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SAP pauses Russian Sales

SAP has responded to the Putin regime’s occupation of Ukraine with a variety of measures demonstrating practical support and solidarity with the Ukrainian people. This includes stopping all sales of SAP services and technology to Russia.

The actions follow a direct request for support on the 2nd of March from Ukraine’s vice-prime minister and minister for digital transformation, Mykhhailo Fedorov.

CEO of SAP Christian Klein gave the following statement:

“Like the rest of the world, we are watching the war in Ukraine with horror and condemn the invasion in the strongest possible terms. An act as inhumane and unjustified as this is an attack on democracy and humanity. Its consequences affect us all… Economic sanctions against Russia are an important mechanism in the efforts to restore peace… We are in constant exchange with governments around the world, have every confidence in their guidance, and fully support the actions taken so far. We are stopping business in Russia aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia.”

The Russian IT industry

The IT industry in Russia has been growing at a much faster pace than the Russian economy as a whole, which is largely dependant on oil and gas, but compared with other economies it is comparatively modest.

In Russia, the volume of investments of private companies in digitalisation is only 2.2% of GDP, while in the USA it reaches 5%, in Western Europe – 3.9%. In addition 85% of all IT costs are generated by a small group of very large companies, according to a recent academic paper on the Russian IT market. [Russia as a Part of the Global IT Market: is There a Chance for a Breakthrough? Bryansk State Technical University, Russia, 2021]

The paper goes on to state that while the Russian domestic IT sector is subject to national programs for substituting foreign IT products and services for domestic alternatives, this has yet to gain momentum so Russian businesses are still largely dependent on overseas providers of IT services.

The Russian SAP Market

A study by Reuters suggests that up until now SAP supplied IT products and services to 53 of the largest Russian companies, leading to annual revenue of “€468m” .

Consequently we can expect the pause in sales of products and services by SAP, and also Oracle, to have a significant impact on the Russian economy.

Other Practical Measures By SAP

SAP has also donated €1 million humanitarian and disaster relief support to the people of Ukraine.

Klein also said that SAP have offered to convert office spaces at locations across Europe into warehousing and accommodation for refugees, which will no doubt include SAP employees: “The safety and protection of our colleagues in the region is of the utmost importance. For those colleagues who chose to leave Ukraine, we are providing financial and logistical support to try to make this incredibly difficult step as easy as possible.”

IgniteSAP’s Offer to Ukrainian SAP Professionals

IgniteSAP applauds this decisive and comprehensive action to support the people of Ukraine and we urge our other partners in the IT sector to follow suit. We would like to repeat our previous offer of support to IT consultants from Ukraine with SAP qualifications:

Our team will do our best to place these individuals in a secure and lucrative working environment so they can continue their careers, help their relatives still in Ukraine, and be in a position to help other parts of the Ukrainian economy grow and thrive in the future.

Please get in touch with our team.