Billionaire urges Russian firms to build alternative to SAP software

Anastasia Lyrchikova and Alexander Marrow
·2 min read
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FILE PHOTO: St. Petersburg International Economic Forum (SPIEF)

By Anastasia Lyrchikova and Alexander Marrow

MOSCOW (Reuters) - Billionaire Alexey Mordashov has proposed creating a Russian consortium to invest billions in developing an alternative to the widely-used business software made by Germany's SAP, which curtailed its operations in Russia over the Ukraine conflict.

SAP announced plans to exit Russia in April 2022 and allowed maintenance contracts with customers to expire at the end of 2023 as it gradually withdrew in opposition to Moscow despatching troops to Ukraine in February 2022.

Finding an alternative to SAP, whose software helps businesses manage functions from marketing and human resources to logistics and procurement, is crucial for Russia as it seeks to develop without access to many Western technologies.

"We are seeing various attempts, various projects in Russia, but we believe there is as yet no class of system that can meet the needs of demanding industrial customers, above all, and replace SAP in its functionality," Mordashov, Russian steelmaker Severstal's largest shareholder, said at a forum in Nizhny Novgorod on Tuesday.

Mordashov said Severstal and petrochemicals firm Sibur were developing solutions and expected to have some comparable to SAP's in five years, but he suggested that a consortium of large Russian companies would likely be needed to take on the challenge.

"We understand that we are talking about sums around billions of dollars that we will need over these five years to create an analogue of SAP," Mordashov said, referring specifically to SAP's ERP enterprise resource planning (ERP) software.

"We have no other way," he said. "SAP is becoming outdated, we are cut off from the vendor, we cannot perform updates related, above all, to cybersecurity."

A spokesperson for SAP said the company had fully supported and implemented coordinated inter-governmental sanctions against Russia from the start of the Ukraine conflict.

"Since March 20, 2024, all remaining services to Russian customers and partners have been terminated, in line with the 12th package of EU sanctions," SAP said. "A small wind-down team is working on the remaining legal and contractual obligations."

(Reporting by Anastasia Lyrchikova in Moscow and Alexander Marrow in London; Editing by Mark Potter)