Content, Business continuity, SI

Ukraine-Russia Conflict May Impact Outsourced IT Services Market Worldwide

KIEV, UKRAINE – OCTOBER 02: The Ukrainian flag flies over the Verchovna Rada, the Ukrainian Parliament, on October 02, 2019 in Kiev, Ukraine. Ukraine has found itself at the core of a political storm in U.S. politics since the release of a whistleblower’s complaint suggesting U.S. President Donald Trump, at the expense of U.S. foreign p...

Russia’s invasion of Ukraine -- which includes cyberattacks and kinetic warfare -- could undermine IT services and software development projects worldwide. The reason? Ukraine is one of the world's leading providers of outsourced IT services, programmers and other types of technology professionals.

Those Ukraine-based outsourcing experts, in turn, support thousands of companies and organizations across the globe.

Indeed, the overall Ukraine IT market generated $6.8 billion in export sales in 2021, up 36 percent from $5 billion in 2020, according to the IT Ukraine Association -- which represents more than 75,000 IT professionals in the country. Moreover, the number of IT specialists in Ukraine rose to 285,000 in 2021 -- up from 244,000 in 2020, the association indicated.

Of major note: 13 of the world's Top 100 outsourcing service providers are headquartered in Ukraine, and eight additional companies have offices in the Ukraine, according to the International Association of Outsourcing Professionals (IAOP). Key companies to know include Elitex, Softserve and Fiverr, according to FastCompany.

Moreover, some major software developers, application providers and technology companies emerged from Ukraine. Examples include Grammarly, MacPaw and Readdle, notes FastCompany.

Ukraine IT Organizations: Most Made War Preparations

Roughly 45 percent of Ukraine IT organizations had an emergency response plan in place ahead of Russia's invasion -- though an additional 47 percent indicated that they were developing such plans as the invasion approached, the association said. (The remaining 8 percent of organizations had no plans in place and no plans under development.)

Amid Russia's invasion of Ukraine, the IT Ukraine Association rolled out an emergency supply plan that aims to provide "qualified consultations to IT companies" on such issues as:

  • CSR initiatives (providing assistance to the army and the refugees, etc.);
  • general mobilization;
  • specialists' relocation and border crossing;
  • first aid training, psychological assistance etc.;
  • business continuity planning; and
  • other issues upon request.

Ukraine Internet Service: SpaceX and Starlink Lend Assistance

Ukraine-based IT service providers that strive to remain online during the war may face challenges outside of their own physical infrastructure and personnel. Indeed, Internet connectivity is particularly poor in southern and eastern parts of the country where fighting has been heaviest, according to Reuters.

With an eye toward restoring and improving Internet service, SpaceX is rapidly expanding its  Starlink satellite broadband service across the Ukraine, Reuters also reported.

Story originally published February 27, 2022. Updated March 1, 2022 with more Ukraine business mentions.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.