Ukrainian ICT market could shrink by up to 50% in 2014; IT services less affected than equipment

Prospects for the Ukrainian ICT market (not including telephones) continue to appear bleak, as market intelligence firm IDC has reported that it may shrink by 25% by the end of the year, especially impacting the electronic equipment and software sectors.

The volume of shipments of electronic equipment, in particular, is expected to fall back to the level it reached in 2009.

The Ukrainian ICT market in 2004-2014 (in billion USD, not including telephones)

Ukraine IT market 2004-2014 by IDCSource: IDC

ASUS estimates that the sales of notebooks will decrease by 40-50% this year, while SAP expects a fall of 40% for ERP systems, which will bring the sector back to the level that  it previously reached in 2011-12.

As for servers shipped to Ukraine, IDC reports their volume had already dropped by 38.7% year-on-year as of Q2 2014.

Nikolay Dovzhenko, vice president of the IT service and solution company Incom, says that that the ICT market could decrease by up to 50% this year,  due in part to a lack of public investment. There is a war underway, which has resulted in a lack of economic stability and devotion of resources to efforts at the front.

“In my opinion, the IT industry has reverted to the levels at which it was in 2001-02, when it was in its infancy and the volume of the market was miserable. There is currently an analogous situation with the use of IT in the corporate world,” the Ukrainian newspaper Economic Pravda quoted Dovzhenko as saying.

The IT service sector is projected to shrink slightly this year, but activity should remain above the level reached in 2012.

Edward Savushkin, vice president of IT service company Miratech, believes that many western companies could turn to Ukrainian firms as alternatives to Russian outsourcers.

Sources: ProIT, Economic Pravda.

Topics: Data & reports, Hardware & Electronics, IT services, Software
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