The cloud service segment is growing in Russia, but some companies haven't yet realized its potential value for their business, while others might be put off by security issues.

According to IDC consulting group, in 2019, the segment grew by about a quarter year-on-year, as companies used cloud services to save on deploying their own IT infrastructures.

Still, Russia's penetration of this type of services is very low, with cloud services responsible only for 4% of the total IT infrastructure, compared with a global average of roughly 45%.

Similarly, Russia is lagging behind in the proportion of companies using cloud services. While globally, roughly one half of all companies use cloud-based solutions, for Russia, the figure is just under 20%, according to data from Softline.

Growth potential

The local cloud service segment is developing slower than most advanced markets, but the potential for growth is substantial, Softline's head of cloud solutions department Sergei Samoukin was quoted as saying by Computerworld Russia.

By 2022, Russia's cloud service could grow by 250%, Alexander Sorokoumov, general director of SberCloud, Sberbank's subsidiary in charge of developing cloud technologies, was quoted as saying by TASS news agency.

He explained Russia's lagging behind in developing cloud services due to a late start and competition from system integration companies, which promote traditional IT infrastructure services as opposed to cloud technologies.

"First of all, we were late to the game," he told TASS. "Cloud technologies were created in the United States, and three largest global providers are US companies. In Russia, cloud technologies arrived later, and ended up in a highly competitive market dominated by IT integrators."

According to Sorokoumov, the main advantage of using the cloud is the high speed of rolling out new ideas and solutions.

"For any contemporary enterprise operating in a highly competitive market, [speed] is a vital issue," he explained. "Another advantage of cloud technologies is cost effectiveness. Companies that turn to cloud providers don't have to purchase and maintain their own IT equipment."

Big data

A major area for cloud-based services is storage and analysis of big data. According to Sergei Zolotatev, general director of Arenadata, three scenarios for cloud-based operation are actively used in Russia.

"First, many companies are willing to move their testing and development environments to the cloud, as well as projects involving team collaboration," he was quoted as saying by Computerworld Russia.

"Second, the largest industrial companies that collect non-private data, such as machine information, assign its analysis to data science groups, using the cloud," he went on to say. "Third, various state and national programmes are being launched. Currently, the issue of data security is complex, and meeting all regulatory requirements is difficult. Therefore, companies join efforts, and a cloud provider can offer all tools for data storage and protection to an entire consortium."

One example of such a platform is Avtodata focused on vehicle information and run by Arenadata.

Major players in the game

Although Russia's cloud service segment is dominated by specialized independent players, major tech companies are also looking into it.

Online giant Yandex runs a division for cloud services, Yandex.Cloud. In late 2019, it announced a partnership with South Korea's Naver Business Platform (NBP) to jointly develop cloud solutions in the two countries.

Another Russian tech major, Mail.Ru Group, signed an agreement with local company Arenadata to develop its cloud service division, Mail Cloud Solutions.

Security issues

Meanwhile, the downside of using cloud services is potential security risks.

In 2019, the number of data leakages due to cloud storage increased by 2,000%, Natalya Kasperskaya, president of computer security firm InfoWatch and who described her business in an exclusive podcast interview with bne IntelliNews, was quoted as saying by TASS. She added, though, that the blame should be mostly put on companies themselves as they failed to properly protect their data, rather than cloud storage as a technology.

Cybersecurity firm DeviceLock recently discovered that about 60% of Russian cloud storage servers could be easily accessed. The firm explained that companies have to be much more careful with their data stored and processed in the cloud.

 

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This article is part of bne IntelliNews coverage of technology, blockchain, fintech, cryptocurrencies and the new economy. Sign up for the free monthly newsletter bneTech here, or read more tech stories on the website here.

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