Impact of sanctions pressure on the development of the Russian cloud computing industry
The report by expert Nikolai Shamberg provides an analysis of the impact of international sanctions on the Russian cloud industry. The study analyzes various sanctions factors related to reduced access to foreign equipment and technologies, as well as changes in the level of demand for cloud companies' services. The purpose of the study was to forecast the industry's prospects in the short and medium term.
To this end, in the first chapter, this paper examined the economic and technological nature of cloud computing and its significance for other enterprises in the country. The main benefit is to reduce the cost and simplify the joint rental and operation of computer resources by many different enterprises.
The second chapter showed that despite temporary interruptions in access to technology, software, and hardware, cloud vendors have successfully adapted using available stocks of Used equipment. At the same time, they created alternative (parallel) supply chains and switched to alternative software wherever possible (Open Source and/or domestic software). In addition, some of them have partially switched to using alternative equipment from Chinese companies and/or have begun to deploy their own equipment production.
The third chapter showed that due to the prompt resolution of equipment problems and access to key technologies, as well as restrictions from foreign cloud providers, the demand for services from domestic cloud providers has only begun to grow. An additional reason for this was the fact that other companies that had previously used their own computing power had to start switching to cloud technologies. This is due to the fact that the possibilities of ordering new equipment or maintenance available for small and medium-sized businesses have turned out to be limited. For many of these companies, the transition to cloud infrastructure proved to be more economically feasible, even despite some risks. One of the most serious of these is the fact that companies risk becoming dependent on a particular cloud provider. Considering that 4 of the 5 largest cloud providers, collectively controlling more than 67% of the market (Rostelecom, Sberbank, Selectel, MTS/MGTS, Yandex) belong to companies that occupy commanding heights in the economy, a potentially dangerous situation has arisen in which “small and medium–sized businesses in Russia have no choice but to to use someone else's infrastructure, which, moreover, can be controlled by its direct or potential competitors.”
Finally, some of the risks and benefits for the industry and its customers from the introduction of the State Unified Cloud Platform (Gosoblako) are considered. On the one hand, the industry benefits from the fact that the government itself becomes dependent on the cloud computing industry, since the government will be forced to support the industry, avoid excessive regulation of the industry and protect it from adverse factors. On the other hand, other players and their clients may suffer from the fact that contracts for the provision of state–owned slag facilities have been issued to Rostelecom. The latter, due to such large contracts, will be able to suppress other players through dumping in the future, which may negatively affect competition in the Russian cloud market. Nevertheless, the realization of such risks seems unlikely.
Thus, the study showed that the Russian cloud market is consolidated around large technology, telecommunications and banking groups that themselves need such services for their core business. Due to its strategic role, the cloud business is destined to continue to flourish and will become a growth driver for the entire digital economy of the Russian Federation. In this regard, in the short and medium term, we can expect further rapid growth of the industry.
To this end, in the first chapter, this paper examined the economic and technological nature of cloud computing and its significance for other enterprises in the country. The main benefit is to reduce the cost and simplify the joint rental and operation of computer resources by many different enterprises.
The second chapter showed that despite temporary interruptions in access to technology, software, and hardware, cloud vendors have successfully adapted using available stocks of Used equipment. At the same time, they created alternative (parallel) supply chains and switched to alternative software wherever possible (Open Source and/or domestic software). In addition, some of them have partially switched to using alternative equipment from Chinese companies and/or have begun to deploy their own equipment production.
The third chapter showed that due to the prompt resolution of equipment problems and access to key technologies, as well as restrictions from foreign cloud providers, the demand for services from domestic cloud providers has only begun to grow. An additional reason for this was the fact that other companies that had previously used their own computing power had to start switching to cloud technologies. This is due to the fact that the possibilities of ordering new equipment or maintenance available for small and medium-sized businesses have turned out to be limited. For many of these companies, the transition to cloud infrastructure proved to be more economically feasible, even despite some risks. One of the most serious of these is the fact that companies risk becoming dependent on a particular cloud provider. Considering that 4 of the 5 largest cloud providers, collectively controlling more than 67% of the market (Rostelecom, Sberbank, Selectel, MTS/MGTS, Yandex) belong to companies that occupy commanding heights in the economy, a potentially dangerous situation has arisen in which “small and medium–sized businesses in Russia have no choice but to to use someone else's infrastructure, which, moreover, can be controlled by its direct or potential competitors.”
Finally, some of the risks and benefits for the industry and its customers from the introduction of the State Unified Cloud Platform (Gosoblako) are considered. On the one hand, the industry benefits from the fact that the government itself becomes dependent on the cloud computing industry, since the government will be forced to support the industry, avoid excessive regulation of the industry and protect it from adverse factors. On the other hand, other players and their clients may suffer from the fact that contracts for the provision of state–owned slag facilities have been issued to Rostelecom. The latter, due to such large contracts, will be able to suppress other players through dumping in the future, which may negatively affect competition in the Russian cloud market. Nevertheless, the realization of such risks seems unlikely.
Thus, the study showed that the Russian cloud market is consolidated around large technology, telecommunications and banking groups that themselves need such services for their core business. Due to its strategic role, the cloud business is destined to continue to flourish and will become a growth driver for the entire digital economy of the Russian Federation. In this regard, in the short and medium term, we can expect further rapid growth of the industry.
