„This war thing is very bad, but we are still working. When Kharkiv was bombed, one company announced that they will be delayed – but only for ten minutes“, – he says with a smile. During all videocall he stayed calm and strongly optimistic.
Mr. Savchenko is an IT businessman based in Kyiv and president of European Software Engineering Association based in Ukraine, which includes 50 companies. According to him, members of this association not only provide IT solutions, but also develop products, outsource and cover other IT business spheres.
As stated by mr. Savchenko, in Ukraine there are 250-300 thousands of IT developers and it brings 8-8.5 billions of US dollars each year, provided by more than IT 5000 companies.
„And if we talk about European Association of Software Engineering, which is based in Kyiv, it consists of small to middle-size companies – because those make a lot of value for economics of the state“, – explains head of association.
According to him, war brought 10-15% loss of revenue for whole IT business of Ukraine, but for companies which operate only inside Ukraine and Russia, it caused 70-80% fall – because Ukrainians stopped working with Russia, and the local Ukrainian market is very small. „Such companies are under big risk to be closed“ – warns mr. Savchenko.
Also big IT product companies which operate inside Ukraine had to fire noticeable amount of IT staff: mail operator „Nova Poshta“ fired 400 IT specialists and e-commerce project „Rozetka“, which makes 2 billions US dollars revenue per year, had to fire 1200 IT developers, managers and other IT staff.
„Different e-commerce projects which operate in Ukraine were affected really hard“, – explains IT businessman.
10% of GDP
But the main IT business in Ukraine are the services. „I'd say around 70% of IT business is outsourcing, outstaffing, providing solutions and customizing software. Companies are working with Europe, US, Australia, and the war did not effect this too much yet. Of course, some clients were lost, but it was really small percentage at first, – says mr. Savchenko. – But the problem is, foreign clients now are scared of war, delays and deliveries of the projects, so they start to look for different places, to develop the projects from scratch. They try to find developers in Romania, Poland, Croatia or even India. And that could be a very big problem for IT market of Ukraine, in two or three months“.
He tells the stories how some clients after seeing emails were written from Ukraine did not respond to it, though the projects were already being developed abroad (in Poland). „Also, we got lots of messages from some big partners in Ireland or Germany, saying they will not hire any more staff from Ukraine“. Mr. Savchenko says Ukrainian IT companies have running contracts that will last for two or three months, but it is totally unclear what may happen after that.
He reminds that Ukrainian IT sector has seen many crises – like 2000s' dotcom, 2004 revolution, 2008 global economical crisis, start of war in 2014 – and all those things taught that dangerous things may happened.
„All this lead to very strong position. Just some time ago IT sector took 5th place in Ukraine by revenue, and in next 3-4 months it may generate 10% of Ukraine's GDP. So here comes both good and bad news: we can reach 10%, but also big part of IT business might stop“.
After being asked for reasons why foreign companies abandon partnership with Ukrainian companies, mr. Savchenko says he believes it's because no one have an experience and cases in doing IT business with companies from the country that is on active war.
He admits that first days of war in Ukrainian IT sector was quite chaotic – nobody knew what might happen next, what people should do, leave abroad or stay at home – and that might be the reason why outside companies got scared to lose time and projects, being afraid that Ukrainian developers will not deliver their part of work in time.
„For first two or three weeks communication was really bad, there were problems with internet connection, some IT companies started relocating to other places. Also, there was a problem of growing rumors about whole war situation – but one thing is seen from Ukraine and it might look different from USA, so it's hard to explain for a client, that all is fine and 70% of Ukrainian territory is safe and workable“, – says leader of association.
Right now IT sector of Ukraine is urging the government to announce on all official channels, that despite the ongoing war, the IT business is also fully functioning. „And that's why we launched platform, in which Ukrainian IT developers can submit their benches, teams who are available now, and clients can upload projects to develop. This platform should help whole market to find new clients and let clients help Ukrainian IT people or develop something they need. Our message is – do not give us donations, give us work!“, – says Vladislav Savchenko.
Already known to the world
Why choosing Ukraine at all? „Ukraine is one of the better places to develop some strong and cool projects. Because we are not only programmers, we also are a great engineers, who are coming from our strong schools and universities. And maybe you did not hear about it yet, but one Ukrainian company makes navigation for BMW, „Mercedes“ and „Audi“. It was developed in Ukraine by one huge outsourcing company“, – says mr. Savchenko.
Another Ukrainian automotive technology company „Apostera“, which is working in the field of computer vision and augmented reality, recently was acquired by subsidiary of „Samsung Electronics“, for 40 or 50 millions US dollars.
„And we have 10 000 such developers, around the world, – says head of IT business association. – That's why our community is very strong“.
Another great example of Ukrainian IT business would be „Ajax“, which works in the field of physical security and alert systems. „Before the war value of this company was half of billion US dollars“ , – notices mr. Savchenko and calls it „like „Apple“ in the world of security“, with thousand developers and engineers in offices all around the world.
And there are more Ukrainian IT companies with such a worth.
Safe zones
So is it safe to start a deal with an Ukrainian IT company, right now? Mr. Savchenko assures, that it is really safe and that it could bring mutual benefits.
„Right now we are working on a proposal to guarantee the results. If you apply in our platform, the association gives the guarantee, that the project will be developed and reach the client. When you develop a project and hire a team, you do not pay directly to the company – you pay to the platform, and only when job is accepted by the client, money will reach the developer“ , – explains IT businessman. At the moment the association is working to implement such a guarantee in governmental level.
Also, EASE tries to find developers outside of Ukraine. It means, it would be an Ukrainian company, but it might have it's developers in Romania, Poland, Turkey and other countries. Also local Ukrainian developers move to safe countries and keep working from there.
„And there is one more thing. Ukraine is starting special zones for IT, for example in Zakarpattia region. It is near Hungary, Slovakia and Poland – very close to Western Europe – and it's very safe. Also, developers get ant option not to get mobilized to Ukrainian army – because developers and managers can work in sphere of economics and get revenues for the country in US dollars and euros“, – explains head of EASE. The staff would still be in the lists in the army for special occasions, but won't be called until it's absolutely necessary.
And such zones with IT hubs are being launched in Zakarpattia, Lviv and Chernivtsi, some of them are as far as 500 kilometers (more than 300 miles) from the war zones.
Skills, experience and variety
At the end of the meeting, when being asked to summarize what are the main benefits for a foreign businesses of starting a deal with Ukrainian IT companies, mr. Savchenko speaks openly and without any doubts: „It's our skills – because we've developed many different projects. We have experience in blockchain technology, fintech, e-commerce, logistics. If you want something special in software development, you can find it in Ukraine“.
When asked about the price, head of EASE admits than in the beginning the main financial rival in IT sector was India, but now situation is different. „10 years ago we started a solution providing strategy, and now the prices are like in Poland, so for foreigners there is no difference in hiring a Polish or Ukrainian IT workforce – the price begins from around 30 USD per hour (and of course, it could double or triple if there is some special project). But in Ukraine you get great knowledge, skills and wide range of expertise“.
„We can even break any CAPTCHAs in the world, – says Vladislav Savchenko with a smile and the end of the call. – Actually, we already did that on one project, for parsing information from one foreign supermarket chains. We have some skills in things some people didn't imagine it before“.
