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We continue reviewing outsourcing destinations in Eastern Europe by looking at Nizny Novgorod, a town with a well-established software development industry.

Russia’s IT industry is typically dominated by its two largest and economically strongest cities, Moscow and Saint Petersburg. Nonetheless, the slightly smaller city of Nizhny Novgorod does not fall behind and has currently established itself as one of the major centers in the Russian software development sector. With a population of 1,250,615 Nizhny Novgorod is currently among the leaders in quantity of software application developers.

One of the most prominent players in Nizhny Novgorod’s IT market is Intel, who has been present on the local market for a significant period of time. Intel has two main departments in Nizhny Novgorod – a software development center, employing over 500 software engineers, and a data center. Nizhny Novgorod also attracts a number of nearshore outsourcing companies, such as MERA Networks, Teleca, Luximax and Tecom, among many others.

In terms of training and education, Nizhny Novgorod has 25 scientific R&D institutions, focusing on telecommunications, radio technology and theoretical and applied physics. Situated in the city are also 33 educational centers. Among the ones that provide the most focused training for working in the IT sector are Nizhny Novgorod State University, Nizhny Novgorod Technical University and Nizhny Novgorod Institute of Information Technology.

The latter used to be a former MERA Networks training centre, which reflects the close cooperation between local educational institutions and employers of software developers. Nizhny Novgorod Institute of Information Technology provides courses in IT, software development, system administration, telecommunications, Internet services and IT management.

MERA Networks is one of the biggest Eastern European outsourcing services providers. The company has been on the Russian market for 20 years and currently employs about 1200 software engineers. Its customers include some of the world’s leading telecommunications equipment manufacturers and IT software solutions providers, such as Ericsson and Tiesto.

Another large multinational company operating in the field of outsourcing services for the mobile communications industry is Teleca. The company was established in 1991, under the name Telma. In 2006, Telma Soft was bought by the Swedish Teleca AB. Its Russian branch is currently the leading one in number of employees and completed projects. Teleca works primarily with mobile phone applications and one of its biggest customers is Motorola, for whom they’ve completed over 400 projects.

IT salaries in Nizhniy Novgorod are almost a half of that in Moscow. For example, according to Superjob.ru research conducted last summer, the salary of a Java specialist with at least two years of experience is $1800 net per month. A monthly net salary of a more experienced software developer with solid knowledge of Java may reach $2600 per month.

Nizhny Novgorod is a rapidly developing economic centre. Another one of its attractive features for investments is the fact that it has been selected as one of the four sites in Russia, for building an IT-oriented technological park, which would offer a competitive tax and customs policy. Nizhny Novgorod is also easy to reach from Russia’s capital Moscow. Apart from direct roads, there is also an express railway service, which connects the two cities in 5 hours. Nizhny Novgorod’s airport, Strigino, links the city to major Russian cities. German Lufthansa operates flights from Nizhny Novgorod, connecting the city to Frankfurt and other major German cities.
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