Vladimir Bilodid, Director General of United Software Corporation, presented perspective business models for Ukrainian IT export industry at the Ukrainian Outsourcing Forum on 1st November 2007.

In his report “From outsourcing to product development, a model of global companies”, Mr. Bilodid presented the benefits of transferring from outsourcing of software development to innovation sourcing and product development. He presented the successful exeperience of United Software Corporation shifting from pure outsourcing to R&D services and full cycle product development.

According to Vladimir Bilodid, trying to build up IT-resources to surpass India and South-East Asia are hopeless, although Ukrainian IT-industry is developing very rapidly (over 75% in 2006, according to TECHINVEST data). Ukrainian market is already overheated by heavy demand for software developers, while IT companies sell their work by simplest and cheap man-hour model. Ukrainian advantages are the famous scientific schools, deep mathematical backround of our developers, creativity, strive for complex and non-standard projects and ability to get out of the box. Having implemented this potential, Ukraine is capable to take its niche in the world market. To do this, Ukraine needs to shift from picking up mature developers on the market to training them to overcome the shortage of resources, shift from selling man-hours to innovation sourcing and ultimately start development of product-oriented businesses with much higher profitability.

«The problem of Ukrainian IT companies is that they often fail to understand business needs of their clients, which is the key element of creating successful product-based solutions», said Vladimir Bilodid. He showed such example of Ukrainian VC firm TECHINVEST, which started its business by investing into USC, made exit and focused on IP-based businesses.

One of such startups is Financial Algorithmics, which spin-offed from USC. Having met numerous people on the Wall Street companies, doing contract jobs for them, USC team has come to the idea of building own mathematical platform for forecasting financial markets. The project was backed by TECHINVEST and its investment partners, and in 1.5 years Financial