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Transneft Increases Procurement of Russian Software by 270 Times

Date of publication: 25 October 2021

In 2020 Transneft purchased RUB 3.55-billion-worth of Russia-made software, whereas in 2021 the share of acquired domestic solutions and related services exceeded 50% of the total thematic budget. Meanwhile, more recently, the Centre of Import Substitution Competences in ICT, headed by former Deputy Minister of Communications Ilya Massukh, banned Transneft from a major purchase of Microsoft software, rationalising its stance by the complaint of the Ministry for Digital Development and Communications that the Company refuses to use domestic software.

Domestic Software Used by Transneft

As CNews found out, the national petroleum products pipeline transportation giant Transneft dramatically increased its purchases of Russian software in 2020. Thus, while the Company's 2019 report stated that it had purchased domestic software worth RUB 13.2 million, the 2020 report stated similar costs equal RUB 3.55 billion or 270 times more.

A Transneft spokesman explained to CNews that it is still not entirely accurate or correct to compare the figures cited. Procurement by Transneft subsidiaries was not taken into account in 2019. The Company does not have specific data on the exact amount of domestic software purchased that year.

Yet Transneft has no doubt that the increase in procurement of Russian software in 2020 compared to 2019 (with all subsidiaries taken into account) was rather substantial.

“A significant increase in the share of domestic software purchases in 2020 is due to a number of initiatives relaunched as well as to centralisation of the Company's procurement reporting to include all entities of the Transneft system,” notes the Company's spokesperson. “In 2020, the Company and its subsidiaries made purchases of domestic software from manufacturers such as Abby, NIS GLONASS, Galaktika, InfoWatch, Positive Technologies, etc.”

This process is currently going on, according to our source. “A major contract with a domestic manufacturer of enterprise management systems is planned for 2021 to create a corporate integrated management information system for Transneft and its subsidiaries  - Procurement of domestic software and related services from manufacturers such as Prognoz, Mail.ru, Kaspersky, Positive Technologies and others has also been completed.”

We were assured that Transneft puts “constant and daily” effort in reviewing and testing domestic hardware and software, purchasing a significant amount of domestic software and services (more than 50 per cent of its total procurement in 2021).

This data is indirectly confirmed in Transneft's public annual report for 2020. As CNews wrote in mid-September 2021, it states that the Company has tested domestic operating systems for servers and workstations during the reporting period. In particular, two types of Astra Linux Common Edition, two types of Alt Linux and two types of ROSA Enterprise Linux are mentioned. The report does not include the conclusions of the expert evaluation, though.

It should also be noted that in September 2021, CNews discovered Transneft's first full-scale purchase of the Russian operating system Red OS, given that the state-owned company began showing interest in this software back in 2019.

The Massukh Centre Found No Evidence of Transneft Using Russian Software

The said data notwithstanding, in mid-October 2021 Transneft found itself in the crosshairs over the insufficient pace of software import substitution.

The Ministry for Digital Development and Communications banned Transneft from buying RUB 600-million-worth software from Microsoft. As Kommersant once wrote, that ban was a response to the complaint by the Centre of Competences for Import Substitution in Information and Communication Technologies (CCICT) at Transneft's policies. This organisation is headed by former Deputy Minister of Communications Ilya Massukh.

Transneft does not use domestic software at all, while according to the plan agreed by the CCICT in 2019, the Company was to implement 30% to 80% of domestic software in 2021, depending on its category, the CCICT claimed in a letter to the Ministry for Digital Development and Communications.

Transneft Has Reached Out to the Industry

Transneft told CNews that it held a meeting with representatives of the software industry on 22 October 2021. The top management of the Domestic Soft Association of Software Product Developers (ASPD), InfoWatch, Basalt SPO, Astra Linux, Red Soft, Rosa, Rosplatform, BellSoft, Cyberprotect, CommuniGate Systems, Moyofis, TrueConf, Naumen, Open Mobile Platform, Postgres Professional and others were in attendance.

It was stated at the meeting that a major deterrent to the implementation of domestic software and hardware is the lack of systematic work on their compatibility, both between different types of software and software-hardware coupling.

“Unfortunately, this work is not properly arranged by respective federal regulators,” reads the Company’s statement. “On their part, regulators monitor mostly the percentage shares for certain types of software and hardware without giving proper heed to the real situation in different industries, performance requirements and functional parameters.”

The meeting’s participants agreed to organise the ongoing joint effort of Transneft and the Association, aimed at further testing of solutions and adaptation of domestic solutions to the needs of Transneft, the state Corporation informs.

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