The Art of Russian Programming: Open System interviews Nick Puntikov

Interview by Natalia Dubova

Nick Puntikov: “The Russian software development industry has reached a certain level of maturity, and Russia has been able to occupy a meaningful position in the international division of labor”

Nick Puntikov is one of the veterans of the Russian software development industry. In 1991 he co-founded StarSoft, one of the first local companies to develop custom software and, in 2007, through a merger between StarSoft and Exigen Services, became President of Operations of the combined companies. Currently Puntikov is Group President at First Line Software, chairman of the SECR conference and Editor-in-chief for the Software Russia web portal.

We spoke with Mr. Puntikov on the Russian software industry’s achievements and prospects, the fate of local start-ups and the next future SECR conference.

You have been involved in the Russian software development industry for many years. How would you describe its current state?

The Russian software development industry has reached a certain level of maturity. One of the particularities of the software industry is that it is inherently global. Software development is one of the few areas in which Russia has been able to occupy a meaningful position in the international division of labor.

What is this position?

In some areas it is already difficult for us to compete – in the development of operating systems, for example. But there are a number of companies that manufacture products that have a great reputation on the global market. My only concern is that the number is growing very slowly. From year to year we are still proud of the same names – Kaspersky Lab, ABBYY, etc. These companies started about 20 years ago and have been successful since the 90’s. It is not that there are no new names, but I would like there to be more.

Another major segment of the software market is service. A dozen Russian companies are at the top of international rankings in this area. However, we must understand how “Russian” they really are. Luxoft has Russian roots but its development arm is located in the Ukraine and the sales offices in America, etc. EPAM Russia has located its main development center in Belarus, and is headquartered in America. And our company First Line Software is based in Russia, but is represented and sells services for the development of custom software in the United States, Sweden, Germany, and Singapore. It fully shows the global nature of the market.

The third segment comprises the research and development centers of multinational corporations. The fact that almost all the leading international companies develop software in Russia only proves the maturity and authority of the Russian software industry.

What is needed to bring about the emergence of new software companies? Does an ecosystem for innovative technological entrepreneurship exist in Russia?

It is wrong to try to apply the concept of an innovation ecosystem to one particular industry. Innovation can only arise in the economic system as a whole provided that a number of properties and characteristics are present in the legal, economic, political and social spheres. The Russian economy does not yet have such properties, unfortunately, and remains largely post-industrial and heavily dependent on natural resources and a controlling, corrupt bureaucracy. The question, then, is how flexible is this or that industry, how able are they to realize their innovative potential in this environment?

In software development it is so easy to get up and walk out of an unfavorable ecosystem that many of those who have a promising idea and are ready to make a start of it prefer not to suffer the problems inherent in Russian life. They just go to Silicon Valley, or at least to Finland, where they are received with open arms. Our developers generate a lot of great ideas but the results are, unfortunately, not Russian.

In Russia, even basic corporate law does not comply with international standards. There are problems with the protection of intellectual property. The tax legislation does not provide the measures needed to spur innovation. Social consciousness is still wary of individual success. Can it be said that the Russian system is favorable to an innovation economy? I think not. There is a spirit of enterprise, wonderful young people and some great ideas. But they need to rush into the breach daily to achieve anything. Not everyone is willing to make such sacrifices.

As a result, the share of innovative products as part of Russia’s GDP is much lower than in more developed innovation ecosystems. The state does take the individual steps – building industrial parks, investing in innovation enclaves like Skolkovo. But while this is a great project, it is generally ineffective. In order to display an innovative economy, we need to reform the existing economic system. So far we have not seen many such reformers.

In the last two years the SECR conference has changed for the better under your direction. How do you plan to develop the conference in future?

I took up its organization in 2011, when I was between projects. The reputation of the conference had deteriorated to the point that most of our initial efforts were to repair the wounds to its reputation from years past. In 2011 we did not change anything in the conference format, but rather tried to improve what was already in place. In 2012, it was hard because I was already working with First Line Software. But on the other hand, we had already established a team that knew what to do and how to do it. We altered the process used for the selection of reports and expanded our activities.

In the future it may be possible to move the conference from Moscow to another city, such as Nizhny Novgorod or St. Petersburg. There are ideas about how to create a different program. However, the essence of the conference will remain unchanged. SECR is a place where professionals from the world of software engineering can gather and solve the problems that they face. This is its uniqueness.

Russia is justifiably proud of its success in the international programming competitions. But do you think that our universities, which educate scores of elite professionals, have a system in place to train the masses of personnel necessary to meet the demand of the IT industry?

Having programming champions helps the industry. And last year winners from Russia and China dominated at these international events. America’s lead is long gone, but that does not prevent it from being the world leader on the IT market. For those countries that have yet to prove their right to a leadership role, such recognition helps solve an image problem.

A better question is whether or not to call such champions elite professionals. This is programming as a sport, but not a profession. In Russia, there are universities and departments which train professionals with a capital “P.” The problem is that there are very few such places. The market is desperately short of qualified personnel.

Why can’t we build a training system that will meet the needs of the market? I do not have answer to this question. Now we are even seeing a reduction in the number of scholarships available for the IT profession because the field is becoming less popular among graduates. Someone is needed to promote software engineering as a profession in the schools. There are some very bad things happening with specialized secondary education. We may need to change the model used for training. It is not necessary to get a master’s degree, or even bachelor’s degree, to become a good programmer. We need to develop a lower qualification. But for this to happen we need to attract competent teachers to the technical colleges. Still that won’t solve the problem of decent salaries for university professors, not to mention those teaching in vocational colleges. So we return to the question of an innovative economy. In a country where the teaching profession is unpopular, and the professors receive starvation wages, it is difficult to provide human capital of high enough quality.

But I do not want to end the conversation on a pessimistic note. The potential of the Russian software industry is huge, and the process of realizing this potential will, sooner or later, be supported by the necessary reforms at the national level.