As foreign companies slowly make their way into the Russian market and try to take up more government and private contracts, Russian manufacturers for software are gradually popping up everywhere. With exports being shipped to other European countries and even to the United States, they are rapidly excelling and creating a new demand abroad.

Geutebruck is but one of the major foreign players trying to rapidly expand in Russia. "One of the major challenges for us is getting into the private market. 90 percent of our clients are more or less companies associated with the government or ordering for the government itself. However, the demands for the public and private sectors are very different," said Vladimir Maksimov, General Manager for Geutebruck. The heaad quarters for Geutebruck originally noticed that the Russian branches wanted to sell and provide future strategies by providing technical training and selling installing their systems. They did not want to compete with their partners business but just try to do business in new areas. "Our main partners are system integrators and installers that do not just move boxes. We position ourselves as a system house to give solutions to clients. Distribution is not just about creating a business relationship with system integrators and installers, but more about working closely with existing potential end-users. They do not always know what they need so explaining the functions, really creates the direct demand from end users to the market."

Minor Setbacks

Although there is a demand in the market, it is never enough t o just assume acceptance of foreign products. There has always been a problem with price that occurs when the foreign companies try to expand in the Russian market. According to Stanislav Guchia, General Manager for Axis, "with integration, quite often people try to buy cheaper products and then they have problems with installation. With us operating with open standards, it is easy for us to integrate. People do not understand in the beginning but after their first installation, they usually switch." Additionally, setting up acentral repair center for foreign manufacturers can also be fairly difficult. For Bosch, General Mana g e r Koen Romme l mentioned that "in order to repair it centrally, we pay tax in and tax out so this gets to be quite costly, especially in Moscow. Although we have one central repair point, we will establish a local repair solution for the Russian market in order to be able to commit ourselves to the three-year warranty period, which is common within Bosch Security Systems."


Trends for the Future

"In the last two years, we have seen a different approach to security in the Russian market. People now want to understand integrated solutions and no longer focus on camera and fire detectors. They want concepts for tomorrow," said Movsisyan, General Manager for ADT. "We want to make thi s pos s ible for people without having them afford big investments. There are many companies acting as just distributors,distributors, but now companies try to integrate their abilities not just as a distributor but also as a manufacturer or system integrator. Additionally, "we are seeing the market going up and the companies beginning to take niche segments in the market," explained Stanislav Guchia ofA&TV. "Brand names purchased by state/federal structures are capable of earning large amounts of money to establish reliable security systems. The Russian regions lag behind in development due to lower living standards. But now the trends for many regions are starting to catch up with Moscow because the country is becoming more stable and it's all relative so business production starts to grow." As far as the market for commercial and residential housing is concerned, these verticals seem to be increasing substantially, especially when it comes to the security guarding market volume which will make approximately US$5.8 billion in 2007. It is already comparable in volume to countries like France and Germany. Central monitoring stations are coming out on top as a key factor for keeping safe cities. Within Moscow, there are about 250 communities that are in the region, out of which five to seven thousand houses operate on this system. Virtually all villa communities are protected by central station monitoring.


IP Products Creating Wave of the Future

"For technicians this is the future. Let us look at security systems in Russia. We prefer to divide systems in several parts. Fire/burglar alarms, access control and CCTVs are the most typical in Russia. Fire/burglar alarms are already beginning to integrate IP technologies by using their way to transfer their message about errors to monitoring alarm centers," said Osopov, General Manager for Satro-Paladin. "Even with the biggest market for Asian products, the DVRs in the CCTVs use IP to get data from the DVR to remote PCs, but second is to see the beginning of transference of data from network cameras to PCs or network DVRs. It is avery popular subject for us now, as it will only need another two to three years to develop this installation on all network cameras." Gorbanev, Technical Director for ITV, stated further that "a world famous expert Vladimir Vlado Damianovski came to Russia last year and said that 'according to trends in the IP market there will be a rise in IP and analog will be out of the market in a few years.' Globally there will be a rise. But because Russia no longer lags far behind the rest of the world, it is very important to remember this for the security business. Our end-users are now asking for integrated systems and IP cameras, access control, fire alarms, intrusion and cash registries all need to learn to operate together." However, even wi th all these added changes, many Russian still might find it daunting to have IP systems.
For many according to Guchia, General Manager for Axis, "IP is considered a danger in the minds of many. Some think it is too expensive but in two or three years this might all change. However I think in no less than four years, you should be seeing that more than 80 percent of the systems will be
running with IP in Moscow."

Seeing the Big Picture

The growth of the Russian market has been tremendous. The potential growth through new projects, emerging verticals and the increasing desire to follow all the latest trends; prove that the market has most certainly bounced back from its former financial crisis. Foreign companies are slowly setting up their own distribution channels in Russia rather than going through local partners as they learn more about the business and the competition in the market; which only stimulates greater improvements. Earning its main business as adistributor, the Russian market is slowly birthing manufacturers that are not only able to supply the local market but also the needs of the greater security industry as a whole.And while the previous need to depend on imported goods from Asia still existed, there is a gradual overthrow of Russian manufacturers becoming more aware of the power behind local manufacturers that are slowly rising.