Ukraine: Europe’s emerging tech hub?

7 May 2019

Having established itself as a thriving location for outsourcing, the gambling industry is increasingly looking to Ukraine when it needs a low-cost base for technology teams. iGaming Business talks to some of the companies established in the country.

Why has Ukraine become such a popular base for igaming operators’ technology teams – what does it offer that other countries can’t?
Conor Durnin, senior product manager, SportCaller (CD): Thanks to an abundance of technical resources available at an appropriate cost, Ukraine’s popularity is no surprise. Tellingly, many young people are now looking to move to large urban centres where there are significant opportunities. But as long as heavy multinational corporations (MNCs) remain reluctant to establish large technology development centres in Ukraine, large offshoring companies such as EPAM Systems and Ciklum are going to gladly fill the void for technology graduates.

Valentyn Kyrylenko, VP of Business Development, Betinvest (VK): Ukraine has been a huge development hub for the IT industry over the last couple of decades and igaming has been no exception. With BetConstruct, Playtech and Playson already well established in the market, we have also been active in Ukraine for over 20 years.

The country boasts talented and well-trained IT professionals with a legacy of excellence in the technical education sphere, as well as extensive experience working across multiple businesses and countries.
When it comes to Ukrainian cities, Kyiv is no doubt the main hub and is already on the international map, but Kharkiv, Odessa and Lviv are fast catching up and, thanks to their constantly developing IT educational system and direct foreign investments, are becoming genuine tech hubs.

Dmytro Omelechko, CTO, SoftConstruct Ukraine (DO): Ukraine has a great pool of talent and some excellent technical universities, with top-class graduates every year. This is particularly important for us, as data scientists are essential for the innovative work we do. Of course, this makes it far easier to hire ‘unicorns’ with specific skills, such as natural language processing (NLP), with a level of talent you would be hard-pressed to find anywhere else.

What prompted you to establish a team in Ukraine?
CD: In short, without wishing to make this a state-the-obvious contest, its initial appeal stemmed from cost-effective access to a range of resources that retained the required skills. Naturally, this speaks to market-leading assistance with technology solutions, majoring in flexibility of teams and the speed to scale.

How has the igaming scene developed in Kyiv and Ukraine in the last 5-10 years?

VK: A decade ago Ukraine’s reputation for tech excellence lay principally in its positioning as a software solutions provider for the European market, mostly thanks to its affordable resources. As the market evolves, the major development firms are now looking to shake this image following a decade of developing their teams, products and presence as it becomes a creative centre for igaming in its own right.

Do you see a trend of international firms choosing to establish their own teams or instead outsourcing their work to studios there?
VK: Absolutely. More and more gaming companies are becoming increasingly interested in establishing local business operations in Ukraine. Developing and investing in local talent has clearly borne fruit for the major firms based in the country. These companies now taking ownership of the entire creative process from start to finish. 

DO: In most cases, companies choose to start by outsourcing. Over time, they gradually evolve into having their own office, and soon after their own development teams. In my view, it’s definitely the smartest way for a business to set up its operations in Ukraine, as it’s a gradual process without the need to make big decisions straight away.

A good example of this exploratory approach is William Hill, which established an outsourcing team for three months and then closed. Not all companies are ready to work with international offices; it’s a big job to integrate culture and standards to allow working side-by-side.

CD: To begin with, it was a case of outsourcing some development work to get a proper feel for the territory and its talents. However, over time we’ve built a dedicated team of scrum masters, agile developers and quality engineers, alongside a supporting cast of DevOps, which allows us to self-organise around any free-to-play game-build in the most progressive and effective fashion.

Is there greater tech talent in Ukraine than most other CEE markets?
VK: The principal advantage Ukraine has over most other CEE markets is the combination of both talent and the resources already in place to leverage that talent.

Compared to the rest of CEE, Ukraine has one of the most developed, tech-orientated educational facilities in the region, one that sees thousands of IT newcomers graduate every year. In the past four years alone, the number of IT specialists in Ukraine has doubled, which has no doubt been one of the many catalysts for the rapid market growth we have seen.

Alongside technical education, Ukraine’s focused training centres for specific IT skills also has huge support from some of the nation’s leading IT companies, which is allowing a younger generation of developers to train on a professional level before entering. The practical experience on offer is an advantage that none of the other CEE markets can compete with on the same scale.

Do you feel it is harder to find tech talent in your native market?
CD:
In our Dublin case, there would appear to be a skills shortage in the domains of developers, QA and scrum masters. As a backdrop, large MNCs will continue to hoover up talent with giants such as Google, Facebook and Microsoft always competing for resource. All of which can make it harder to attract the top talent that you need to be successful.

Countries such as Bulgaria, Romania and Latvia all seem to have become popular for operator and supplier tech hubs alongside Ukraine. Why is the region so attractive to gaming companies?
VK: CEE’s growing reputation for IT excellence is providing an excellent case study to show how a legacy for tech education, combined with the appropriate government support has made the region a leading investment destination in the last decade. The further removal of governmental red tape currently taking place, as well as reduction of tax pressure and development of local laws to become more transparent for international firms, will continue to make the region more and more attractive in the years to come. As long as these countries offer safe investment possibilities to international business and meet demand for resources this trend will continue.  


DO: The ratio between salary and costs of living is by far one of the best in the world, it has a moderate climate (especially in the south), a low level of unemployment – and therefore plenty of demand for IT workers. We can see this from the number of mature developers who return to Ukraine after a few years abroad, because working here in the IT industry means they can enjoy a high standard of living, with all the benefits that come from living here. This is a positive trend for the country and the industry now accounts for close to 10% of national GDP, which inspires a lot of confidence in the nation’s future.