During 2022, many well-known brands closed their stores and representative offices in our country: someone claims to have left for good, while someone, on the contrary, leaves room for a quick revival. There are also those who continue to work not directly, but through intermediaries: they carried out restructuring, changed owners, divided their Western and Russian assets into allegedly unrelated parts.
Perhaps the most notorious was the rebranding of the McDonald’s fast food chain into Vkusno – i Tochka, as well as the Russian division of Coca-Cola into Multon Partners. Purely nominally, now these are other companies, but in reality they are the same technologies, factories, products and non-public documents, which spell out the possibility of a quick buyout of businesses by their original owners. Many foreign brands in the field of catering, clothing, media, etc. found themselves in a similar situation.
A similar strategy is followed even by major players in such serious sectors of the economy as oil and gas. For example, the American oilfield services company Schlumberger announced the renaming to SLB. According to Reuters, in the third quarter of 2022, she even managed to increase revenue in Russia by 25%, she continues to recruit new staff and expand. At the same time, from a legal point of view, SLB does not in any way violate the sanctions imposed against Russia by the US and EU governments.
Of course, not all companies do this. The above are rather relatively positive examples, but there are others. In addition, it is worth considering the fact that after changing the name, the services provided by companies, services and products still undergo certain changes.
The situation in the IT industry, on the one hand, is similar to other segments. On the other hand, replacing one burger with another, say, in a city cafe, is likely to be relatively painless, but migrating from one software product to another is sometimes much more difficult. And with renaming in IT, not everything is so simple: at least no Doors OS has appeared instead of Windows OS, and you don’t have to wait for this.
However, the vast majority of players still leave loopholes for a future return to Russia, for example, they transfer control over operational activities in the region to other legal entities that are nominally unrelated to the parent company.
Microsoft
It is worth starting the story with the American corporation Microsoft, which suspended the sale of its products and the provision of services to Russian users last spring. Despite the fact that a significant number of Russians still tend to use pirated versions of Windows and related office software, the inability to officially acquire legal licenses is a serious blow to the law-abiding part of the population and businesses. At some point, Microsoft even blocked the ability to download ISO images of any Windows OS from its official website if the request was made from a Russian IP address. Yes, this restriction could be bypassed using a proxy or VPN, but in fact it interfered even with those who legally bought the company’s products long before 2022. However, in December last year, Microsoft silently lifted restrictions on working with the official website for Russians: no official statements were made about this. In addition, in the fourth quarter of last year, the vendor’s brand began to return to Russian stores: in particular, software appeared in the assortment of AllSoft and Softline, which confirmed the legality of new licenses. Nevertheless, certain restrictions are still imposed on these products: for example, they can be activated only in Russia, and even then not in all regions. However, this practice has long been familiar to many Russians. which confirmed the legality of the new licenses. Nevertheless, certain restrictions are still imposed on these products: for example, they can be activated only in Russia, and even then not in all regions. However, this practice has long been familiar to many Russians. which confirmed the legality of the new licenses. Nevertheless, certain restrictions are still imposed on these products: for example, they can be activated only in Russia, and even then not in all regions. However, this practice has long been familiar to many Russians.
Panasonic and Eplaza
The Japanese company Panasonic, having announced at the beginning of March 2022 that it was impossible to continue trading operations in the Russian Federation due to economic and logistical problems, in early September resumed sales through its official Eplaza online store, all products of which are covered by the original manufacturer’s warranty – at least At least, that’s exactly what it says today on the store’s website. This information was also confirmed on the Panasonic page on the VKontakte social network, but now this post has been deleted, which hints at the ambiguity of the situation.
Cisco and IBS
One of the largest suppliers of network equipment to Russia, the American company Cisco, is also looking for ways to return to the Russian market. Let me remind you that in addition to the ban on the supply of equipment, the company limited access to the Webex video conferencing service and closed its educational projects for Russians. There are rumors that Cisco may return to our market through an intermediary, for example, its partner, the Russian company IBS (it was to it that the Russian assets of the vendor were sold), which in this case can act as a distributor of Cisco equipment.
It is also worth recalling here that back in April 2022, the US Treasury excluded network and telecommunications equipment from the list of sanctions against the Russian Federation that American companies must comply with, so there are no critical obstacles for Cisco in this case. Of course, there may be problems with the warranty service of the equipment being sold and regular software updates, without which the product being sold loses a lot in price, but if desired, these problems can also be solved.
Apple, Samsung, Xiaomi, Huawei
Looks like the apple trees are going the same way. Currently, when trying to access the Russian-language version of the official online store, a stub is issued: “The Apple Store is currently closed.” However, the Apple Authorized Reseller Locator shows the addresses of resellers where, apparently, as before, you can purchase its products. The Russian version of the Apple Store is not updated: the iPhone 13 and iPhone 13 Pro are displayed in the new ones, while in the fall of 2022 the next generation models were already presented.
South Korean Samsung also planned to resume deliveries of its electronics to Russia by the end of 2022, but so far, apparently, this has not happened. Nevertheless, the Samsung Pay service continues to work with Russian Mir cards, and information about new products appears in the Russian version of the official online store (though without the ability to place an order).
The Chinese Huawei, which has been tossing between two fires for a long time, still has not officially suspended its activities in Russia and continues to work, albeit in a reduced mode. According to Izvestia, its colleagues Xiaomi and Honor are also gradually restoring the work of their Russian offices.
Abbyy and Content AI
Immediately after Abbyy left Russia, in April 2022, the Content AI company (Content II LLC) was created, which is now responsible for all current and new clients. Accordingly, all obligations to them, once accepted by it, are now fulfilled by Content AI.
Among other things, the company plans to develop its own products related to intelligent information processing. In particular, a platform has already been created for recognizing, extracting and classifying data from ContentCapture documents (direct replacement for Abbyy FlexiCapture). A solution is also in development to replace Abbyy FineReader PDF. The same programmers who worked in Abbyy take part in the work on the new software. An interesting point: since July 2022, the Russian company has become owned by a Turkish legal entity, in which, according to unverified information, more than 50% is owned by Russian citizens, former Abbyy employees in Russia.
It is also worth recalling that initially Abbyy was a unique Russian company that developed applied linguistic software and optical document recognition technologies. However, after leaving Russia in 2022, it began to position itself as an international company, and its current headquarters is located in the United States. Moreover, during 2021-2022. part of Abbyy’s software was voluntarily excluded from the register of Russian software: Abbyy FineReader, Abbyy FlexiCapture, Abbyy Business Card Reader and Abbyy Screenshot Reader. At the same time, Abbyy Intelligent Search, Abbyy Lingvo and Abbyy Smart Classifier remained on the list – the rights to them belong to the Russian Content AI.
Nevertheless, companies that need a Russian replacement for Abbyy products that have changed their registration will have to wait for new Content AI developments or choose from existing ones. For example, according to information from the catalog of the Russian software ARPP “Domestic Soft”, the Abbyy FlexiCapture program can be replaced by Beorg Smart Vision, Directum Ario One, Smart Document Engine, Smart ID Engine, SOICA and ELAR Context.
Wargaming and Lesta Games
On March 31, Wargaming transferred its business in Russia and Belarus to the full management of the Russian company Lesta Games, together with which the World of Warships game was developed. In addition, Wargaming decided to close its development studio in Minsk, and a little later, in April, announced that it no longer has any ties with Lesta Games, which will be fully responsible for the local versions of the once shared projects.
On September 20, gamers had the opportunity to choose the region for the server on which they will play next. Wargaming continues to be responsible for the game servers in the EU, and Lesta Games now operates the processes in RU. According to Wargaming, most users have long made their choice, in connection with which the start date for the final part of the separation of the two companies was agreed.
From February 1, 2023, the accounts of gamers who live in Russia and Belarus and have not made their choice before will be transferred to the RU region, while the rest will be transferred to the EU region. In turn, the local versions of World of Tanks, World of Warships and World of Tanks Blitz received new names – World of Tanks, World of Ships and Tanks Blitz. As Lesta Games reported at the end of October 2022, the departure of Wargaming from Russia and Belarus did not affect the active audience of projects, which is about 1.5 million players per day, and the total number of unique accounts is about 40 million.
It is worth noting that when choosing an RU-region, nothing changes from the player’s point of view, except for the company that will continue to manage the game. When moving to the EU region, the list of changes is longer, it can be found on the official Wargaming website. For example, internal game items may be partially or completely changed when moving to the EU. For gamers from the Russian Federation or the Republic of Belarus, after the transfer to the EU region, payment in the game store will not be available. The exception is cases of changing the country of the account if there are grounds for this. The company does not specify whether it will not be possible to pay only with Russian cards or for accounts from Russia that have chosen the EU sector, in principle, the ability to pay by any means (even using bank cards from other countries) will be blocked.
Interestingly, Wargaming promises to maintain a pricing approach similar to that of the CIS. Similar payment problems await players in other countries, not Russia or Belarus, who wish to switch to Russian servers. Despite the importance of the financial component, one of the main problems of the division of companies will be the impossibility of playing together for participants who have chosen different zones.
Softline computers and Inferit
In September last year, the Russian manufacturer of computer equipment and servers Softline computers rebranded and renamed. Now the company and brand is called INFERIT. All products, as before, will be assembled in the city of Fryazino, Moscow Region. Representatives of the company claim that the name change is connected with a rethinking of the brand’s positioning in the Russian market, and they promise that this will not affect the quality of services, products and their cost.
However, one should not forget that these changes took place shortly after Softline’s decision to split the core business into Russian (Softline Russia) and international (Softline Global) parts. Softline Global office will be located in London, and Softline Russia – in Moscow. The reasons for the separation lie in a sharp increase in differences between the Russian and global IT market.
1C Entertainment and Fulqrum Games
At the end of February last year, the Chinese corporation Tencent bought the gaming direction from the Russian company 1C – the Warsaw division of 1C Entertainment with all subsidiaries and distribution companies: 1C Publishing, QLOC, Cenega and Muve. Only 1C Game Studios remained in the management of the Russian company, which is known for the development and release of the Caliber and IL-2: Sturmovik games. The further fate of this studio is still unknown, but 1C Entertainment has already changed its name to Fulqrum Games – this was the condition of the deal, the agreement in principle on which was reached back in November 2021.
The former 1C Entertainment is famous for over a hundred once popular games, including ‘King’s Bounty’ and ‘Space Rangers’. In turn, the QLOC studio was responsible for porting (adaptation) of some modern games from game consoles to PC. In particular, we are talking about ‘Resident Evil 6’, ‘Mortal Kombat 11’, ‘Dark Souls: Remastered’ and ‘Resident Evil 4:Ultimate HD Edition’.
Oracle Consulting and Data Prime
The producer of a DBMS and analytical software of Oracle suspended in March, 2022 sales and services in support of earlier purchased products. A little later, the company announced plans to close its representative office in the Russian Federation, in connection with which some of the employees moved to other companies, including the Russian Postgres Professional.
Nevertheless, the Russian division of Oracle Consulting retained the team and continued to work as a new legal entity – at the end of September last year, the Data Prime company (OOO Dataprime) appeared, it is under its brand that the entire range of consulting and technical support services for projects based on Oracle technology stack.
By the way, the company’s official website states the following: “In case of need to solve design or functional problems, we have the ability to access global knowledge bases such as MetaLink, and also remain members of the international Oracle family.”
Nginx and Angie
The American company F5, which absorbed the Russian developer Nginx in 2019, also left Russia in 2022. However, some of its employees who took part in the work on the popular Nginx web server returned to Russia and launched the Angie project. It will be a fork (offshoot) of Nginx, that is, a full-fledged development that lives its own life: investments in it have already amounted to about $1 million.
In Russia, the Nginx web server occupies 60% of the market, so the appearance of Angie is just in time. By the way, the new company also plans to be responsible for technical support for Nginx users in Russia.
Accenture and Axenix
Axenix describes itself as a full-fledged successor of Accenture in Russia: it managed to retain approximately 2 thousand employees from the former team and the original organizational structure with offices around the country. The company, as before, offers services for the development of IT strategies, expert analysis, implementation of platform solutions, software development, outsourcing of various IT tasks, and much more.
Certainly, some changes are taking place. For example, last fall, it was reported that 50 employees of the company had been retrained from SAP to 1C. One of the current activities of Axenix is the selection of alternative solutions within the framework of import substitution.
Atos, Acronis, ESET, Schneider Electric, etc.
Similar reshuffles have also taken place at Atos, Acronis, ESET, Schneider Electric, and many other companies. In particular, the French Atos left the Russian Federation, but AUXO appeared, headed by a former top manager of the Russian division. To some extent, AUXO will provide the same services as Atos.
The successor to the Swiss-Singapore Acronis can be considered the Russian Cyberprotect (formerly Acronis Infozashchita, which once began developing its own solutions based on the licensed Acronis program code).
Behind the new Russian company PRO32 and its anti-virus product based on the Indian solution from the K7 Computing line is the team of the former official exclusive distributor of the Slovak ESET solutions in Russia. By the way, IT Expert talked about this case in more detail .
In addition, Systeme Electric appeared on the Russian market, formed as a result of the sale of Schneider Electric’s business in the Russian Federation and Belarus to local management. The French power engineering company officially left Russia, getting rid of the corresponding legal entity.
Each of these cases has its own nuances that cannot be assessed within the framework of one material. However, the general leitmotif of what is happening, I think, is clear.
Eventually
First, not only foreign companies operating in Russia suffer, but also Russian players who have managed to achieve recognition in the international market. Therefore, the strategy of rebranding, renaming, separating part of the business into independent companies, etc. is used by both.
Secondly, the number of companies that have actually left the Russian market is not as great as it might seem at first glance. This is evidenced, in particular, by a study of the Swiss from the IMD business school and the University of St. Gallen, who found that as of the end of November 2022, only 8.5% of Western companies left the Russian Federation. In absolute terms, 120 companies from the EU and G7 countries left our country, whose income corresponds to approximately 10.4% of all companies from these jurisdictions operating in the country at the beginning of last year. Yes, IT giants such as IBM, HPE, HP Inc., Sony, EPAM and Teradata are on the list of those who have left. But, on the other hand, McDonald’s is on the same list, the conditions for leaving Russia look very ambiguous: McDonald’s Corporation has the right to a priority buyout of the Vkusno-and Dot business within 15 years.
Thirdly, some of the remaining companies still do not work at full capacity, but in a reduced format, observing certain restrictions. As for companies that have transferred their businesses to local management in the form of new legal entities, the real situation can be even more complicated. Whether they retain ties with the former head office and to what extent is an open question.
Of course, in addition to the companies mentioned in the material, there are dozens of other unique examples. Yes, and 8.5% – agree, a lot. However, before concluding that the desired / favorite brand has really left our country, it is worth carefully studying the news – perhaps it is quietly and imperceptibly working here under a completely different name.
Published on 15.02.2023
