From: avg@rodan.UU.NET (Vadim Antonov)
Newsgroups: comp.programming
Subject: Re: Software development in Russia?
Date: 22 Dec 1992 23:48:01 -0500
Organization: UUNET Technologies Inc, Falls Church, VA
NNTP-Posting-Host: rodan.uu.net

In article <1992Dec22.173838.1@dhvx20.csudh.edu> vnoble@dhvx20.csudh.edu writes:
>I am contemplating investing some money in software development in Russia and
>selling it here in US.  It seems to be a good idea since software is a heavily
>labor-consuming product with little hardware investment required to start it
>out. 

Forget about it.  You apparently isn't aware that the main problem
with the software in US is that the competition is already too
strong and the products themselves aren't decisive factors in
capturing the market share; the marketing, advertising and support
are. Get Microsoft for example -- the company succeeded selling
nothing more than incredible crap no knowledgeable person will
ever buy for himself. Now think about how do you will provide all
those "services" with people sitting in Russia.

There are three classes of software products on the market:

1) toys for computer illiterates (spreadshits, word processors,
   fancy file handling utilities) which can be written by a single
   person in less than a year. Development costs are about $100K,
   the risk is moderate.

   The market is saturated with that kind of stuff and people choose
   between such programs by the size of ads in PC Magazine.
   Software manufactured in Russia simply has no chance to succeed
   in that market.

2) professional software (databases, CAD, banking, etc) are usually
   developed with a specific consumer in mind. The market is relatively
   limited and requires strong "ties" (aka expertise in the particular
   area, personal links, government contracts etc). Development costs
   are in range $1M-$10M with moderate risk (mostly of technical
   nature).

   As a rule, Soviet programmers do not have expertise (and surely do
   not have friends in high places) required for succeding on that
   market. The projects require teamwork and the few groups capable
   of that kind of work in Russia (like the DEMOS team i used to work
   for) are already overloaded working for the local Russian market.
   Those teams are not interested in producing software "on demand"
   except if there is an opportunity to make relatively good bucks
   without much of hassle because they're already successful. As a
   rule their activity produce some "by-products" of the 1st class
   which probably can be marketed in the West because they're
   essentially "free". An individual "imported" programmers can
   work for US companies doing that kind of software rather successfully
   (to pick the expertise on the place is not a big deal for the
   usually self-educated Russian programmers).

3) research projects are usually require people with outstanding
   abilities which cannot be acquired by training. Arguably those
   people are equally distributed in the general population with no
   relation to the social and economical conditions and/or education.
   There is a strong evidence that there is a number of people of
   that kind in Russia who are virtually unemployed, for their
   abilities aren't much useful in getting the short-term profits.
   However, it is extremely hard to find them (or for them to get
   recognized in the West credentials) becasue the Soviet "scientific"
   society was a labour union of bueraucrats. Getting PhD in USSR was
   more an excercise in conformism and getting iron buttocks rather
   than act of creativity.

   With some luck and lots of research it is possible to find a
   team capable to producing something which will create revolutionary
   new products -- with odds 1:100. If you got spare $10M you can
   give a try. With a luck you may get richier that W.G. More likely,
   not. Only big companies in US (like AT&T, IBM, Xerox or the federal
   government) play these games.

Resume: you'd be much better off importing programmers from Russia than
        importing software. 

--vadim
Newsgroups: comp.programming,comp.parallel,comp.realtime,comp.graphics