How a digital Cold War with Russia could threaten the IT industry

Summary:What would an escalation of tensions mean for the future of our relationships with Russian software companies, developers, and strategically outsourced tech talent?


All the world's eyes have been on Russia in the last month. The region's hopeful spirit of international peace and cooperation that was evident during the closure of the Sochi Winter Olympics turned to fear and uncertainty when the Ukraine's government ousted its president, Viktor Yanukovych, a close ally of Russian president Vladmir Putin.

This was followed by a referendum and a vote in the Ukraine's Crimea region to secede from its parent country and to rejoin Russia, overturning the former Soviet Union's actions under Nikita Khrushchev to make it part of the Ukrainian Soviet Socialist Republic in 1954.

In the last several days, we've also seen aggressive moves by Russia to send more troops into the region and confiscate Ukranian military bases and assets.

The reaction by the Western world has been total condemnation of Russia's activities. The United States has imposed initial financial, economic, and travel sanctions on Russian officials, which include isolating key Russian financial institutions as well as freezing the US assets of Russian and Ukrainian individuals who were directly involved in the Crimean turmoil.

While the European Union has imposed similar travel bans and asset freezes of key Russian individuals, political realities will likely stop them from imposing wider-range sanctions like those the US is threatening, due to their heavy reliance on Russian natural gas.

While the United States, unlike Europe, is not a major consumer of Russian gas exports, it would be simplistic to say that Russia has no impact on US business at all.

A full-on Cold War with Russia and imposition of the kind of wide-ranging sanctions that we currently impose on Iran and other hostile states would actually have a real and costly impact on the technology industry, should the situation degrade further. 

Let's start with Russian software companies themselves.

Many of these have significant marketshare and widespread use within US corporations. Some of these were founded in Russia, while others are headquartered elsewhere but maintain a significant amount of their development presence within Russia and other parts of Eastern Europe.

If you thought your Y2K mitigation was expensive, wait until your enterprise experiences the Russian Purge.

UK-incorporated Kaspersky Lab, for example, is a major and well-established player in the antivirus/antimalware space. It maintains its international headquarters, and has substantial research and development capabilities, in Russia. It's also thought that Eugene Kaspersky, the company's founder, has strong personal ties to the Putin-controlled government. Kaspersky has repeatedly denied these allegations but questions about the man and his company remain and will be a subject of further scrutiny, particulary as US-Russia tensions escalate.

NGINX Inc., while not even three years old, is the support and consulting arm of an open source reverse proxy web server project that is very popular with some of the most high-volume internet services on the planet. The company has offices in San Francisco, but it is based in Moscow.

Parallels, Inc., is a multinational corporation headquartered in Renton, Washington, that focuses extensively on virtualization technology as well as complex management stacks for billing and provisioning automation used by service providers and private clouds running on VMware's vSphere stack and Microsoft's CloudOS. However, their primary development labs are in Moscow and Novosibirsk, Russia.

Acronis, like Parallels, was founded in 2002 by Russian software developer and venture capitalist Serguei Beloussov. He left Parallels and became CEO of Acronis in May of 2013. The company specializes in bare metal systems backup, systems deployment and storage management software for Microsoft Windows and Linux and is headquartered in Woburn, MA, a suburb of Boston. However, it has substantial R&D operations in Moscow.

Veeam Software led by Russian-born Ratmir Timashev, concentrates on enterprise backup solutions for VMware and Microsoft hypervisor stacks. Like Parallels and Acronis, it is also a multinational. The company maintains its US headquarters in Columbus, Ohio but much of its R&D is based in St. Petersburg, Russia.

Don't go away, there's more on the next page:

Topics: Cloud, Data Centers, Enterprise Software, Security, Developer


Jason Perlow, Sr. Technology Editor at ZDNet is a technologist with over two decades of experience with integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer... Full Bio

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