According to Tech Ecosystem Guide to Ukraine 2019, the country is the top European exporter of IT services, which generated about $4.5 billion in 2018 with the expected rise to $8.4 billion by 2025. With almost 185,000 professionals involved in the tech industry and over a hundred of Fortune 500 companies employing IT services in Ukraine, the country ranks 11 among the top 50 IT communities worldwide, based on HackerRank. However, holding the leading positions on the global technology market, Ukraine is believed to have the upper hand in traditional IT outsourcing.
This implies that its vendors usually handle certain segments of complex tasks outsourced by high-tech companies for a relatively small fee rather than becoming the partners and system integrators for their clients, which is one of the hottest trend in global IT outsourcing. Indeed, the guide shows that only 30% of the country’s IT services export covers consulting, building R&D centers and growing the vendors’ own expertise, going beyond the outsourcing in its classical sense.
Is this enough to keep afloat on the highly competitive market, especially when reducing cost alone is no longer a key factor for choosing an outsourced company (which is also a trend)? Actually, Ukraine boasts about 50 successful product companies, 3,000+ startups (with $290 million investment in 2018), 25 tech hubs, as well as over 110 research and development centers serving a variety of industries, including games, e-commerce, big data and artificial intelligence, telecommunications, Internet, software development and so on. More than half of the R&D centers are located in Kyiv with other major offices in Dnipro, Lviv, Kharkiv, Odesa and Vinnytsa.
The United States is the key R&D partner of Ukraine, making up 45% of the client companies, followed by EU and Israel. NetCracker, Plarium, Gameloft, Sigma Software, Samsung, Playtika and Playtech have the largest centers in the country, each numbering over 500 specialists. Today, the largest Ukrainian engineering providers develop solutions to address specific business problems, becoming, in fact, a key component of the business. They deliver what Forrester calls product development services, aimed not at tech companies, but at their customers. And this requires much more expertise to provide business consulting, strategy design, UX design, visions and more in addition to traditional programmers and testers.