Microsoft faces troubles in Russia

Microsoft at an event in 2016Microsoft is facing troubles in Russia as Moscow city will replace Software giant’s programs with domestic software on thousands of computers.

A Bloomberg report said the decision of Moscow city was in answer to President Vladimir Putin’s call for Russia’s authorities to reduce dependence on foreign technology amid tensions with the U.S. and Europe.

The Moscow city will initially replace Microsoft’s Exchange Server and Outlook on 6,000 computers with an e-mail system installed by state-run carrier Rostelecom.

Artem Yermolaev, head of information technology for Moscow, said Moscow may expand the deployment of the new software, developed by Russia’s New Cloud Technologies, to as many as 600,000 computers and servers, and may also consider replacing Windows and Office.

Putin is urging state entities and local companies to go domestic amid concerns over security and reliability after U.S. firms shut down paid services in Crimea following Russia’s 2014 annexation. The plan poses a challenge to the likes of Microsoft, SAP and Oracle in the country’s $3 billion software market.

Putin’s internet czar German Klimenko wants to raise taxes on U.S. technology companies to help Russian competitors such as Yandex NV and Group Ltd.

The strategy of Moscow city is to ensure that the money of taxpayers and state-run firms should be primarily spent on local software.

Foreign software makers will be under more pressure Russia will be sourcing more local software for domestic projects.

From 2017, government entities including the Federal Anti-Monopoly Service, General Prosecutor’s Office and Audit Chamber will be tightening their grip on state institutions that aren’t switching to domestic alternatives.

Government entities spend about $295 million a year on foreign software. Communication ministry has produced a list of nearly 2,000 Russian software products that state-run companies should use instead of products from global vendors.

Moscow’s government has already switched Cisco Systems technology for city surveillance cameras to local software. State media company Rossiya Segodnya and Moscow’s regional government switched from Oracle database systems to open-code PostgreSQL software supported by local programmers, according to Digital Russia.