Russia's Digital Development Ministry wants to prohibit state-owned companies from creating analogues of existing software for their use

MOSCOW. May 28 (Interfax) - Russia's Ministry of Digital Development is proposing to prohibit the IT subsidiaries of state-owned companies from developing analogues of basic software already on the Russian market for internal use; the new regulations are planned to be prepared by the end of the year, Minister Maksut Shadayev said.

Currently, state-owned companies can allocate no more than 30% of the total cost of digital transformation to insource development, he said. However, if state-owned companies sell their IT solutions to external customers, "certain relaxations" of the allocation are possible.

"But if, after all, the company develops solutions that are only for internal use and does not plan to commercialize them, then here we believe and will propose to introduce a ban on financing the development of basic software, analogues of which are already on the market," Shadayev said during the TAdviser SummIT 2024.

"In principle, I am in favor of a ban on the development of products that have analogues in the commercial IT market, with one exception: if a company, and we know state-owned companies like this, decides that it is purposefully developing an IT business, and this IT business is focused on external revenue, and not on internal orders. We will do this very carefully so as not to ruin anything," the minister added.

Since the Russian IT market is not very large, it is important to concentrate the "not so great" financial resources on the development of full-fledged competitive market developers who can provide their products and services to the entire market, he said.

Shadayev said that the ministry's task is to help those specialized IT subsidiaries of state-owned companies that receive over 50% of their revenue from the external market, and not from domestic orders.

Shadayev said that the Ministry of Digital Development is awaiting instructions from the Russian government following the CIPR conference to work out the possibility and conditions for applying this sort of restriction, after which it will formulate appropriate proposals.

"I think that by the end of the year, we will definitely decide on the rules," Shadayev said.