Established in 1993, Austin-headquartered Softserve is today one of Ukraine’s leading IT companies, employing some 8,000 people and with 30 offices worldwide. Offering cutting-edge solutions to its clients for over 25 years, the company is currently at the forefront of the latest emerging technologies such as Big Data and machine learning. In this interview, chairman and co-founder Yaroslav Lyubinets discusses the company’s evolution over the past two decades, how a focus on education and personal development has been crucial to its success, collaborations with leading organizations such as Carnegie Mellon and Google, and the thriving IT landscape in Ukraine. Meanwhile, Softserve Board Member Taras Kytsmey challenges the perspective of IT outsourcing, explaining that in Ukraine, IT companies are not offering basic services, but a full range of cutting-edge IT solutions and consultancy services that allows them to solve client challenges and define their needs
Softserve was founded in 1993 at a time when there were no management books in Ukraine. What inspired you to start the company and what are some of the biggest milestones you have achieved?
YL: My friends and I had come from computer science backgrounds and we had completed many ERP-like systems for Ukrainian enterprises. And in 1993 it was really a unique opportunity for us when a couple of young businessmen came from the United States and set up business incubators. A business plan for Softserve was presented, which was a company that would provide IT services mainly for US clients.
The business plan was very successful and as a result we started Softserve and we were proud that our first client was General Electric. After we completed this project, we completed several more. You were right in saying that management science was almost non-existent in Ukraine so we had to learn management practices, as well as software and product development practices. And we focused on that for the first seven to ten years.
After that we started to expand and opened the first office in the US around 2000 in Washington D.C. Then we opened an office in Boston, followed by our office in Austin, which is where our headquarters is now based, as well as our experience design office. Now we have offices and business representation in many places in the US – in San Francisco, Utah, Boston, Chicago, New York, Atlanta, and Toronto, Canada. So we are covering all the major parts of North America.
After that, around 10 years ago, we started to think about organizational development and building proper corporate governance. We created a board of directors and built a professional management team, so we now have C-level managers from the U.S., Europe as well as Ukraine. Also at the same time, we improved our organizational structures so we built our competency management system and we started our corporate university, and so-called functional offices to develop our capabilities in different technological areas. And now this idea has been transformed into a center of excellence, which today plays a very important role in enabling us to provide our clients with innovative solutions and cutting-edge technologies
You also have a very strong educational component at Softserve. Can you give an overview of this aspect of the company?
YL: Yes, we are very proud of our corporate university, which started as an IT academy to provide bootcamp training as well as English classes. Today it offers more than 40 different technological courses with 1,000 graduates every year. We hire about 70% of them while we are really happy to send the other to the labor force to increase the IT market in Ukraine and beyond. We also offer IT education in other global locations – for example in Poland in Bulgaria and in the US, where we recently completed a successful experiment in Utah.
We recently started a business school where we offer courses on leadership development for future managers and executives. At the school, we use our own managers as well as the best professors from business schools in Ukraine.
I would say there are two main parts of our success and our mission. First is providing the best innovative solutions to our clients. And second is providing our employees with the best place for personal development. The combination of these two parts has brought us to the level of success and that we have today.
We also work in close collaboration with universities and we help with opening laboratories. And five years ago we started to create a new type of computer science program with a private university in Ukraine. It was a great experience because they are a private university so they are very agile and also really focused on innovation. They have already graduated from the first bachelors and this program is really the best in Ukraine.
Seeing that you have your headquarters in Austin, how is Softserve positioned in the US from a software and IT perspective? How immersed are you in the market there, how much would you like to grow and what is the outlook?
Currently, there are around 8,000 professionals at Softserve and we are growing quickly and better than the average market growth. Now we have 30 global offices in 12 countries and we will continue to grow. We are not only growing in terms of size, but also in terms of the level of services we are providing. In 2013, SoftServe established its Centre of Excellence (COE) in Austin, where today it has some 800 experts. What they do is IT consultancy work and define solutions, which after all our teams can implement into systems when needed.
And also, historically, we started to work with IT providers and we still work and are successful with them. This is rather unusual because to work with these clients you have to be excellent from a technology perspective. We have been technologically excellent from day one and we are currently focusing on penetrating other types of markets.
We’ve also been active in the U.S. since day one. But five/ten years ago, we started to pay more attention to Europe. And about a year ago we started to look at Asia and the Middle East. Now we have a couple of clients in the Middle East, in Singapore, so we will probably penetrate these markets as well. But we still have a lot to do in North America and Europe. In this region, we are focusing more on working with enterprises and providing high-value solutions for them.
Software also offers services in relation to emerging digital technologies, IoT, Big Data, etc. What development would you say best describes your software capabilities within this emerging technology realm?
YL: As I said before, we have 8,000 employees and 800 of them are in the COE. They are experts in Big Data, Machine Learning and so on. And here, what I would say characterizes us is that we are developing methodologies and horizontal solutions that could be used in many verticals. To develop these methodologies we are working with the best universities. For example, we are working with Carnegie Mellon in software architecture and together we developed methodologies to use software architecture in learning. Even now, Carnegie Mellon uses this approach in their courses on software architecture and we use this approach in our company when we are starting work to find new solutions for our clients. So this approach helps us to grow the level of our people.
Another example is our partnership with Google on Cloud and Big Data. Together we are approaching potential new clients for Google Cloud Platform and also potential new clients for us to provide solutions for those cloud platforms.
There are huge amounts of data, which could be used, for example, to support oil and gas drilling and so on. So we provide Big Data infrastructure to structure and consolidate huge amounts of data, which is generally unstructured, in different forms and places, and is impossible to analyze. After that, we use data analysis approaches based on machine learning. Scientists would traditionally spend months creating data structures suitable for analysis. But now a couple of months is turned into a couple of hours. So for example, this refined data could be used for geological analysis for oil and gas drilling, but also in financial sectors and other areas where they have huge amounts of data but cannot collect it efficiently. We can create infrastructure from the data, and after that we can help them to analyze this data.
What is the role of foreign investment in the IT sector?
TK: Well, let us take EPAM or Luxoft, for example. These foreign companies came to Ukraine, opened development centers and created jobs, including those involving sophisticated IT projects. Currently, there are many foreign investors looking for acquisitions in Ukraine and are setting up development centers.
Digital transformation can give you a lot of competitive advantages and all companies around the world need to look for places where they can implement these advantages.
Local companies in Ukraine have developed great experience in many areas, such as business analysis, software architecture, system architecture, and project management, etc. These companies are not just offering a specific service; they can provide full software around the latest cutting-edge technologies such as artificial intelligence.
It’s about addressing the needs of clients that they may not even have been aware they had. We ask clients what needs they have and create solutions around challenges. Using the enterprise digital journey to define needs for clients and offering consulting services that leverage the most cutting-edge technology solutions is what SoftServe provides. We are engineers, consultants, advisors, and providers.
Do you have a final message on why investors should be partnering with you and why they should be looking at the IT hub in Ukraine?
TK: Ukraine has several advantages as an IT hub. First, it has more than enough talent, most of which prefer to go to IT, which is why Ukraine’s IT market is booming today. Besides bringing in capital from around the world, IT is creating a new generation of young, smart, and energetic people, which is creating its own internal market – in the sense that one job in IT creates three other jobs in other industries. So IT is having a huge impact on the whole economy.
YL: Today, Ukraine is a really well known IT location. Eastern Europe is great for any type of IT work and Ukraine is even better because of our size and the size of our IT community. There are around 200,000 IT engineers here that work on export-oriented projects and mostly in R&D work. So it is not maintenance; it really means that they are using cutting-edge technologies and developing new products. And when they are developing these products and they are mastering knowledge and becoming better and better after each project. So the IT sector is growing in size and we are capable of more projects, of bigger projects and also capable of more value-added projects.