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Challenges for IT providers as Ukraine crisis worsens

Many IT providers have ceased sales to Russia, but cloud services can operate and be delivered anywhere, helping – indirectly – to fund the invasion

This article can also be found in the Premium Editorial Download: Computer Weekly: How the tech sector is supporting Ukraine

As Computer Weekly’s sister publication, SearchCIO, recently reported, Google, Apple, Microsoft, Oracle, Dell, IBM and Meta are among 29 major IT firms announcing changes to their business plans in Russia. There are a few new notable exceptions, one of which is software-as-a-service (SaaS) giant Salesforce, which has now begun “exiting” from some of its Russian reseller relationships. And although Amazon Web Services (AWS) does not have a cloud region in Russia, business users can buy direct and its services are also available through multicloud service providers such as Fujitsu.

There are also numerous news reports of major brands stopping sales in Russia, and those that have yet to suspend sales, risk reputational damage. According to the BBC’s Radio 4 Today programme, both McDonald’s and Coca-Cola have seen their share prices plummet. Both have complex organisational structures, which limit their ability to switch off Russian operations.

Now Salesforce has said it will donate $2m to support humanitarian efforts to help the Ukrainian people. Several Salesforce customers have commented on a post on its Ideaexchange blogging platform, calling for the Salesforce SaaS to be suspended in Russia. In one comment, a Salesforce customer said: “Most people cannot understand that there are two ways to stop the war – completely cut off the aggressor’s economy, all paths of development and stop his desire to destroy, or... There are no other options, another option is World War III. What will you choose? This is not the war of Ukraine, this is the war of the whole civilised world, if you ignore the events today and do nothing – then the war will come to you tomorrow. Think.”

Another, calling for Salesforce to suspend its service, wrote: “Don’t be like this. Stand with Ukraine!”

Another asked Salesforce to consider turning off the service as a moral duty: “It is not even politics, it is about morals. Russian troops consciously kill [civilians] – stop supporting them.”

In a statement announcing its donation, Salesforce said: “We are heartbroken by the violence and loss of life due to the invasion of Ukraine. We stand in solidarity with the Ukrainian people and we are hopeful for an expedient path to peace.”

In the statement, it said it did not have offices or employees in the region, but was supporting its employees who have loved ones there. “Our hearts go out to the people of Ukraine, their loved ones, and all of those affected,” it said. “We do not have a material business in Russia. Through resellers and other channels, we have a very small number of Russia-based customers, and we began exiting those relationships last week.

“Salesforce and our employees are donating an initial $2m to non-profit relief organisations working to help people in Ukraine and those who are being displaced. And we are accelerating our work to address the humanitarian crisis.”

IBM CEO Arvind Krishna said: “We have suspended all business in Russia.” He added that the company has also developed and deployed IBMer Resource Finder Map, which connects Ukrainian IBM staff and contractors fleeing their country with IBM colleagues in the immediate Central and Eastern Europe (CEE) region who can offer assistance, including lodging, transportation, food and supplies, for them and their families.

“It is heartening to see that hundreds of CEE employees have already signed on as volunteers in less than 24 hours,” said Krishna.

Read more about the Ukraine crisis

Last week, Accenture said it was discontinuing its business in Russia. In a statement on its website, the company said: “We thank our nearly 2,300 colleagues in Russia for their dedication and service to Accenture over the years. We will be providing support to our Russian colleagues. While Accenture does not have a business in Ukraine, we will continue our efforts to help our Ukrainian colleagues working around the globe at Accenture.”

The difficulty facing some leading IT service providers is that they have developed strategic partnerships and run major operations out of Russia. Deutsche Telekom IT Solutions is one of the major IT companies in Russia, with more than 2,000 employees, operating in Voronezh, Moscow and St Petersburg. Last week, parent company Deutsche Telekom announced that it was helping aid organisations to set up call centres to advise refugees on all issues.

This is currently being done in Hamburg and Cologne. The company said it is also providing free SIM cards with unlimited data volume and unlimited telephony via official aid organisations in coordination with the Federal Office for Migration and Refugee.

Atos also has a significant footprint in the region. In 2019, the Peri international users support project became one of the largest Atos projects in Russia, providing service in Russian, English and German, to support 7,000 users globally. A few years earlier, Infosys established centres of excellence in Russia to support its customer, Ansaldo Energia, which sells plant engineering, manufacturing and service to energy providers.

Meanwhile, Fujitsu, which provides multicloud services, including AWS to Russian businesses, said it was donating $1m to UNHCR, the UN refugees agency, “to provide urgently needed humanitarian support for the many people displaced by the ongoing crisis in Ukraine and countries in the surrounding region”.

AWS said it has been working closely with Ukrainian customers and partners to keep their applications secure. Although it operates no datacentres in Russia, its biggest Russian customers are companies that are headquartered outside the country.

For its Russian customers buying direct, the company’s tax help page for Russia shows that given that AWS Europe is based in Luxembourg, it is required to collect VAT. On the web page, AWS said all VAT collected from customers in Russia would be paid to the Federal Tax Service of Russia.

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