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

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?


These are only just a few examples. There are numerous Russian software firms generating billions of dollars of revenue which have products and services that have significant enterprise penetration in the United States, EMEA and Asia. There are also many smaller ones which perform niche or specialized services, such as subcontracting.

It should also be noted that a great deal of mobile apps, including entertainment software for iOS, Android and Windows also originate from Russia.

We aren't even counting the giant technology companies in the software and technology services industries that are household names in the United States and EMEA which due to the excellent reputation of Russian developers producing high-quality and value-priced work compared to their US and Western Europe-based counterparts, have invested hundreds of millions of dollars in having developer as well as reseller channel presence in Russia. 

Contractor H-1Bs are almost certainly going to be cancelled en-masse or will not be renewed for Russian nationals performing work for US-based corporations. You can count on it.

The Obama administration does not need to levy Iran-style isolationist sanctions against Russia for a snowball effect to start within US corporations that use Russian software or services.

The cooling of relations has already made C-seats within corporate America extremely concerned about using software that originates from Russia or has been produced by Russian nationals. The most conservative of companies almost certainly will probably just "rip and replace" most off-the-shelf stuff and go with other solutions, preferably American ones.

The Russian mobile apps? BYOD blacklist MDM policies will wall them off from being installed on any device that can access a corporate network. And if sanctions are put in place by the current or next administration, we can expect them to actually disappear off the mobile device stores entirely.

Never mind the disappearance of everyone's beloved Flappy Bird. Cut the Rope, which is made by Moscow-based Zeptolab, and countless games and apps originating from Russia could be no more if actual sanctions are put in place. 

But America's C-seats aren't going to wait for the current administration to levy sanctions. If there is any lack of confidence in a vendor's trustworthiness, or if there is any concern that their customer loyalty can be swapped out or influenced by the Putin regime and used to compromise their own systems you can be assured that software of Russian origin is going to disappear very quickly from US IT infrastructure.

Contractor H-1Bs are almost certainly going to be cancelled en-masse or will not be renewed for Russian nationals performing work for US-based corporations. You can count on it.

As a Jewish American of mixed Russian, Belarussian, Polish and Ukrainian ethnicity it pains me to say all of these things and to subscribe to what could be classified as new-age McCarthyist paranoia, but I'm only saying out loud what many CEOs, CTOs and CIOs are thinking privately and in the sanctity of their own plush corporate offices. 

Any vendor that is being considered for a large software contract with a US company is going to undergo significant scrutiny, and will be asked if any of their product involved Russian developers. If it doesn't pass the most basic of audits and sniff tests they can just forget about doing business in this country, period.

So if a vendor does have prominent Russian developer headcount, they will have to pack up shop and move those labs back to the US or country that is better aligned with US interests. This goes especially for anybody wanting to do Federal contract work as well.

But then there is the issue of custom code produced by outsourced firms. That gets a lot trickier.

Obviously, there's the question of how recent the code is, and whether or not there are good methods in place to audit it. We can expect that there will be services products offered in the near future by US and Western European IT firms to pour through vast amounts of custom code so that they can be absolutely sure there are no backdoor compromises left behind by Russian nationals under the influence of the Putin regime.

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

I don't have to tell any of you just how expensive a proposition this is. The wealthiest corporations, sensing a huge risk to security and customer confidence will address this as quickly as they can and will swallow the bitter pill of costly audits.

But many companies may not have the immediate funds to do it and will try their best to mitigate the risk on their own, and compromised code may sit around for years until major system migrations occur and the old code gets (hopefully) flushed out.

We will be almost certainly be dealing with Russian cyberattacks from within the walls of our own companies for years to come, from software that was originally developed under the auspices of having access to relatively cheap and highly-skilled strategically outsourced programmer talent.  

My greatest hope is that cooler heads will prevail and Vladimir Putin will step away from the brink of a new Cold War, one that will be not only destructive in terms of turning back over 30 years of partnership between our two nations since the fall of the Soviet Union, but also one which will yield tremendous amounts of economic damage for his country as well as ours.

Will Russian software and services become the first victim in a new Cold War? Talk Back and Let Me Know.

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


Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience 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.

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  • Easy solution

    The 'West' should stop meddling in other countries matters. People familiar with world affairs knows that who is behind the various 'arab springs' and 'revolutions' in the former soviet republics.
    • You are not familiar with world affairs

      Just like how Russian cyber-criminals should stop stealing millions of dollars from American companies.

      Funny how countries like Estonia, Latvia, Lithuania, and Poland broke away from mother Russia as soon as they got the chance and joined the EU and NATO to prevent another invasion and occupation. They sure aren't complaining about the extra U.S. fighters being moved there to counter Tzar Putin's bluster.

      For non-Russians: search on "Molotov-Ribbentrop Pact" to understand just what Russians think of Eastern Europe.
    • Why? Is Russia going to do so?

      Russia had been brazenly interfering in the internal affairs of Ukraine and other former Soviet republics for years. Hezbollah was founded in Iran in 1980 and has served as a surrogate for the Iranian government in neighboring countries (especially Lebanon) ever since. There are numerous other examples.

      Advocating that western democracies not intervene is effectively advocating that they cede influence to less scrupulous sorts of states.
      John L. Ries
      • Hezbollah

        Hezbollah came about because of the israeli invasion and occupation of Lebanon. It got some funding by Iran after they showed that they were a force to be reckoned with.
        • Already existed

          Despite the Wikipedia article, I was seeing references to Hezbollah ("the party of God") *before* the Israeli invasion of Lebanon. It is no more an indigenous Lebanese organization than is the Lebanese Baath Party.
          John L. Ries
    • Breakaways

      The people behind these revolutions were locals. They got support from many outside sources, not just the US and Western Europe.
    • Not only are you not

      familiar with world affairs, you seem to be unfamiliar with proper sentence construction.
    • Define the West.

      Where is the border of the West ? Should Russia be OK taking half of the Germany for example ?
      • Good point

        It should be remembered that Kaliningrad Oblast was part of Germany until WWII and was never Russian, or even Slavic before that (the pre-German Prussians were Balts, most closely related to modern-day Lithuanians). As far as I'm aware, the entire Russian population of what had been Northeast Prussia settled there after WWII (the pre-existing German population was forcibly evacuated).

        On the whole, irredentism is a can of worms best left unopened.
        John L. Ries
    • Owl:Net makes a good point

      "Former U.S. Ambassador: Behind Crimea Crisis, Russia Responding to Years of "Hostile" U.S. Policy

      Jack Matlock, Jr., was the U.S. Ambassador to the U.S.S.R. during the George H.Bush administration.
      Rabid Howler Monkey
      • Yay! When I responded to Owl:Net, I got instant votes and flags

        Presumably, inherited from Owl:Net's post.
        Rabid Howler Monkey
    • ? Do they?

      You sound like James Bond. Please let us all in on your secrets.

      You sound full of....well, you know what.

      "People familiar with world affairs knows that who is behind the various 'arab springs' and 'revolutions' in the former soviet republics."

      Uhhhh...I would say yes...yes we do. It seems pretty obvious its the people of those countries. Particularly obvious when you see literally countless thousands of them in the streets risking the lives of themselves and their families to do so. So...given the very very clear cut obvious facts that inescapably exist, it appears that the people behind and infront of these uprisings are indeed the very people who we not only see on our own televisions and the internet, but curiously enough the very same people who at various times have admitted to being behind the efforts and promoting such uprisings.

      "The 'West' should stop meddling in other countries matters"

      Ya. Sure the west should. The west should just let everyone do what they want whenever they want and when the crap really hits the fan, and towers start dropping and lives are lost overseas and the whole world is swirling in the toilet bowl then you can be the BIGMAN who points out how idiotic the west was for sitting around letting anarchy reign in foreign countries as if the U.S.A. was an untouchable island that dosnt exist on the same planet.

      You really do appear to have about as little knowledge of international affairs as a human being could have and still be breathing and in at least a somewhat conscious state.

      You shouldn't even be talking about things you know absolutely nothing about never mind making the bold ludicrous statements you do.
      • While there is some argument that the United States

        Has to intervene occasionally, we more often intervene when we should not. I.E. Vietnam, Korea, Iraq and trying to put the Shah back into power, etc.

        The United States needs to stop using military muscle to make changes and use our words and money to make changes. Which changes due to those latter things are much longer lasting.
  • Who knew that Chicken Little was actually Russian?

    Kaspersky Lab, NGINX Inc., Parallels, Inc., Acronis, and Veeam Software are all minor players in the U.S. IT sector. Kaspersky is somewhat popular in the consumer market, but it has little importance in the IT business because of fears of Russian nationalism. Acronis is more of a problem because its imaging product is popular, but a non-Russian will write a replacement. Symantec bundled its Ghost with other enterprise products.

    Apps aren't important in the IT sector; quit trying to obfuscate the issue. And if we lose Russian apps, then Americans will write some to replace those. Sounds like a win-win to me.

    "Contractor H-1Bs are almost certainly going to be cancelled en-masse" as they should be. Did you notice that Russian nationals were the first ones to storm a Crimean military base -- and killed a Ukrainian warrant officer? We should also cancel all security clearances for Russian and Chinese nationals.

    "We will be almost certainly be dealing with Russian cyberattacks from within the walls of our own companies for years to come" and that's exactly why we need to purge them.

    Anyone who wants to know what Russian nationalists will do to countries and companies who insult mother Russia should search on "Estonia 2007 cyber attacks."

    From my blog
    The U.S. must quickly wean itself off Russian rockets and engines from Tzar Vladimir Putin
    Putin's Russian love / Ukraine's Molotov cocktail parties / Are Estonia, Latvia, and Lithuania next?
    • It would probbly be a boon

      to eliminate all "apps". Applications and programs of substance are what got the industry this far, not snippets of code doing single purpose things best delivered by batch files in many cases.
    • Most likely a different scenario

      The article insinuates that Russia (or the companies themselves) will pull our or block their products from the US. As others have mentioned, this won't be a major blow. I know and have used, to some extent, a number of these packages. However, I'm always searching for better products, and I now use none of them. There is plenty of competition. It would be frustrating to have to change for some, but I imagine, if it became that obvious - that this became a software cold war - that most people in the US would be glad to drop the "enemy's" software.

      That said, I doubt that would even happen. First, they're business owners. Their goal is to make money. These packages are purchased by millions in the US, I'd guess. Blocking that software would likely cost them billions. They won't give that up. Second, there is a greater fear - that they would continue to sell the software, pocket the cash, then use the software to infect the systems. Considering their purposes - antivirus, low-level copying/cloning, etc - they could theoretically first gain access to our data, and then infect or delete it once they had it.

      Most of these are legitmate packages and I'm not suggesting that the malicious ideas expressed would happen. But if you're going to fear the "cold war" impact, then that would be the bigger concern.
    • Baltic countries

      Ukrainization of russian Crimea is a historical casus. Russia have no resources for ex-USSR members. Don't worry. Even funny to read it.
      • Crimea was only Russian since 1783

        Funny how you Russians always forget that you stole it from the Ottoman Empire. Are you going to give it back to Turkey now?
        • Turkey

          :) may be let's drill into the hystory more deeply? I am sure Ottoman Empire is not a original owner or creator of Crimea. And why Turkey? Italy or Greece are pretenders too.
          • Russians are inconsistent

            First you said that Crimea belongs to Russia. Now you say that Crimea belongs to the original owners. Make up your mind; which is it?

            I do not like it when countries invade and occupy other countries on a whim. I do not like the fact that Turkey occupies a good part of Cyprus, that Russia occupies 11% of Finland, that China occupies Tibet, that Russia occupies Crimea, etc.