The Russian-Ukrainian conflict and its impact on the Ukrainian IT industry

While martial law has been enacted by the Ukrainian government in some regions of the country, daily life and business in Kyiv and Ukraine remains unaffected. In this article Solomon Amar, President and CEO of Allstars-IT Ukraine provides his outlook and clarity to the current situation.

 

We met Solomon Amar, the founder of AllStars IT Group – a leading international IT services company with offices in Kiev. His company exports IT services from its’ offices in Kiev and Tel Aviv across Europe, US and Israel. A quick glance at his Kiev office, and it becomes very apparent that business is booming. It is located in the renowned Gulliver Business Center in the heart of the business district with facilities provided to ensure only the best work environment for his staff. Spread over two floors, the office is equipped with a massage room, music recording studio, language study space and even a dining room where fulltime chefs cater to his staffs’ every culinary request.

As founder of a Ukraine-based company that leads outstaffing activities for some of the largest companies in the world, Solomon receives constant enquiries regarding the present situation in Ukraine. Moreover, such enquiries often make or break deals as foreign companies grapple with outsourcing to a company in a country believed to be in a conflict state. We sat down in his office to ask the pertinent questions regarding the conflict.

Does the increasing military and political pressure from Russia towards Ukraine affect the state of the local IT market?

The Ukrainian IT industry is strong; we are here to stay! The increasing pressure from Russia does not affect any of our daily business making and service delivering. For those following the conflict from close, the recent developments have come as no surprise to the Ukrainian people. It has not affected the IT market in the past, and it does not affect the IT market today. The imposition of a 30-day martial law is only in effect in certain areas of the country, not in Kiev where the majority of IT firms reside. I’d also remark that the martial law, rather than undermining stability, ensures that no escalation is immediately forthcoming.

Where the IT Market is concentrated in Ukraine:

Can you give us a sense of whether the conflict affects your day-to-day thinking and strategy here in Ukraine?

The martial law only affects 10 out of Ukraine’s 25 regions, the closest of which is still hundreds of kilometers away from Kiev. Given the size of Ukraine, it would be like asking if Israeli IT companies are affected by the conflict in Syria. Even in the regions under military rule, there is no impact on daily life – communication systems, banking services and freedom of movement continue as normal and thus the IT market remains unchanged even in the affected areas.

The location of the military regime as was imposed for 30 days:

We note that Ukrainian IT firms, and particularly AllStars-IT Ukraine, maintain a large presence in Israel – can you elaborate on why that is?

Ukrainians possess an extremely strong work-ethic that underpins their quality and efficiency in the IT market. We have found that the IT professionals here prefer to work for large companies rather than freelance. My view is that the two countries have their technological future intertwined. There are currently more than 15,000 IT programmers in Ukraine providing 28% of the Israeli IT outsourcing, making it the leading IT export country to Israel. Our Israeli clients have found that our services present a high-standard, cost-efficient option with absolutely no compromise on quality control or customer satisfaction. We seek to develop Israeli ideas into successful products.

Distribution of imported IT services to Israel (in percentage):

What do you envisage for the future of IT services in Ukraine?

What we have learned from the Russian conflict is that Ukraine possesses a strong backbone. Not only are international clients maintaining their commercial relationships and operations here, but indeed their presence here is growing exponentially. We have found the Ukrainian people to be a reliable commercial partner, a hard-working people and a nation that continues to inspire us. The Ukrainian IT industry is strong, we are here to stay!

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