Oracle scores major Russian ERP deal

Oracle is supplying its E-Business Suite to Russia's giant telecommunications company Svyazinvest in a contract that could be the...

Oracle is supplying its E-Business Suite to Russia's giant telecommunications company Svyazinvest in a contract that could be the largest IT deal in Russian history.

Svyazinvest chose Oracle to supply ERP system software that will be installed throughout the company, but did not disclose the value of the deal.

Leading Russian business newspaper Vedomosti reported that the contract is worth $153m (£93m). That would far surpass the previous record-holder for a Russian IT deal, a $100m (£61m) systems integration contract signed between Russia's largest oil company Yukos and Microsoft in 2000.

Oracle refused to comment on the deal.

A subsidiary of major Russian systems integrator Open Technologies will install the ERP system throughout Svyazinvest's corporate structure and will provide technical support. A full range of ERP services will be installed.

Considering Svyazinvest's vast corporate structure, the $153m sum sounds reasonable, said Yevgeny Golosnoi, a telecoms analyst with Troika Dialog.

He also said he expects such deals will become more common among large Russian corporations, which have often been criticised for inefficiencies.

"Many major Russian companies will be looking for these kinds of solutions," Golosnoi said. "They are reaching the stage where they have to improve their business internally - in terms of the flow of information, management, communications - in order to be competitive."

Svyazinvest, Russia's state-controlled national fixed-line telephone operator, is in the midst of a major reorganisation that has already seen it consolidate more than 70 regional companies into seven regional telecoms providers. The boards of directors of five of the seven telecoms firms have already approved the deal.

Michael Mainville writes for IDG news service

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