Viber, World of Tanks, EPAM - Belarusian IT Companies Conquer the World
The Belarusian game World of Tanks has become one of the most profitable in the world, earning $372m in 2013. The game, with 60 million users, is only one instance that shows how Belarusian IT business is achieving considerable successes and becoming global.
Viber, the smartphone messaging and calling client, has become one of the most popular applications in the AppStore and Google Play, and EPAM Systems creates software for the largest companies in the world. These are just some of the world's leading companies with their roots in Belarus.
Belarusian highly qualified specialists with a robust technical education and favourable business conditions in the industry have made these achievements possible. Success in this field should be an important lesson for the Belarusian authorities.
Belarusian Skype`s Killer
Smartphone application Viber can become perhaps the biggest Belarusian brand on the global market. More than 200 million people use the program, with some hundred thousand people every day becoming new users of the service.
Though the founders registered a company in Cyprus, the application developers work in Israel and two Belarusian cities: Minsk and Brest, a city in the west of the country. Minsk office employs about 60 people.
Currently Viber's is mostly popular in the countries of the former USSR, Asia, Europe and the Middle East. The company has a global aspiration and often appears in the news from those regions.
This year, the company made its services in the Philippines free of charge to help victims of the typhoon to connect with one another. Also this year, Saudi authorities have demanded that they decrypt the services traffic, as they are unable to monitor it. Viber Media refused. As a result, Saudi Arabia has blocked the programme from being used within its borders.
It is noteworthy that the company`s paid services in Belarus remain much more expensive than in other countries. For example, a one minute call to the U.S. phone costs 2 cents, while for a one minute call with a Belarusian number people should pay 39 cents. However, this price does not depend on the creators of the Viber, but on the telephone operators. Beltelekam, the state monopoly in this Belarusian market segment, sets such a high price.
IT-Leader in Eastern Europe?
Viber`s case is not an exception. Some other companies with Belarusian roots have become global players.
According to the Global Outsourcing 100 ® List EPAM Systems, an American company with Belarusian roots, became a leading provider of software in Central and Eastern European region. The market capitalisation of the company at the New York Stock Exchange even reached a billion dollars at one point. Microsoft, Barclays Capital, London Stock Exchange, Aeroflot, Gazprom, The Coca-Cola Company were among the clients of the company.
Pennsylvania hosts EPAM`s headquarters. Arkadz Dobkin, Belarusian National Technical University grad, moved to the U.S. from Belarus in 1991 and was washing dishes at the time, founding EPAM Systems in 1993. Now more than 9,000 people work for the company, half of them in Belarus. Apart from Belarus and the United States, EPAM Systems has offices in 10 countries.
It seems that every computer game addict knows the game World of Tanks, a tank simulator set in the time of World War II. This game appears to be the biggest game made by Belarusian developers with over 60 million people registered in it.
Wargaming Public Co Ltd.'s official company registration is in Cyprus. In addition to offices on the island and in Belarus, the company has offices in nine countries and pursues quite an aggressive development strategy. Wargaming is a phenomenon for Belarus where all the big businesses are directly or indirectly linked to the bureaucracy – current or former officials, security officers and oligarchs controlled by Lukashenka.
The company constantly launches new online games and swallows up Western game studios. During the last two years Wargaming bought two American and one Australian firms. Moreover, Wargaming diversified its own portfolio and on 31 October acquired a controlling stake in Hellenic Bank, a large bank of Cyprus at a cost of € 50 million.
How Belarus Achieved IT Success
The poor reputation of Lukashenka`s regime casts a shadow over the whole country, including Belarusian innovators. However, Belarus has enough talented businessmen who can play the game on the global market. Success in the IT sphere has primarily to do with two factors.
At the Belarusian State University the scores of programmers’ alma mater – the Faculty of Applied Mathematics – were considerably higher than in any other natural science faculty: 321-345 (depending on speciality) out of 400 possible points. Passing scores for most other natural science majors remained well below 300.
Marvin Liao, a former commercial director for Yahoo!, said in November 2013 that "Belarus in technical talent is excellent. Perhaps one of the best in the world.”
The authorities seems reluctant to be a hindrance to this sector. Many joke that they behave this way because they do not understand this branch of business. Moreover, the Belarusian High Tech Park offers its residents a preferential tax regime and favourable legislation. The companies registered in the technology park pay a fixed income tax of 9% and receive exemptions from corporate and capital gains taxes, VAT and custom duties. Few Belarusian business people have similar conditions.
However, Viber Media, EPAM Systems or Wargaming prefer to have their registration abroad. Not only do economic conditions influence their decisions, but political risks as well. On the one hand, businessmen are afraid of possible problems that the authorities could create. On the other hand, IT companies want to avoid economic sanctions by the U.S. and the European Union.
IT's success proves that Belarusian business is alive. Highly qualified personnel and favourable conditions from the state authorities can secure the constant growth of the industry and its global success. This is a good lesson for the Belarusian authorities.