Ukrainian IT Industry: How Did it Change in 2021 and What to Expect in 2022?

Business practices 8 min read

Valery Krasovsky, CEO and co-founder of Sigma Software Group, co-founder of SID Venture Partners and Inspirium Laboratories funds, co-head of the IT Committee of the European Business Association, presents an overview of the latest trends and changes in the Ukrainian IT industry.

The pandemics not only imposed certain restrictions but also opened wide opportunities. IT specialist value is growing every day; the companies who do not attract candidates with rewards and bonuses, but who suggest unique offers in terms of professional development can win in the long run. The development of IT education becomes even more important in regard to the growing demand for engineers. I would like to highlight the following trends, which will be relevant for the Ukrainian IT industry next year as well.

Sigma Software Hosts IT Arena 2021

Digitalization boom

It may seem that we already live in a digitalized world, but in fact, it has barely begun. A huge number of medium, large and very large businesses still work as they did 10-15 years ago. Huge amounts of data, undescribed processes, unaccounted details, the human factor, lack of automation – this is still the reality for many companies. With the introduction of quarantine restrictions, moving to remote work and self-isolation, everyone who hadn’t digitalized their business and their processes – rushed to do it. The convenience of using digital tools has come to the forefront. Taking into account the huge demand for such products, those services that develop products from scratch have given way to ready ones that can be implemented quicker and rather cheaper. That is why service companies are actively expanding their portfolios by collaborating with product startups and have begun to work on product lines

Consider Sigma Software as an example. In the past few years, we have become partners of several promising Ukrainian product companies. In some of them we have invested, some have been created as part of our internal R&D and venture builder.

For example, Corezoid product by Middleware Inc. allows you to build, manage, host and launch business processes in the cloud without using any code. The platform significantly reduces the “time-to-market” support costs.

The low-code No-code platform Datuum.ai helps to accelerate and reduce the cost of data migration from old systems to new ones by 80%, when large companies go through the process of modernizing their business process automation systems.

Datriсs.ai, a Cloud low code platform, helps businesses to fasten data analitiсs using machine learning, build models using a user-friendly interface and make informed business decisions.

Configure8, a low code solution for developers and devops speсialists, allows to speed up the creation of infrastructure development and focus on creating a business solution.

Another product company worth mentioning is Finmap, a popular online service for financial management and accounting for small and medium-sized businesses. Being already popular a lot in Ukraine, it is now conquering other markets.

Partnership with such companies provides service companies with the possibility to offer customers effective ready-made solutions to solve their problems quicker. Product companies, in turn, receive expertise in integrating their solutions with end-customers’ systems and the ability to work with clients in different domains and places. Some projects, which later became independent businesses, were founded and developed within Sigma Software. Working on clients’ tasks, our specialists identified unresolved market problems and created product ideas with great potential.

The demand for digitalization will grow, as for low-code and no-code solutions. We, at Sigma Software, believe that such solutions are the future. Gartner confirms this. According to their forecasts, by 2024, 65 percent of applications will run on ready-made low-code platforms. Today we have about 20 solutions in our portfolio, with the help of which we can provide fast digitalization of any business or structure.

Creating a balanced ecosystem

In 2021 we’ve paid considerable attention to Ukrainian startups. We continue to develop our business incubator Sigma Software Labs, which provides startups with comprehensive support at every stage of their development. This includes providing office space, mentoring support, consulting, an opportunity for young businesses to use the company’s wide network, reaching out to clients, venture capital funds, and investors. Now, about 20 projects have passed through such acceleration, among which are truly innovative and significant for their industries:

BlackSnow – AR platform & game. This year, one of the largest world shopping centers became a BlackSnow client, using technology for its promotional campaign, allowing users to play games and earn points in augmented reality in the mall just using their mobile deviсes.

Clean.io, a cybersecurity product that protects over 8 million websites from malvertising. The technology for evaluating the code behavior in real-time is patented in the USA.

Lunar Light is an analytical platform for more efficient management of rolling stock on the railway.

WOD Insight is a sportech solution that allows CrossFit athletes to monitor their performance during various workouts and develop an effective training plan.

IdeaSoft, a service company with a niche competence in fintech and blockchain, which joined Sigma Software Group in January 2021. In six months, it helped to enter the international market and find a strategic investor for Global Ledger through IdeaSoft business incubator. Global Ledger allows banks and financial institutions to analyze the origins of cryptocurrencies.

Understanding how important it is to have timely expert support at the early stage of an idea for a startup became a prerequisite for SID Venture Partners fund launching. This is the first Ukrainian venture fund, where all partners are IT businesspersons who have built more than one project with expertise in various domains. Fund focus: tech startups. The goal is to raise new global unicorns.

Moreover, together with our educational platform Sigma Software University, this year Sigma Software Labs held the sixth season of the all-Ukrainian IT_Eureka startup competition, with the support of the Ministry of Education and Science of Ukraine, Ukrainian and foreign foundations.

SID Venture Partners

The labor market is more competitive than ever

Since the spring of 2020, the demand for specialists is growing. The most talented people are always striving for more: professional growth, more responsibility, and freedom in decision making. This is something that cannot be imitated and requires careful attention to each specialist. This is what we are trying to provide our people with, and in addition – unique opportunities on the market, for example, to get a share from a startup for which they are creating a product. Or, with the support of the company, create your own startup, master a completely new direction or technology.

However, it seems that every year looking for people is getting harder. Till now, our company has grown organically for 20 years. In 2021, for the first time, we entered into an M&A deal with a young and dynamically developing company IdeaSoft, which has deep expertise in FinTech, Blockchain, and Telecom domains. After the agreement was signed, the company saved its identity, leadership team, culture, and atmosphere, at the same time got the opportunity to use the processes and approaches of a large international company, learn from experienced managers, and receive support in various areas from marketing up to sales. We plan to repeat this successful case in the future.

Development of education

This is a general Ukrainian trend of the last decade, but in 2021, it took on special significance, and it will only grow. In conditions of a huge shortage of staff, business, universities, private educational platforms, and the state – all of them need to cooperate with each other. In 2021, there were many great initiatives from IT companies, more and more universities are involved in cooperation and expanding it with companies at the highest level. Universities are becoming more efficient applying business approaches in the educational institutions working processes, private IT schools and educational platforms are progressing too.

In 2021, Sigma Software has invested $500,000 in the development of education. Besides classroom equipment, technical support, and scholarships, the company is actively involved in the development of educational programs. Many practitioners teach specific disciplines.

I think that in 2022, almost every large university will cooperate with IT companies. New universities will appear (or have already appeared) and non-state IT education will continue to develop. It is quite possible that the next step will be the appearance of live university R&D centers, accelerators of venture capital funds, following the example of international experience. Universities will be able to create revolutionary startups within their framework and become their co-investors.

Cooperation at the state level

The abbreviation ESC is popular all over the world: Environmental, Social and Corporate Governance. It would be fair to say that it became a landmark for Ukrainian IT in 2021. This applies both to actions within Ukraine and in the international arena. Sigma Software took aсtive part in development of a new taxation system for IT industry, сreating opportunities for it`s further suссessfull growth.

We should also point out the joint business and the state work in terms of public relations for the IT industry and creating a favorable image of Ukraine as a large IT center. Several international forums took plaсe, сo-organized by Sigma Software and supported by the Ministry of Digital Transformation of Ukraine: the Ukrainian Israeli Innovation Summit, the Swedish-Ukrainian Business Forum, the UK-Ukraine FinTech Summit, Ukraine`s booth at WebSummit. Such events allow Ukraine to adopt the successful experience of Western colleagues, strengthen cooperation with these countries, and form a positive image of the country.

This work will definitely continue next year. We can say that Ukrainian IT is already a rather mature industry, which, yet, has a lot to master and implement… Together we are approaching the moment when Ukraine from “a very promising IT сountry” should become “very successful”, and current trends are clear proof of that.

Ukrainian Booth at WebSummit 2021

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