ukraine, and also a special status in corporation with European Union.

Approximately 300 of IT Companies that export software are working in Ukraine nowadays. 30% of them have been on the market for more than 10 years. There are about 20-25 the largest well-known commercial companies in Ukraine; they are mainly situated in Kiev, Lvov, Kharkov and Dnepropetrovsk. There are about 200 small companies and independent programmers groups, their share in the total market volume is between 10 and 65%, and we consider this percentage to be 50%. There are no international companies development centers in Ukraine, instead there are a lot of small companies development centers that are not advertised anywhere.

The market participants are set to optimism and foresee that in the nearest two years the volume of the IT Services export is to become two times as much, i.e. average annual rise can be from 40 to 50%. Today we can foresee high speed rise for the following reasons: a) Ukrainian government initiates the programs lead for industry development; b) the largest market participants bend every effort to foreign market advancement.

The export share in the general volume of IT Services is aproximately50% and will have grown to 60% by 2005.

The market is oriented for the orders, the products model part of the market does not exceed 10 %; it is foreseen that its part will be increasing and in 2005 can achieve up to 35%.

We suppose the products to be more competitive.

The amount of the specialists of the whole Ukrainian IT Services and products export market in 2003 varies between 20.000 and 25.000 (the information is taken from the open sources).

30.000 of IT-educated graduates annually enlarge the labour-market. The average salary of the industrial personnel involved into Ukrainian IT services and products export business makes up $300 to $1500, and that of the management one - $500 to $2500. It is confirmed with the data taken from the open sources.

Taking into consideration the salary increasing dynamics of Russian companies dealing with IT services and products export we can draw the conclusion that the salary of Ukrainian programmers working on the export market is 30-50% less than that of the Russian colleagues of equal qualification.

The services and products offered by Ukrainian software exporters to the foreign customers you can find in the table below:

Generally, the companies are oriented to vertical solutions development in the following spheres: health protection, industry and commercial services.

The experts remark the market is on the active formation stage, the market leaders are aware of the necessity of efforts consolidation within Ukraine and cooperation with Russian and Byelorussian developers. The mass flow-out of the IT specialists abroad has almost stopped; a lot of them return to Ukraine and found their own business.

Nowadays Ukrainian companies' customers are: companies and organizations from the USA. Besides, the orders come from the countries of Western Europe and Russia.