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Interview with Andrew Pavliv, CEO, N-iX Article

N-iX CEO Andrew Pavliv on IT Outsourcing in Ukraine

Being one of the most attractive outsourcing destinations in Eastern Europe, Ukraine has a pool of over 75.000 experienced software developers working for 2000 national and international companies. Even though previous year was challenging for the country, Ukrainian IT industry continues to show substantial growth. Here we introduce an interview with  Andrew Pavliv, СEO of Ukrainian software development company N-iX  outlining current situation and outsourcing opportunities in the country.

How did you decide to start IT outsourcing business?

Together with two partners we created N-iX as a software company startup. Our idea was to make software that would allow our clients to work with Network products – namely with NetWare (Novell’s server) and GroupWise (Novell’s analog of Outlook Exchange) in Linux environment.

The company was started in early 2002 thanks to Werner Richard Kreiner, who was running a small IT consulting business and worked closely with Novell products such as NetWare and GroupWise in Germany. We called our firm “Novellix” combining the words Novell and Linux. After several months of work, we were able to present software beta to our customers.

Users started to download our product and many of them thought that the product came from Novell. This was a big issue for Novell, and our case got on the table of Novell vice-president, Chris Stone. That time Novell was choosing a serious strategy to approach Linux and they found our product interesting, since it enabled their technologies on Linux’s desktops. Novell initiated cooperation that was later transformed into an acqui-hire agreement, which means that they bought our technology but continued to work with us like with an outsourcing company.

From 2003 to 2005 our company, renamed to N-iX following Novell’s request, worked almost exclusively with Novell. In 2005, we enlarged our client portfolio for outsourcing activities. Unlike Novell, our new customers addressed us to further develop their existing products. We started to offer long-term cooperation model based on dedicated development teams which is still our core service.

What makes Ukraine and Lviv good places for IT?

Together with two partners we created N-iX as a software company startup. Our idea was to make software that would allow our clients to work with Network products – namely with NetWare (Novell’s server) and GroupWise (Novell’s analog of Outlook Exchange) in Linux environment.

The company was started in early 2002. We called our firm “Novellix” combining the words Novell and Linux. After several months of work, we were able to present software beta to our customers. Novell has later bought our technology but continued to work with us like with an outsourcing company.

From 2003 to 2005 our company, renamed to N-iX following Novell’s request, worked almost exclusively with Novell. In 2005, we enlarged our client portfolio for outsourcing activities. Unlike Novell, our new customers addressed us to further develop their existing products. We started to offer long-term cooperation model based on dedicated development teams which is still our core service.

What benefits do customers get from outsourcing to Ukraine?

Putting aside businesses like call-centers that simply seek to cheapen their operations, product companies seek talent and cost-effective solutions for their R&D. For instance, in London, New York and other big centers it is hard to find appropriate specialists — and those you will find will ask for a really high wage, even compared to other industries in these countries. Ukraine, with its highly educated population and technological assets – inherited, to a large extent, from the former Soviet Union – appears a good choice.

To which extent have recent political tensions affected Ukrainian tech companies?

Speaking about Lviv, here we feel pretty safe. That has been our message to all of our customers: there is not much to worry about in Lviv, one thousand miles away from the areas in Eastern Ukraine that are affected by the conflict. So, the clients who knew something about Ukraine understood this. Some have even become more willing to do business in Ukraine, like companies from Israel that are accustomed to such situations. But for those with no knowledge of the country, it looked as if the entire Ukraine was on fire. When watching the news, they felt their business could be under threat and considered other destinations like Poland or Bulgaria. As a consequence, on our side, we’re considering opening a new office Sofia, Bulgaria to offer full peace of mind to these new customers.

In fact, these troubles did affect the dynamics of our growth, but we didn’t lose or fire anyone. On the other hand, the current wave of specialists migrating from Eastern Ukraine to Lviv is, in a sense, positive, since they choose western Ukraine rather than Kyiv. In terms of comfort, the city is competing with the capital and when specialists consider where to move Lviv sometimes gets the first place on their list. I also know a small studio of 12 gaming artists that moved from Donetsk (a war-torn city of Eastern Ukraine)and joined one of the studios here in Lviv. These moves could facilitate the development of the industry here.

Generally speaking, political events and a crisis in the east bring us a new challenge. Tech community needs to be more public about the situation in the country and keep customers confident and informed. Getting serious, positive news will give readers worldwide confidence in the situation. They will understand that Ukrainian companies continue to work and grow. Probably, not as fast as we planned, but steadily nevertheless.

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