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Reports Say Sanctioned Russian Companies Lose U.S. IT

Published: May 6, 2014 (Issue # 1808)



  • Young men chatting at one of Microsoft’s offices in Moscow, which may soon halt service to sanctioned firms.
    Photo: Vedomosti

Leading U.S. IT companies Microsoft, Oracle, Hewlett-Packard and others may be cutting off services to Russian banks and companies to comply with Washington's sanctions over Russia's actions in Ukraine, spreading the same political anxiety that the banking sector has experienced in recent months into the Russian IT market.

The multinational tech companies have already joined in the government sanctions against the banks and may completely cease cooperation with them, Gazeta.ru reported, citing anonymous sources in the IT departments of two Russian banks and confirmation from Andrei Chernogorov, executive secretary of the State Duma's commission on strategic information systems.

A Microsoft spokeswoman on Monday declined to comment, while Oracle and Hewlett-Packard did not respond to requests.

A source close to Microsoft's partners told The St. Petersburg Times that the computer giant will halt its services to the 18 companies currently included on the U.S. sanctions list but will continue to work normally with all other Russian clients.

"International companies do not make decisions about whether or not to introduce sanctions and simply cannot avoid them, so they must comply with U.S. and EU legislation," the source said, speaking on condition of anonymity.

Of the four sanctioned banks who stand to lose service, Bank Rossiya, SMP Bank and Sobinbank on Monday did not respond to requests for comment. An InvestCapitalBank spokesman said that the bank "has not yet received any written notifications from IT companies."

The companies will still be able to use the software that they currently own, but "all services, and first of all consulting and technical support, will be stopped," said Maxim Andreyev, director of business applications at IT services provider CROC Inc. They will not receive updated versions of the software or corrections to any defects that may be discovered. The risks this loss could produce are low, Andreyev said, "although a lot depends on the specific software producer."

Foreign software occupies about 70 percent of the Russian market, with U.S. software dominating that share, but its penetration of the banking sector is "minimal" with the exception of a few producers, Andreyev added. The largest problem may arise with databases, as Oracle's products "are essentially the standard in the banking sector," he said.

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