The Group's Software Development segment's primary activity is to undertake complex software development projects for corporate clients, mainly in Western Europe and the US. The Group delivers specific solutions for various industries, including aviation, finance and banking, IT industry and others.
Software Development Segment - Strategy
The main elements of the strategy of the Group in the Software Development segment are
Establish leadership in the premium segment of the market
The Group aims at acquiring deeper and more technical expertise of applications in its target industries in order to offer premium software, thus strengthening its position as high-end software developer and premium IT service provider. The Group intends to focus on time-to-market, exclusivity and know how as key customer propositions. This strategy aims to differentiate the Group from commoditised peer products and allow for high margins. Sector specific expertise will enable the Group to provide more standardised solutions and to be able to deliver projects with greater efficiency. The Group will continue its efforts in scaling demand for full-cycle projects. The Group aims to generate a target 80% of its revenues from existing customers in order to keep high visibility of its earnings while simultaneously generating a target 20% of its revenues from new customers.
Develop high-end expertise across various end markets with lower-value services shared through a global labour pool
As the Group moves up the value chain and high-end sector experience is developed in the Group´s development centers, the Group can create a global labour pool and a shared services pool for lower end jobs. This structure will enable staff to develop highly specialised, niche sector expertise, without being encumbered by lower value tasks.
Streamline global delivery capability
Wage costs in Russia are increasing and the Group can therefore achieve cost savings by outsourcing commodity jobs to low cost delivery centers. The Group aims at moving standard jobs (including back office) to low cost locations, primarily the Ukraine, Romania and Vietnam. In particular, the Group seeks to grow its presence in Vietnam by increasing its headcount from 30 to 100 in the course of 2010. The Group is also looking to open new low cost delivery centers in Latin America and the Asia-Pacific region.
Expand through selective acquisitions
The Group intends to pursue acquisitions of specialised consultancies in key target industries such as financial services, telecom, e-commerce and automotive in Western Europe. The Group will focus on technical consulting, whilst business consulting will be delivered via partnerships with leading Western European business consulting firms. The Group also intends to develop its presence in the United States of America and in the Asia Pacific region.
Expand into new regions
Luxoft provides its services currently mainly to customers in Western-Europe, the U.S. and, to a lesser extent, Russia. There are a number of regions among top locations for offshore services, including the Asia-Pacific and Latin America, where Luxoft so far has no or only marginal market share. Luxoft intends to further exploit growing demand in the Russian market, while establishing its presence in certain of these regions as well as Poland and Belarus. This expansion should allow Luxoft to further increase the flexibility with regard to the spectrum of rates offered to its customers and to solidify the 24-hours execution platform. In this context, the Group is currently establishing two development centers in Singapore and Poland.
Expand into new customer groups
The Group intends to expand its expertise in financial services, telecommunications, automotive, e-commerce and aviation (core verticals) by building out full scale industry practices to offer specialised services and become provider-of-choice in these priority sectors. The Group is endeavouring to significantly increase the number of customers by further increasing the number of industry sectors where it can offer its customers the same level of industry and technology expertise as in its current core verticals. Such other industry sectors include Travel Media and Utilities.
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Software Development Segment - Competitive Difference
The Group believes its key companies are well positioned to capitalise on the expected market growth in the markets in which it operates because of the competitive advantages set out below.
Strong brand name in the worldwide market applicable
Luxoft company, representing Software Development business segment, possesses strong brand in the worldwide software development outsourcing market and enjoys wide customer recognition. Management believes that customers associate Luxoft brand with high quality standards and a commitment to customer service.
To learn more about the Luxoft international recognition please visit: http://www.luxoft.com/about/awards.html
Professional and experienced management team
Luxoft company management team has significant experience in large and complex software development projects. Some of the key managers of the company, in particular Dmitry Loschinin, have been involved in various IT projects of the Group for over ten years and have in-depth experience in the markets in which the Group operates.
To learn more about Luxoft management please visit: http://www.luxoft.com/about/management.html
Established track record with blue chip clients and public institutions
Luxoft clients include such worldwide business leaders as Boeing, Caterpillar, Dell, Deutsche, Bank, IBM, UBS and many others.
Luxoft successfully maintains multi-year and deep cooperation with such a blue chip companies, serving as long-term strategic partner for software development.
To learn more about Luxoft customers please visit: http://www.luxoft.com/clients/
“One-stop shop” capabilities for software development services
Luxoft offers a wide range of software development services for its customers, including
In many cases the company can be a “one-stop shop” for the complex software development projects of leading worldwide companies. This integrated approach enables Luxoft to take advantage of key growth areas of the worldwide software development outsourcing market.
To learn more about Luxoft services please visit: http://www.luxoft.com/services/
Strong expertise in the implementation of complex software development projects
Luxoft has developed strong expertise in complex software development projects. In particular, the company has developed its own proprietary project management tools and has invested heavily in globally distributed developers’ team management quality.
To learn more about Luxoft project management expertise please visit: http://www.luxoft.com/services/engagement_model/
Engineering Excellence
Luxoft is built upon a foundation of engineering excellence. Key Luxoft’s people are engineers. They don’t just code to specifications; they think strategically about the entire lifecycle of a system, its expandability and maintainability. Luxoft exemplifies this engineering approach to solving problems and providing high value services like design and R&D.
To learn more about Luxoft engineering services expertise please visit: http://www.luxoft.com/services/
Industry Domain Expertise
Luxoft possesses deep domain knowledge, which it leverages to build industry-specific solutions. In particular, Luxoft is an acknowledged ITO provider for the financial services and telecommunications sectors, acting as a preferred vendor for these industries’ leading players.
To learn more about industries where Luxoft has the experience please visit: http://www.luxoft.com/industries/
Best-in-class processes
Luxoft is the first company in Europe whose processes achieved the highest industry standard: Level 5 CMMI quality certification. We have invested heavily into developing proprietary tools, which in combination with industry standard enterprise-and product-oriented methodologies, ensure risk-free, effective distributed development.
To learn more about Luxoft’s Quality Management System please visit: http://www.luxoft.com/about/glance/quality.html
Global Delivery capabilities
Luxoft’s global delivery model offers value far beyond labour arbitrage. Luxoft empowers its worldwide clients with synergistic resources, superior people talent, the agility to respond to business and the ability to leverage each location’s unique advantages. Luxoft’s delivery network covers locations in European Union (Romania), Eastern Europe (Russia, Ukraine) and South-eastern Asia (Vietnam).
To learn more about Luxoft’s Global Delivery capabilities please visit: http://www.luxoft.com/about/global_delivery/
Highly skilled workforce
Luxoft has a really highly-skilled and trained workforce. The company benefits from the strong math and science tradition of its base in Russia and Ukraine. The culture of engineering excellence there dates back to the space exploration era. The company has very strong recruitment programs which allow it to attract highly-qualified technology specialists in Russia and the CIS region, and also invests in the ongoing training of its development personnel. With its global reach, Luxoft is ideally positioned to tap into the best talent in Russia, Eastern Europe and South East Asia.
To learn more about Luxoft’s people and talents management please visit: http://www.luxoft.com/about/glance/talent.html
Financial strength and access to capital
The Group’s financial position is sustainable and its cash resources, operating cash flows and borrowing capacity should provide adequate resources to fund its ongoing operating requirements and provide a solid basis for future growth. The Group believes that its size, its credit history and the transparency of its business and financial affairs gives it an advantage over many of its Russian competitors in obtaining necessary financing on time and at competitive rates.