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June 25, 1990

THE SOVIET UNION DISCOVERS THE JOYS OF “COWBOY” PERSONAL COMPUTER OPERATORS

By CBR Staff Writer

Figures vary on the numbers of personal computers in use in the USSR, but it is somewhere around the 300,000 mark. This is in a country with a population of just under 300m and compares to the 30m personal computers in the US. The Soviet Union’s own estimates of the numbers of personal computers it needs varies too, Pravda has noted a figure of 28m if the USSR is to catch up with the West. The potential market for Western firms in an economic climate where restrictions are being relaxed on both the Soviet and Western sides, is huge. Obviously the Soviet government is keen to develop its own information technology sector and, back in December 1985, the Interbranch Scientific and Technical Complex was set up to encourage the upgrading and standardisation of personal computers, making mass production possible.

Economic back seat

But however anxious the Soviets are to avoid their own computer industry taking an economic back seat, the government acknowledges that Western tech-nology imports are essential to getting the ball rolling in the modernisation process. A basic level of computerisation must be implemented quickly, if President Gorbachev is to achieve improved management, produc-tivity and product quality. Hence his Californian comment, made during his recent visit to the US, that those firms that stand on the sidelines now will not be given priority later, when the political and economic situation settles down. But are Western firms that have taken the plunge into the Soviet market helping the Soviet Union to improve business practices at basic levels – so that it will eventually become a mature trading partner for the West, or are they just making a fast buck and a swift exit, thereby, in the long run undermining the Soviet economy? Peter Jays of Quest International says that too many of the firms that have recently gone into the Soviet market go in to make money quickly and then get out again, leaving customers with no support. Quest is a long standing, fully accredited distributor in the Soviet Union with clients including Apricot and Novell. In Jays’ experience it is the smaller operators that sell cheap IBM clone personal computers, typically out of a hotel room, that disappear when the user needs support or maintenance. And because of deregulation in the Soviet market with relatively new, smaller firms being set up, there are lots of inexperienced customers around desperate for computers and all too ready to fall for a lower price. The result is confusion in a market which is already hampered by the inevitable instability brought about by perestroika, a scarcity of hard currency and a sizeable black market in computers imported from Singapore and Taiwan. Ironically, while Quest stresses the importance of staying with the USSR, even in this difficult period of economic and political instability, it has recently been divested from its parent group Erskine House. Erskine says that Quest no longer fits in with its core business – and in the short to medium term, the Soviet Union is no longer a profitable market to be in as there are too many economic troubles. Like Peter Jays, Mike Sutton at Autodesk also deplores firms that do not commit themselves to the market, by providing the proper training and support for users. –

By Sonya McGilchrist

Autodesk has established six centres in the Soviet Union to train people in AutoCad, its computer aided design software. The company is also fully accredited, although it has been in the Soviet Union for only four years. Perhaps more importantly – in terms of the future prospects for the USSR and its trading capability with the West – Autodesk also imports and distributes computer-aided design software from the Soviet Union. Last year the company set up a joint venture in Moscow with the Soviet software company, Intograph, originally part of the Soviet Ministry of Construction, which now develops add-on software for specific AutoCad applications. The two companies form-ed Parallel, in which Autodesk has a 51% stake, with Intograph taking the remaining 49%. AutoDesk distri

butes Intograph’s software for AutoCad in the West, using its distribution network while IntoGraph does the same in the USSR, with AutoCad software generated in the West. Mike Sutton of Autodesk says IntoGraph has shipped several thousand copies of its AutoList Compiler for AutoCad, earning the hard currency that is essential to buy more hardware – and the software from AutoDesk to run on it. Sutton is adamant that if companies want to prosper in Comecon countries and if in turn those countries are to prosper and become viable trading partners, Western companies must not indulge in opportunist selling, but behave responsibly in their dealings with the East. This means using authorised distribution channels, providing maintenance and training users. Amstrad has recently entered the Soviet Union personal computer market, it released its 1640 personal computer with Cyrillic keyboard and manual at Christmas, although Chris Anstay at Amstrad says that the company’s machines had been finding their way over the border before this. The Cyrillic machine is clearly intended to capitalise on the hungry Soviet market and perhaps on existing Amstrad users, but the company is not looking to commit itself too deeply to the Soviet market. According to Anstay the risks are just too great to justify investment in the USSR – Amstrad is happy to sell its personal computers to any users, but that’s as far as it goes. Economic instability and the fear of future nationalisation are the major reasons why Amstrad has made no long term investments in the market. The company has no authorised distributors and provides no direct support. It deals through the agents – many of whom have sprung up since perestroika – who sell in hotel foyers. According to Anstay a Russian can spend up to 20 years’ salary on a personal computer.

Get on a plane So what does the user do if it’s an Amstrad and it goes wrong? Fix it himself, is the answer, or find a friend that can. Amstrad relies on the enormous amounts of individual skills that Anstay says are around in the USSR, he says they have enough people that understand software and hardware to fix the machine and get on a plane to get a spare part. As for East-West co-operation in the form of joint ventures, they are not worth the time, effort and management skills for Amstrad Anstay maintains that that sort of investment is really only worth the while of small companies. ICL, however, has been in the Soviet Union for 30 years and as well as shipping its Level 15 mainframes, DRS 30s and 40s, it has a joint venture in Leningrad with Morflot, the Soviet Ministry of Merchant Marine and Leningrad City Council. Staff at the site are both Russian and British – the chief is British, but his deputy is Russian. There are exchange training programmes in Windsor and the USSR for staff of both nationalities. Well- established firms seem to be taking their reponsibilities towards the Soviet user seriously, but for those that aren’t, the short term rewards may not be worth it. Apart from obstructing the USSR’s transition to a stable, market economy they may not individually benefit when that market becomes established – some reckon that it’s not only those that stand on the sidelines that are being noted.

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