Consultants and software developers in Ukraine have continued to grow despite the war, now in its fifth month, and the resulting mass movement of thousands of IT professionals.
Ukraine had become a software outsourcing destination in Eastern Europe in recent years, as enterprises looked for ways to address the IT talent shortage. Russia’s February 24 invasion caused companies operating in Ukraine to move operations to safer locales within the country or assist employees relocating to other nations.
Custom development consultancies, however, have hung on, opening an economic front in the continuing conflict.
Softjourn, a software developer and consultancy based in California with an R&D center in Ukraine, has seen current clients sign on for additional projects with the company. Those commitments have “provided more revenue growth during these months than over the past years,” said Sergiy Fitsak, managing director and technical director of Softjourn.
In addition, Softjourn reported 150% year-over-year growth in new client signings since the war began. Fitsak said he believes that might be due to companies wanting to partner with Ukrainian R&D teams to support the country’s economy.
Alexei MillerCo-founder and managing director, DataArt
DataArt, a software engineering firm based in New York, has significant operations in Ukraine and other parts of Eastern Europe. Alexei Miller, the company’s co-founder and managing director, also pointed to expansion.
“DataArt keeps growing,” he said. “New sales are coming in, and many current clients are expanding.”
Customer demand for development services, amid the dearth of IT talent, keeps the business flowing. “Everyone still needs to execute projects,” Miller said.
Personnel, pricing challenges
Still, the ongoing war has created challenges for the hiring consultancies and employees. Software developers continue to experience worker relocations, as they did in the early weeks of the war. DataArt has not only seen Ukrainian employees on the move, but also its Russian developers who have relocated to Armenia and other countries. DataArt ended its operations in Russia in mid-June.
“The big migration continues,” Miller said. “Some folks are moving further, some are staying, some are returning to Russia.” DataArt has people in 62 countries, up from about 20 nations before the war.
The relocation of DataArt’s workers to higher-cost-of-living areas influences pricing. The prices DataArt charges correlate directly with labor expenses and business operations costs, such as offices, infrastructure and taxes, Miller noted. “Costs are going up, so prices are going up too,” he said.
DataArt’s task is to make price increases transparent to customers — and show how higher rates are in their best interest.
“We have to help clients see that paying more is a good idea, not the inevitable evil, because it reduces risk,” Miller said. “This idea of paying more for less risk has always been part of the decision-making process, but now it’s much more explicit.”
Service interruption, security issues and worker displacement are among the risks DataArt aims to mitigate for customers. Other location-level risks include whether employee background checks and local authorities can be trusted, Miller said. Supplier-level risk mitigation, meanwhile, addresses customer worries that developers assigned to a project could be reassigned to a higher bidder and abandon their work.
At Softjourn, Fitsak said the company has not raised prices as team members adapt to working in other countries. That’s because team members were already working remotely before the war. Employees work in distributed teams worldwide and have the option of working on a flexible schedule in any time zone, he noted.
Softjourn’s employment levels, meanwhile, have increased during the war, with the company growing 14% in Ukraine and 28% overall, Fitsak added.
Gartner pegs cloud consulting growth at 17.2%
Cloud consulting continues its rapid rise, outperforming the broader IT services sector and inspiring a steady stream of acquisitions.
Gartner last week forecast cloud consulting and implementation, along with cloud managed services, to grow 17.2% in 2022, reaching $255 billion worldwide. The market research firm expects IT services overall to grow 6.2% this year to $1.3 trillion. The scarcity of IT skills fuels demand for IT services, Gartner said, noting that it anticipates the shortage to ease by the end of 2023.
In the meantime, cloud professional services remain in high demand. MSPs and consultancies are snapping up cloud specialists to satisfy customer appetite for cloud assistance. In a recent example, Ensono, an MSP and technology advisory company based in Downers Grove, Ill., purchased AndPlus, a cloud-native development firm in Southborough, Mass.
MSPs have been an active segment for mergers and acquisitions in recent weeks.
Deloitte expands cybersecurity platform
Deloitte on Monday added modules to its managed extended detection and response (MXDR) platform, providing what the company called “more targeted intelligence” to preempt cyber attackers.
The consultant’s MXDR SaaS platform consists of intelligence capabilities and several integrated modules. New features include Cyber Security Intelligence, an expansion of the platform’s core intelligence offering that now includes data from Deloitte’s proprietary tools and CrowdStrike Falcon X automated threat intelligence. Deloitte also rolled out four additional modules: Dynamic Adversary Intelligence; Digital Risk Protection; Active Hunt and Response; and Mobile Prevent, Detection and Response.
With the MXDR platform, Deloitte can readily add its own modules and those of its alliance partners, noted Curt Aubley, MXDR by Deloitte leader and Deloitte risk and financial advisory managing director. The platform’s reference mesh architecture, based on standards such as JSON, RESTful API and OAuth 2.0, helps the company incorporate third-party technology, he said.
The company’s technology alliances include relationships with AWS, CrowdStrike, Exabeam, Google Cloud Chronicle, ServiceNow, Splunk and Zscaler. Additional alliances are in the works, according to the company. Deloitte has also pursued acquisitions to bolster its cybersecurity offerings.
Microsoft gets new channel leadership
Microsoft has appointed Nicole Dezen to lead the company’s partner strategy. Dezen becomes chief partner officer (CPO), a newly created position, and will keep her previous role of corporate vice president of global partner solutions.
Dezen takes on the CPO role just in time for Microsoft Inspire, the company’s annual partner conference, which runs July 19-20. Dezen replaces Microsoft’s former channel leader, Rodney Clark, who joined Johnson Controls as vice president and chief commercial officer in June 2022.
- Accenture agreed to acquire The Stable, a digital marketing agency based in Minneapolis. The Stable provides omnichannel commerce services. The company’s 400-plus employees will join Accenture Song, formerly Accenture Interactive.
- American Honda Motor Co. selected Kyndryl, an IT infrastructure services provider, to centralize its IT operations. Kyndryl, headquartered in New York City, will create an integrated on-premises and cloud-based environment supporting operations such as sales, finance, manufacturing and R&D. In another customer deal, Kyndryl is pursuing a digital transformation project at Motiva Enterprises, an oil refinery company based in Houston.
- Jungle Disk has rebranded as CyberFortress, a San Antonio company that provides managed data backups. The name change follows the integration of the assets of KeepItSafe, LiveVault and OffsiteDataSync, all of which Jungle Disk acquired in 2021 from J2 Global.
- IT professionals view boosting IT security, harnessing automation to increase productivity and migrating to the cloud as their three top priorities, according to a Kaseya survey. The company, which provides software for MSPs, polled close to 2,000 people worldwide.
- Sada, a business and technology consultancy based in Los Angeles, appointed Sandy Hogan as global chief revenue officer, a new role for the company. Hogan was previously senior vice president for worldwide commercial and partner sales at VMware.
- Bitdefender, a cybersecurity company with U.S. headquarters in Santa Clara, Calif., launched a managed security service for MSPs. MDR Foundations provides continuous threat monitoring and response, threat hunting, and security experts, according to the company.
- GroupSense, a digital risk protection company in Arlington, Va., entered an MSP partnership with ProVelocity. With headquarters in Colorado, ProVelocity offers managed and professional IT services.
- DoiT International, an MSP and multi-cloud software provider based in Santa Clara, now offers its automated cloud cost optimization product, Flexsave, to companies without a full partner or MSP relationship with DoiT.
- Martello Technologies Group, a digital experience monitoring provider in Ottawa, has inked a partnership with Datacom, an IT services company based in New Zealand. The relationship lets Datacom offer Martello’s Vantage DX as part of its Microsoft Teams managed service. The deal also covers software reselling.