Most technology providers shut down in Russia in March, but that doesn’t mean less work for executives with geographical responsibility for Russia. Sanctions have created new challenges, even if business volumes have been reduced or reduced to zero.

These are the main challenges for technology providers operating in Russia (or operating there until recently).

ICT hardware vendors are preparing to increase supplies to Russia through unauthorized channels

The sudden decision of so many suppliers to suspend supplies to Russia has created an immediate demand for these products, wherever they can be obtained. There was an effective message from the Russian prime minister approval of imports through unauthorized channels.

These alternative channels can range from small retailers reselling iPhones brought to Russia in their personal luggage to containers of office products or data centers shipped from their original destinations in Asia or the Middle East. Renovated products were also in high demand in March by Russian-based companies desperate to fill holes in their equipment stocks.

This situation creates broader company risks that go beyond the challenges of channel management. If a suitcase full of microchips and disk drives ends up in Russia, this could put a European or American manufacturer in technical violation of the sanctions. But can this really be prevented?

Software vendors are preparing to increase software piracy in Russia

Russia-based organizations that have standardized Western software products are now facing a race against time to keep their infrastructure and applications running. Depending on their sanction status or the policies of the Western vendors they buy from, CIOs may find that their licenses or subscriptions have been suspended, that they no longer have access to support, or that they have lost the ability to purchase new products or versions.

In almost all cases, functionality and maintenance are only available until the expiration of current contracts. In combination, it is now unlikely that Russian courts will support the enforcement of intellectual property rights by Western software vendors. Consumers will inevitably take matters into their own hands to keep their systems working in any way.

Software vendors are struggling with a confusing number of client scenarios

Every software vendor that was present in Russia in early 2022 is now dealing with the complexity of how much business needs to be done with customers in Russia. Some suppliers have chosen to leave the Russian market altogether; others have decided to stop new sales but support their existing customers.

In all cases, however, the process of eliminating commitments in Russia has created countless scenarios for different clients. If a customer in Russia is directly subject to economic sanctions, then the case is clear – subscriptions are canceled and no other services can be purchased.

Some clients are not directly sanctioned, but debt services cannot be provided to them. In these cases, their working conditions need to be adjusted. Most providers seem to abide by existing contracts and subscriptions, but do not undertake to renew them. But even in this case, “Leaving” the Russian market may still take yearsas explained by SAP.

Many suppliers have decided to stop new sales, but in most cases have been forced to limit this to new customers, as existing customers still have to buy upgrades. When software is delivered as a service, it creates another dimension of complexity.

When the customer and his users are based in Russia, the service may be terminated. In situations where customers are charged outside of Russia and consumers are in the country, for now it seems that these services are still offered.

What to do with Russian-based staff?

The suspension of Russian operations created an immediate personnel dilemma. Western ICT providers employ thousands of employees in Russia. Not everyone is ready to send redundancies – and by acting too hastily, they may also run counter to local authorities.

Can Russia-oriented staff be repositioned to support business outside of Russia? Can staff be relocated outside Russia? In some cases, employers find that Russian staff have moved out of Russia of their own free will. In this case, it may be necessary to find ways to keep these people employed and paid in a third country.

When the business is local, the option may be to try to sell local operations to a Russian partner. Another option is yes sold the operation to the local management team.

New challenges in team dynamics

Beyond Russia, everyone in the Eastern European region is stressed. Teams in Ukraine, Russia, Poland and Romania have been engulfed in personal and humanitarian crises. This requires sensitivity in the management of these teams and proactive efforts to support their mental health and well-being.

An additional challenge is that co-operation between Russian and other European officials could become strained. Managers need to be aware that the propaganda war that is currently being waged both in Russia and abroad is worsening human interactions everywhere.

Separating business and politics will be increasingly difficult, but increasingly important, if we want teams to remain functional.

For more information, please contact Robert Farish or Angel Gedesor head to and drop your details in the form at the top right.

5 Challenges for Tech Vendors’ Operations in Russia

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