Five Challenges in the Business of Technology Vendors in Russia

The majority of tech vendors shut down their operations in Russia in March, but this does not mean that the work of Russia’s geographically responsible executives will be reduced. Sanctions have created new challenges, even if transaction volumes are reduced or reduced to zero.

These are important challenges for technology vendors operating in Russia (or until recently, operating in Russia).

ICT hardware vendors prepare for a surge in delivery to Russia over unauthorized channels

The sudden decision by so many suppliers to stop shipping to Russia has created immediate demand for those products, wherever they can be sourced.There was even an effective announcement by the Russian Prime Minister Approve imports through unauthorized channels..

These alternative channels could range from small traders reselling iPhones brought to Russia in personal luggage to large numbers of office or data center products reshipped from their original destinations in Asia or the Middle East. there is. In March, Russian-based companies were desperate to fill holes in equipment inventories, and demand for recycled products was rising.

This situation creates a wider range of corporate risks that go far beyond the challenges of channel management. If a suitcase full of microchips and disk drives invades Russia, European or US manufacturers could violate technical sanctions. But can this be practically prevented?

Software vendors prepare for the spread of Russian software piracy

Russia-based organizations that have standardized Western software products are facing the battle of time to keep their infrastructure and applications working. Depending on sanctions and the policies of the Western vendor from which you purchased the CIO, your license or subscription may be suspended, you may not have access to support, or you may not have the opportunity to purchase a new product or version. I have. ..

In almost all cases, features and support will only be available until your current contract expires. Coupled with this, it is no longer possible for Russian courts to support the enforcement of intellectual property rights of Western software vendors. Users inevitably handle the problem with their own hands and keep the system working as much as possible.

Software vendors are working on a tremendous number of customer scenarios

Software vendors that existed in Russia in early 2022 are now addressing the complexity of how much business they should do with their Russian customers. Some vendors have chosen to withdraw completely from the Russian market. Others have decided to stop new sales but support existing customers.

However, in all cases, the process of breaking the commitment in Russia has created a myriad of scenarios for different customers. If a Russian customer is subject to economic sanctions, the case is simple. Your subscription will be canceled and you will not be able to purchase any more services.

Some customers are not directly authorized, but cannot provide debt repayment. In such cases, you may need to adjust your trading terms. Most vendors seem to respect existing contracts and subscriptions, but do not promise to renew them. But even in this case It can still take years to “leave” the Russian marketAs SAP explained.

Many vendors have resolved to stop new sales, but existing customers still have to buy upgrades, forcing them to limit this to new customers in most cases. When software is offered as a service, this creates another aspect of complexity.

If the customer and his users are based in Russia, the service may be terminated. So far, these services still seem to be offered in situations where customers are billed outside Russia and users are in the country.

What to do with Russian-based staff?

Suspending Russian operations created an immediate staffing dilemma. Western ICT vendors employ thousands of staff in Russia. Not everyone is ready to send a verbosity notification. Acting in a hurry can be against the local government.

Can Russian-focused staff be reassigned to support businesses outside Russia? Is it possible to move staff outside Russia? In some cases, employers are aware that Russian staff have moved out of Russia on their own initiative. In this case, you may need to find a way to keep these people employed and paid in a third country.

If the company is facing locally, there is an option to try to sell the local business to a Russian partner.Another option is Sell ​​operations to a local management team..

New team dynamics challenges

Beyond Russia, everyone in Eastern Europe is stressed. The Ukrainian, Russian, Polish and Romanian teams are in a personal and humanitarian crisis. This requires sensitivity in managing these teams and active efforts to support their mental health and well-being.

An additional challenge is that collaboration between Russian and other European staff can be tense. Administrators should be aware that the current propaganda wars both inside and outside Russia are exacerbating human interactions everywhere.

Separating business and politics becomes increasingly difficult, but it becomes even more important for a team to continue to function.

Please contact us for more information Robert Farish Also Aniel Guedes,or Drop the details on the form in the upper right. Five Challenges in the Business of Technology Vendors in Russia

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