- The conflict between Russia and Ukraine intensifies the global IT and software professional shortage, which is problematic for enterprises looking to accelerate app modernization efforts.
- Vendor recommendations for addressing the shortage include large-scale partnerships and consolidated off-the-shelf solutions requiring minimal expertise.
The Ukraine crisis has made a serious global IT professional shortage even more severe. For an industry already sorely lacking in software developers, engineers, and SREs, the war between Ukraine and Russia has magnified the situation.
Hundreds of thousands of technology professionals based in Ukraine and Russia (reportedly at well over 200,000 in Ukraine alone) will cause a ripple effect and exacerbate the shortage of consultants and integrators available to provide crucial enterprise technology services. Furthermore, the large numbers of technology professionals based in Ukraine and Russia are facing the daunting loss of their livelihoods, making the situation even more desperate.
Ukraine represents an important destination for IT outsourcing, tapping the country’s tech talent pool, which is primarily software developers. One in five Fortune 500 companies reportedly uses Ukrainian IT services. These companies (including Microsoft, Google, Oracle, and Salesforce/Slack) are now under pressure to quickly establish contingency plans, as well as reevaluating overall global outsourcing structures in anticipation of ongoing geopolitical activities.
The timing is particularly damaging post-pandemic, when companies are struggling to accelerate their digital transformations to vastly improve business efficiencies and customer services in a tumultuous global economy. The loss of IT personnel has given pause to numerous vendors and systems integrators counting on those engineers and developers to support customers’ digitization and app modernization projects. Vendors are scrambling to devise new outsourcing strategies.
Vendor recommendations for addressing outsourcing shortages:
- US tech companies should look for new opportunities of collaboration with various partners and even rivals during this period of turmoil (similar to COVID-19 inspired global projects), demonstrating the industry’s ability to be agile and innovative under any circumstances.
- Companies should focus on providing hard-hit Ukraine businesses with new off-the-shelf, consolidated solutions – solutions which can also be applied to broader customers’ digitization needs and likely include intelligent automation, RPA, and low-code capabilities.
- Countries neighboring Ukraine such as Poland and Georgia, which have been experiencing their own technology growth spurt, should quickly create hiring campaigns to provide Ukraine’s IT professionals and companies with a safe haven. Such programs would draw from Ukraine’s impressive talent pool to better serve global partners and clients.
GlobalData has written multiple reports in recent weeks on how the crisis is affecting the tech industry. Caught in the crossfire, the Russian invasion of Ukraine has prompted numerous cloud, security, platforms, hardware, and network providers to take a stand regarding the conflict. For more, please see GlobalData’s latest report, “War on Ukraine Tech Companies Rally Unprecedented Support for the Embattled Country” (March 30, 2022).
The industry is largely in support of the US Department of Commerce’s massive export controls. Tech giants including Microsoft, AWS, Google, Apple, Cisco, IBM, and others have gone even further. Swift actions include halting technology services to Russia, backing up or relocating data centers within Ukraine, offering free services/technology to Ukrainians including cybersecurity threat monitoring, providing humanitarian support to refugees in the form of IT professional training, and readjusting Ukraine IT consulting/integration outsourcing strategies.
The significant loss of IT outsourcing services in the Russia and Ukraine regions resulting from the conflict has given pause to numerous companies counting on those outsourcing services for digital transformations. Feeling the effects of a war on the global market and devastating reduction in tech professionals, software vendors are bracing for the geopolitical activities to have an effect on next year’s revenues.