Why Belarus is becoming a world center for AI development. IT-industry IT companies in Belarus
This year Belarusian Silicon Valley, as the Hi-Tech Park in Uruchcha is called, will celebrate its tenth anniversary. It all started with a loan of 300 thousand dollars, which was provided by Belarusbank under the guarantees of the president. Today, the HTP unites 152 Belarusian IT companies, and the number of engineers and programmers exceeds the number of employees, for example, MAZ or Belaruskali - 24 thousand people.
Over the past year, the global IT services market has declined by 5%, but Belarusian IT specialists are only increasing their numbers. For example, over the past year, the volume of production of computer programs has increased by 1.8 times and amounted to 12.5 trillion rubles, which is $620 million at the current exchange rate.
At the same time, 90% of Belarusian software products and IT services are supplied abroad - mainly Europe and the USA. By the way, the export of Belarusian IT products to the States is two-thirds of the total exports of Belarus to this country.
Belarusian companies have customers to match the scale. For example, EPAM Systems' clients include Microsoft, The Coca-Cola Company, Adidas, Bosch, Henkel, Volkswagen, British Telecom, Lufthansa, Marriott, Sotheby's.
If you take the Forbes list and look at the ten largest world companies, then five of them will definitely be clients of our programmers, - says Valery Tsepkalo, HTP director.
DETAILS
TOP 3 largest IT companies in Belarus* and their owners
1st place: EPAM Systems FLLC
EPAM Systems is the largest developer of custom software for Europe and the USA, with offices in 17 countries and more than 11,000 employees. The co-owner, president and chairman of the board of directors, 55-year-old Arkady Dobkin, is one of the twenty most successful and influential Belarusian businessmen.
2nd place: SOOO "Game Stream"
Under this legal entity, the famous company Wargaming is hiding, tanks from its game World of Tanks are shooting all over the world today. The company has over 4 thousand employees.
Its founder and largest co-owner, 39-year-old Viktor Kisly, was recognized this year as the coolest Belarusian businessman. According to the Bloomberg Billionaires Index, Kisly's personal fortune is estimated at $1 billion, and his business is worth a billion and a half.
3rd place: IP "IBA ITPark"
IBA Group, a major developer, manufacturer and supplier of information technologies, unites more than 20 enterprises in Belarus, Germany, USA, Russia, Ukraine, Great Britain, South Africa and other countries, it has 2 thousand employees. Its head, 60-year-old Sergei Levteev, ranks 24th in the ranking of the Belarusian rich.
* By sales volume, export of services and number of employees.
At the end of last week, Jan Koles, the head of the Be-Mobile IT company, which belongs to the largest Belgian mobile operator Proximus, arrived in Belarus. The company has been looking for a contractor for the development of its products for a long time, and after studying several countries, it chose the Belarusian CactusSoft. The correspondent of Onliner.by met with the head of Be-Mobile and his colleague Ines Mercart and found out what the Belgians think about the Belarusian IT industry.
Developer cost is not the main factor
- So, you were looking for developers in seven countries, right?
Yes, that's right. Be-Mobile operates throughout Europe, as well as in the US and Latin America - the business is growing strongly, and we needed developers. Among the Belgian companies, we did not find highly qualified people in a short time, so we started looking outside the country.
Three options were considered. The first is the south of Europe. This is Portugal, Spain, because there were economic crises. The second is Eastern Europe: Hungary, Bulgaria, Poland and Belarus. And the third option is Brazil, since we have our own office there, and the country is also in crisis, just like in southern Europe. As a result, we settled on Belarus. The country came up to our criteria, and it's not just about the price. I want to emphasize that the cost of developers is not the main factor for us. What matters is the quality of education, discipline and reliability of people, feedback from other companies with which we work, as well as the convenience of work - language, time zone.
- Still, it's hard to believe in some kind of uniqueness of Belarusian developers...
In terms of education, Belarus is really at a very high level. We also believe that you have a “hi-tech spirit” that is not so pronounced in, for example, Poland. Yes, they also have many IT companies, but this feeling is not there.
In addition, you have a lot of product companies with big names, such as MSQRD. We felt that Belarus has a good combination of education and cultural closeness. And don't forget the influence of the state: it has done an amazing job and was able to stimulate IT companies.
Differences between Indians, Belarusians and Belgians
- And what about the developers from India and China?
A couple of years before we chose Belarus, we considered the possibility of working with India, Pakistan, China. But, to be honest, everything is completely different there. Based on our experience and the stories of colleagues, the cultural differences are too big - this is the first. Secondly, there is a strong difference in communication, a difference in time. Thirdly, direct contact with the team is important, understanding that you are working on one thing. It's hard to explain, but with Indians and Chinese it's different.
- How exactly do the differences manifest themselves in work?
You literally have to stick with them [the Asian developers] to make sure they're doing it right. Do not give feedback until you decide to check the result yourself. Therefore, the result may not be the same as the original task was. They never ask "Am I doing everything right?" They just do it and don't think. This is the main difference between Indians and Belarusians. True, I’ll correct myself that I only work with CactusSoft, so I don’t know how things are with other companies. Belarusians also think when developing, trying to find the best solution.
Now let's talk about the difference between Belgians and Belarusians. In Belgium, people are more involved in product development, they are more enterprising and proactive. If they think that it should be otherwise, they will immediately tell you about it.
Here I am the boss in my company, but people can tell me absolutely everything, and I will not take it badly - on the contrary, I encourage them to express their opinions. Otherwise, employees will become frustrated. And in Belarusian companies, the boss is the boss. You seem to have more hierarchy and procedures. Although we also have this: for example, in government agencies and banks, everyone listens to the boss - after all, he must be right. Here, the size of the company is more important than any cultural aspects. Therefore, we prefer to work with medium-sized companies.
Why there will be no Hi-Tech Park in Belgium
- Now we have begun to pay more attention to product companies, rather than outsourcing companies. How is it in Belgium?
The situation is a bit similar, but what you said started earlier in Belgium. There is an abundance of venture funds, private capital - they invest in companies developing products, web services, SaaS solutions.
Then we have huge outsourcing companies that do not develop their own products, but provide services for traditional businesses - banks, telecom operators, government organizations that need to digitize their processes. And the salaries of such developers are really very high. Here I see great potential for Belarus: I think you need to do more projects for traditional businesses.
- Is there anything similar to the Hi-Tech Park in Belgium?
We have a couple of things that the Hi-Tech Park gives to your companies: grants, subsidies for innovative companies. But this is incomparable with the capabilities of the HTP. For example, Be-Mobile is a technology company, and we pay 34 percent taxes. Imagine: if an employee receives a thousand, then the company will have to pay almost three thousand, taking into account taxes and social contributions.
It seems to me that the transfer of businesses of Russian and Ukrainian IT companies to Belarus is only a matter of time.
- Will the appearance of an analogue of HTP in Belgium harm your economy?
There are many things and mechanisms in Belgium that are not in Belarus: for example, a very expensive social insurance system, companies and citizens pay high taxes. I do not think that our government now has the opportunity to launch a Hi-Tech Park with the same conditions as you. It will cost too much. On the one hand, then more companies would immediately appear, but on the other hand, these missing taxes would have to be collected from someone else.
Impressions of Belarus
- When did you first come to Belarus?
Two years ago, when we were looking for a suitable company for us. Finding contact with potential partners turned out to be very easy, but after getting to know CactusSoft, we chose it. Since then, I've been here for what seems to be the tenth time.
- What did you know about Belarus before your first visit here?
I knew about Belarus from a company from my field - called Gurtam. We have been working with her for about 4-5 years. What we do: we read information based on the GPS position of moving vehicles, and we have a contract with Gurtam - the company works in a similar area.
Just getting acquainted with Gurtam, I was already impressed by the professionalism and ambition of your companies.
Our classic request for foreigners: share your general impressions of Belarus. Not related to business.
For us, Belarus was really an unknown country, and this is very annoying. It is close: only 2.5 hours by plane, as from Brussels to Paris or Amsterdam. The mentality is somewhat similar to the Belgian one: we are also a small country, and therefore we have to be open - otherwise we cannot build a business. The population of the countries is also comparable - Belgium has about 11 million people. You, like us, are open to foreigners, ready to learn, and you know English very well compared to other Europeans. Seriously, even the French, who live next door to the British, speak much less English than Belarusians.
Over the past few years, the Belarusian artificial intelligence market has grown several times. What role do knowledge-intensive communities in Belarus play in the development of artificial intelligence, and why do other countries willingly cooperate with its developers and buy projects?
In short, the recipe for success lies in serious government support, and in return, the industry becomes an important column in the country's economy. In 2005, the High Technology Park (HTP) was founded in Belarus, which has since managed to attract about 400 residents involved in artificial intelligence and deep learning. For example, there are projects from the USA (including Silicon Valley), China, Cyprus, Norway, Israel, Great Britain, Austria, the Netherlands, France, and Russia.
Legislative and educational initiatives have become the basis of this success. For example, the Decree of the President of Belarus Alexander Lukashenko “On the Development of the Digital Economy”, signed at the end of 2017, served as a “green light” for the development of blockchain technologies. Elements of British law have been introduced and the activities of HTP residents have been expanded: now they can range from creating unmanned vehicles to supporting education from IT companies.
The effect of the 2017 decree was immediately noticeable: already in the first half of 2018, the Park's exports grew by a record 40%, excluding new companies. This is even more than in 2017, when for the first time in history, exports surpassed the $1 billion mark and grew by 25%.
In 2018, the Bulba Ventures fund was opened in Belarus, specializing in artificial intelligence (AI) and machine learning. It is noteworthy that one of its co-founders, Yuri Melnichek, previously invested in the AIMatter startup, which was acquired by Google in 2017. This year, the fund has invested in three projects: Friendly Data, Rocket Body and Wannaby. At the same time, retail startup Wannaby raised a significant amount of $ 2 million (in addition to Bulba Ventures, Haxus, a company specializing in computer vision and augmented reality for shopping, also took part in the round). A similar amount was raised by the parental control application Nicola from FaceMetrics from the Belarusian fund VP Capital and the Russian Larnabel Ventures.
Computer vision is becoming a worldwide trend. According to Wannaby co-founder Aleksey Melnichka, Google's purchase of startup AIMatter and Facebook's purchase of MSQRD symbolize the "heyday" of Belarusian AI technologies. After that, it became obvious that Belarusian teams and artificial intelligence products are in demand among large international corporations. The need for specialists has formed new professions data scientist, ML engineer (machine learning engineer), DL engineer (deep learning specialist). In addition to theoretical training, thematic events helped to grow these specialists: ODS meetups and Big Data User Group, Datafest , AI Day , AI hackathons , Datatons , as well as student laboratories at IT companies, thanks to which the diffusion of knowledge within the community has accelerated significantly.
Export orientation
Belarusian service companies turned out to be more in demand in foreign markets than in domestic ones. Even before the “wave of AI technologies” began, large foreign companies began to establish their R&D offices in Belarus (Profitero, IHS Markit, Work Fusion, Yandex, Teqniksoft). It was at this time that the Belarusian IT community realized that it was much more profitable to sell their products and technologies, rather than good engineers, to foreign projects. Thus, international outsourcing has become the main trend in the Belarusian market.
AI products developed in Belarus are used in healthcare, the automotive industry, and agriculture. The American startup Flo (an application for monitoring women's health) was founded by Belarusians and in two years attracted $18 million in investments from partners of the Mangrove Capital fund and the Flint Capital fund. The app is currently available in 20 languages on iOS and Android, with 60% of users located in the US and Europe.
Engineers from MapData, the Minsk R&D office of MapBox, have made significant progress: they use computer vision to recognize traffic conditions on a video stream. The Minsk office of Yandex is developing solutions for unmanned vehicles, speech recognition, and search technologies. Startup OneSoil helps farmers increase crop efficiency, plan agricultural activities and predict yields. To do this, the company uses neural networks, computer vision and machine learning algorithms that analyze satellite images. In one year, the company raised $500,000 in investments from Haxus, Bulba Ventures and investors Yury Melnich and Leo Lozner.
Perhaps, the Belarusian IT sector can serve as an example of how the state can help start-ups to give them the opportunity to grow, as well as to get a return on their own.
Today, residents of the Hi-Tech Park, who develop software products and provide IT services to clients from more than 67 countries of the world, is 751 companies.
If you are interested in finding a partner or an IT service provider, we suggest using the database of HTP resident companies.
Search by HTP resident companies
Softmax telemetry systems
The Softmax Telemetry Systems Company is a domestic software developer organization. The company was founded in 2012, specializes in the development of software products, the provision of services for the implementation of automated systems in such areas as gas distribution, trunk transportation of gas, hydrocarbons and their products, telecommunications. The work uses Java, C#, Objective-C, Swift, PHP, JavaScript, HTML, CSS, T-SQL, 1C, etc. More than 20 domestic and foreign enterprises cooperate with the company.
*INSTINCTOOLS
Development of software and web applications to order on an offshore model.
We provide teams of specialists to carry out the entire cycle of work related to software development: analytics, consulting, design, development, testing, documentation, as well as setting up business processes for managing IT projects.
*instinctools is:
· Stable teams, the possibility of direct interaction with specialists.
· Absolute transparency in work and daily reporting.
· Full adaptation and involvement in processes.
· A wide range of specialists from analytics to operations.
· Favorable rates.
· Open for visits to our offices.
· Information Technology
· Marketing and sales
health care
· Education
Cryptocurrency
Technologies:
Java frameworks
iOS/Android/Windows Mobile
Front End/UI Platforms
Blockchain Development
Go Programming language
They want a lot from us - we do more!
1C-Bitrix
The company has been operating in Belarus since 2013. The company has 7 employees, the main task is the publication of software Bitrix24 cloud service and boxed version, 1C-Bitrix: Site Management and 1C-Bitrix: Mobile application written in php, including their localization and marketing promotion. Products have Declarations of Conformity. The company's products are actively used by more than 8,000 customers throughout Belarus, including large retail chains, online stores, banks, service companies, manufacturing companies, car dealers.
ATON Engineering
ATON Engineering is a domestic organization - engineering and implementation. The company was founded in 2008, specializes in the adaptation and refinement of software products for computer-aided design, the provision of services for the implementation of CAD / CAM / CAE software products in industry, engineering development. Currently, the staff has 6 employees in Minsk. More than 50 domestic and foreign enterprises cooperate with the company.
IBA IT PARK
IBA IT Park is the leading Belarusian development center of the international holding IBA Group, which unites over 2600 professionals from more than 20 enterprises in 11 countries of the world with its head office in Prague (Czech Republic).
IBA IT Park (until August 2013 IT Park IP) was established in 2006 to expand the export opportunities of IBA Group and represent the interests of the holding in the HTP, of which IBA IT Park has been a resident since 2007.
IBA IT Park employs about 1,600 specialists with extensive expertise in the development and maintenance of software on IBM, SAP, Oracle, Microsoft, Check Point, PTC platforms and experience in international projects.
Main activities:
- Custom software development on Java/Web-platform
- Development of corporate portals
- Localization, integration and vertical solutions on SAP ERP, SAP HANA, SAP S/4HANA
- Development of analytical systems, transaction processing systems and Big Data based on SAP HANA, SAP S/4HANA
- Migration and maintenance of business applications
- Design and development of software for the IBM Mainframe and FujitsuMainframe platforms, client-server architecture software for various platforms
- Solutions for enterprise asset management (EAM), retail banking, product lifecycle (CAD/CAM/CAE and PDM/PLM), IT infrastructure (OSS/BSS), IT services (ITSM/ITIL), regulatory and reference information ( MDM/MDG), IT infrastructure user support (ServiceDesk), maintenance and repair (MRO), transport and transport logistics
- Electronic document management systems, business process and corporate content management (Workflow / BPM / ECM), electronic archives of documents
- Creation of data warehouses, business intelligence and budgeting systems (DWH/ETL/BI/CPM)
- Mobile Application Development
- IBAGroup DPC services: hosting of information resources, backup, archiving and data recovery.
Compliance with QMS according to STB ISO 9001 and DIN EN ISO 9001 standards, information security - STB ISO / IEC 27001, software development and maintenance processes - maturity level 4 of the SEI CMMI® model.
IBA IT Park is the winner of the Prize of the Government of the Republic of Belarus for achievements in the field of quality and the owner of a special award in the "Social Responsibility" nomination for "conducting a socially responsible business and creating conditions that ensure social protection of all stakeholders: personnel, consumers, partners, society."
IBA Group occupies a leading position in prestigious international competitions and ratings: The Global Outsourcing 100 of the International Association of Outsourcing Professionals (IAOP), Software 500 of one of the largest publications in the global IT industry SoftwareMagazine, GlobalServices 100 of the GlobalServices publishing house, European IT & Software Excellence Awards of the European edition of IT Europa, GSA European Awards of the Global Sourcing Association, CEE Shared Services and Outsourcing Awards published by CEE BusinessMedia.
ITECHART GROUP
iTech Art Group is a leading software development and consulting company specializing in web and mobile programming. We offer our clients a traditional IT outsourcing model coupled with project-oriented services, enabling our clients to set up and coordinate a dedicated team in one of our development centers in Eastern Europe.
And the reputation of the leading "IT-country" in the Eastern European region has firmly established itself in the world. According to the Global Services 100 rating, Belarus ranked 13th among the 20 leading countries in the field of IT outsourcing and high-tech services. In addition, the TOP-100 of the world's largest companies in this area included three companies with Belarusian roots: EPAM Systems, IBA Group and Intetics Co. Belarus ranks 48th in the UN IT rating.
The direction of software development has existed in the republic since 1998. However, September 2005, when the Decree of the President of the Republic of Belarus No. 12 “On HTP”, laid the legislative foundation for the successful operation of the “Belarusian Silicon Valley” - the High-Tech Park - and attracting investments in the software development industry.
Today, Belarusian companies operating within the HTP are distinguished by progressive management and effective marketing solutions. The industry is characterized by client maturity, the complexity of projects being implemented, a global service delivery network, a diverse portfolio of products and services, and the ability to work in niche markets.
Achievements of the Belarusian Hi-Tech Park
In September 2012, the HTP announced the first billion dollars earned. And by 2020, according to forecasts, this amount will come to the budget from HTP residents annually. According to the forecast of the International Finance Corporation, by 2020 the income of the IT industry in Belarus may reach $3-4 billion, or 4-5% of the country's total GDP in 2012. During the existence of the Park, with the participation of foreign investors, about 6 thousand jobs were created.
Today, 49% of HTP residents are companies with Belarusian capital and 51% with foreign capital. At the same time, experts predict an increase in the number of companies with foreign capital, since today ICT is one of the priority areas for direct foreign companies.
80% of the software produced in the Park is exported. 45% is shipped to the USA and Canada, 30% to European countries, 20% to Russia and the CIS.
In terms of the volume of exports of computer and information services per capita, Belarus occupies a leading position in the region of Central and Eastern Europe. This figure was over $35 per person in 2012. At the same time, the indicator of Belarus exceeds the identical indicators in Russia and Ukraine by two or more times.
software consumers, developed by the residents of the High-Tech Park, became well-known world corporations, automobile concerns Peugeot (France), Mitsubishi (Japan), media holdings British Telecom (Great Britain), T-Mobile (Germany), Reuters (Great Britain-USA); fuel and energy concerns British Petroleum, (Great Britain), Rosenergoatom, RAO UES, London Stock Exchange, World Bank, Deutsche Bank, Central Bank of the Russian Federation, world famous commodity producers Coca-Cola, Procter & Gamble, Colgate-Palmolive (USA), Samsung (Korea).
Options for investing in the Belarusian IT industry
Significant amounts of money can be profitably invested in Belarusian IT projects. The main foreign investors in the Belarusian IT-sphere are companies from the USA, Great Britain, Israel, Germany and Russia.
According to representatives of foreign companies, foreign venture funds are ready to invest up to $1 million in the development of IT projects, and the initial stage of project implementation is of greatest interest to them. Thus, in 2012, the High Technology Park (HTP) attracted $62.5 million in foreign direct investment last year.
To date, the most common option for investors to come to the Belarusian IT industry is to create a new software development company in Belarus from scratch. In 2012, the number of HTP residents was replenished by 13 such companies and reached 118 organizations.
Another investment option is to attract specialized strategic investors who specialize specifically in the IT field. In this case, foreign companies enter the market by acquiring Belarusian businesses.
Another example of attracting investment was the IPO of EPAM Systems on the New York Stock Exchange. In the first hour of trading alone, these shares rose in price by 20% - from $12 to $14.4 per share.
Climate for investors
According to the conditions for Park residents, enshrined by Presidential Decree No. 12 in 2005 and valid until 2020, the HTP is exempt from paying taxes, fees and other obligatory payments to the republican budget, state targeted budgetary and extra-budgetary funds paid from proceeds from the sale of goods, tax on profit and VAT from the sale of such products, land tax for the construction period (up to 3 years) and real estate tax.
Among the favorable preferences are exemption from customs duties and VAT on the import of goods necessary for carrying out activities, and a reduced income tax on employees to 9%. These benefits are provided to residents of the Park, whose main activities are the development and implementation of information and communication technologies and software, both in the domestic market and for export. Benefits are available to 12 more high-tech areas of activity - from the creation of products for micro- and nanoelectronics to aviation and rocket and space technology.
Selected successful Belarusian projects
Information and communication technologies are also among the priority areas where it is planned to attract investments. The number of companies operating in Belarus and producing intellectual products that are in demand all over the world is growing rapidly.
In 2011, the massively multiplayer online game World of Tanks, developed by the Belarusian studio Wargaming.net, achieved a record officially registered by the Guinness Book of Records. The MMO action was able to simultaneously gather on one server the largest number of players in history - more than 90 thousand people. By the end of 2012, the authors of World of Tanks plan to receive $200 million in profit.
Among Belarusian game developers, Viaden Media, the country's largest in the field of gaming applications for mobile platforms and social networks, also stands out. One of her latest programs is All-in Fitness, a top downloaded fitness app in dozens of countries around the world.
The positions of Belarusian developers are also strong in the category of applications for communication. For example, the authors of the popular Viber program, which competes with Skype in the mobile market, are Israelis. In Israel, the main office of the company is also located, the product of which is already used by more than 100 million people in the world. However, all Viber software development is carried out in Belarus. Among the main advantages of Belarusian programmers: the company's management highlights the ability to think and act not according to the textbook, to find non-trivial solutions.
Belarusian companies are traditionally among the leading providers of business solutions. Among the automated systems of the ERP class (enterprise resource planning) in the CIS countries, the product of the region's largest developer of ERP systems, the Galaktika Corporation, whose head office is located in the Belarusian capital, stands out. Today, the company's software is used by more than 6 thousand enterprises of the Commonwealth countries representing various sectors of the economy.
Established 20 years ago in Minsk, the alliance of IT companies IBA Group is today one of the largest developers of high-tech solutions and services in Central and Eastern Europe. More than 20 companies operate under the IBA brand in Belarus, Russia, Ukraine, USA, Germany, Great Britain, Czech Republic, Bulgaria, Kazakhstan and Cyprus.
The IBA Group portfolio includes over 1.5 thousand projects completed for customers on 5 continents and solving problems in various sectors of the economy, including information technology, telecommunications, transport and energy.
One of the leading players in the Belarusian IT market can be called EPAM Systems - the largest provider of services in the development of project (custom) software and solutions in Central and Eastern Europe. Established in 1993, today the company has offices in 12 countries around the world.
The scale of the company allows us to work with the largest customers on the most complex and interesting projects, many of which are innovative in nature. A special place among EPAM projects is occupied by software development for the world leaders in the software industry. The company successfully cooperates with leading universities of our country. The result of such cooperation are joint IT laboratories.
