Executive Summary (This is a document excerpt)

Western firms have for some years turned to software development specialists in Russia for offshore application development and related services. Russia represents a far smaller reservoir of development expertise than exists in India, for example. But as costs compare well with those of other offshore venues and technical expertise is strong, Western buyers like Alcatel and Computer Sciences Corporation have been happy to turn to this source. Representative software developers in Russia like TelmaSoft, LUXOFT, and EPAM Systems have achieved substantial growth in size and turnover as a result. Forrester believes that such firms offer a viable alternative to offshore providers elsewhere and to local services firms in advanced economies. But as these developers remain small and less sophisticated than India's top providers, we advise that only Western buyers who have strong project management and vendor management capabilities will be best placed to use Russian firms at this time. To help with vendor selection, we define a set of criteria — based around the current deliverables, future plans and market strength of candidate suppliers — that will assist firms in picking the right partner.

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