One of the points from the Services Globalization Trends 2007 report of NeoIT is that, In the year 2007 Russia will emerge as a strong contender in the IT Outsourcing market.

Russia is currently the 3rd largest IT outsourcing supply market, behind only INDIA & CHINA.

The Russian ITO industry is expected to grow at 40 - 45 % in 2007.

Below is a chart i got from the Third Annual Survey on Russian Exports of Software:

Also this excerpt of the report makes some statements to the contrary - Will need to understand it better,

The 28% increase in exports on 2004 is clear evidence that growth rates have slowed down. Closer inspection of the data from last year's survey shows that this slowing down is happening for the second year in a row. Given that Russia's share in the rapidly expanding software export market - and especially the market for ready-made solutions - is not particularly significant, a slowdown in growth can only give cause for concern, especially given that the sector has substantial growth potential.

Export growth is slowing down because of two major factors: 1) internal IT market is continuously growing with a similar growth-rate (24%-25% a year) thus attracting more and more attention of Russian software exportes, 2) a number of issues important for the export growth have not been solved or have even become exacerbated. For example, the situation with personnel in Moscow and St. Petersburg - which combine for over 60% of total exports - has become noticeably worse over the last two years. Higher educational institutions are currently unable to provide the necessary increase in supply for the booming demand for qualified programmers, despite developing collaboration with private companies.

Source: 1, 2

Prashanth Rai