Russians want to replace SAP with homegrown solutions

Russian corporations believe they can replace software from Western vendors such as SAP with solutions they have developed themselves. Meanwhile, thousands of IT specialists are leaving the country.

After several major software vendors including Microsoft, Oracle, and SAP announced they were shutting down their operations in Russia, Russian companies are apparently now looking to switch to homegrown solutions. For example, Mikhail Oseyevsky, president of the state-controlled Russian telecommunications company Rostelecom, believes that domestic IT companies could replace SAP’s products with adequate government support.

“We are clear that with government support, cross-cutting projects in IT will also be launched and we will be able to overcome global challenges, for example, substituting SAP,” Oseyevsky said, according to the the German newspaper “Rhein-Neckar-Zeitung” (RNZ), which cited a meeting with various international media.

Rostelecom is one of the largest telecommunications companies in Russia with more than 140,000 employees. The group, whose chief executive maintains close ties with Russian strongman Vladimir Putin, announced a cooperation with SAP in 2017 and has since been working with human capital management (HCM) solutions from SuccessFactors, the cloud provider acquired by SAP.

At that time, Nikita Cherkasenko, responsible for human resources development at Rostelecom, was still singing the praises of the SAP solution: “We want to help build a new digital Russia and know that a company as large as ours cannot be flexible and agile enough without the best HCM solutions on the market.” With the help of SAP SuccessFactors solutions, he said, they are now able to recruit the top talent with the digital skills Rostelecom needs.

IT specialists leave Russia

However, recruiting IT talent may soon be a thing of the past for the Russian telco group. Thousands of specialists are currently leaving Russia. In March alone, 50,000 IT specialists are said to have turned their backs on the country, reported Sergey Plugotarenko, director of the Russian Association of Electronic Communications (RAEC). About 150 IT companies are members of the industry association, including Russian IT providers such as the security specialist Kaspersky, but also Russian representatives of foreign companies such as Microsoft, Apple and Samsung.

Plugotarenko expects the IT exodus to continue in April. The sanctions imposed by the West and the withdrawal of large Western IT groups from Russia are responsible for this, he said. This is likely to make it difficult to line up the developer resources needed to build complex business systems. RAEC officials did not say a word about Russia’s war of aggression on Ukraine. The Russian power apparatus threatens all those who speak of invasion and war with draconian punishments.

SAP CEO Christian Klein condemned Russia’s attack on Ukraine: “Like the rest of the world, we are watching the war in Ukraine with horror and condemn the invasion in the strongest possible terms. An act as inhumane and unjustified as this is an attack on democracy and humanity. Its consequences affect us all.”

In early March, he announced that he would shut down business in Russia. In a blog post, he wrote: “We are stopping business in Russia and Belarus aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia and Belarus.” Existing customers not covered by the sanctions, however, would continue to be served under contractual agreements, the German software company said.

Volodymyr Zelensky: There must be no half decisions

Ukrainian President Volodymyr Zelensky recently sharply criticized this support and called on SAP to completely stop supporting its software in Russia. “Now can be no ‘half’ decisions or ‘halftones’!” wrote Zelensky on Twitter. “There is only black and white, good or evil! You are either for peace or support the bloody Russian aggressor to kill Ukrainian children and women. Microsoft, Oracle, SAP, stop supporting your products in Russia, stop the war!”

In an interview with RNZ, SAP CEO Klein had shown understanding for Zelensky, but at the same time defended his strategy. For example, he said, hospitals, supermarkets and companies that are important for vaccine production and distribution are operated with SAP’s software. “If we shut all that down, it won’t stop the war,” the CEO said. “SAP doesn’t want to presume to know better than politicians and experts.” That’s why the company has taken this path, he said.

Editor’s Note: This story originally appeared on CIO Germany.