Russian IT-firm says expansion into Estonia not worth wasting the effort, money, time

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Promises by state not kept. Unexpected difficulties in finding competent staff locally. Unwillingness of foreigners to come work in Estonia. For these reasons, says a major Russian IT group with international reach, have they backed out of vast investments into Estonia.

The beginning in 2014 looked promising. The international enterprise owned by Russians and specialising in data protection said it would establish in Estonia its second development centre to employ 100–150 engineers. Founders of Acronis Sergei Beloussov and Stanislav visited Estonia and gave optimistic interviews.

For several years, Estonia has lobbied hard to bring in international IT companies. The foundation Enterprise Estonia (EAS) has been hyperactive seeking such from the very Russia. «We have about six-seven suck enterprises on the so-called waiting list right now. Of these, Acronis is perhaps the first of whom we expect definite steps establishing development centres in Estonia,» EAS foreign representative in Russia Jaan Heinsoo said a year ago.

Even so, at the end of last year it surfaced that the plans of Acronis, one with five million clients on 90 nations, were coming apart in Estonia though the company would initially not comment.

Now, an official representative of Acronis agreed to confirm that the Estonian plans are deleted, and to tell us why.

«By today, all the staff of Acronis who earlier moved to Estonia have returned to Russia,» the company’s communication director Katja Turtseva told Postimees a week ago.

The troublesome border check

Ms Turtseva pointed out four reasons why Acronis gave up expansion into Estonia.

«Regrettably, some key workers of ours began to be checked for a very long tome at every entry into Estonia. The financial help promised us for the opening of the development centre never came. We failed to find sufficient amounts of potential staff for our R&D among local specialists, but the Europeans were not optimistic enough to move to Estonia,» listed Ms Turtseva.

Acronis says they had an agreement with EAS that as they open the development centre, Estonian state would support them with half a million euros. A year ago, Acronis Estonia OÜ did file EAS an official application towards that. «EAS also sent us an official confirmation that the application had been processed and that the committee was positive towards it meaning the financial support would be sent in near future,» said Ms Turtseva. «Regrettably, that was all we heard of it and the support never came.»

EAS chief Hanno Tomberg denied they had promised definite support to Acronis. «With Acronis, the processing of the support was rather long and as we did not see the enterprise could achieve its aims in such a short time, we did not send the support,» explained Mr Tomberg.

Regarding the staff problems, of the 100 initially planned as sufficient to open the centre, only 20 were supposed to come from Russia. Acronis planned to hire 40 in Estonia, and as many from other places in the world.

By several Russian businessmen, Postimees has been told about the highly detailed and time-consuming approach to Russian business travellers by Estonia border guard. Even relatively large investments into Estonia fail to spare them the thorough check every time they enter the country. At least in words, many say they have thus come to regret they invested into Estonia.  

Hanno Tomberg said EAS was aware of the incidents on the border related to employees of Acronis, but was unable to comment. «For the answer, you must ask the agencies involved,» he said.

The Acronis communication director said it was only in words that their investments into Estonia were heartily supported, while in practice they never found much support or understanding in Estonia.

«For Acronis, the experience was not especially terrible perhaps, but neither was it pleasing enough to continue wasting the effort, time and money (in Estonia),» said Ms Turtseva.

Mr Tomberg assured us the EAS did all in its power for Acronis to bring its software development centre into Estonia. «We saw in Acronis a vital investment for Estonia. We were helping towards the employees of Acronis moving here would get the needed residence permits. On top of that, the Estonian IT-community helped along to bring Acronis into Estonia,» said Mr Tomberg.

Singapore chosen instead

Still, all told, the development centre envisioned for Estonia will be established by Acronis in Singapore where it also has its headquarters. According to Ms Turtseva, they were drawn there by tangible support by authorities, a friendly attitude, the good educational system and the presence of world-leading universities.

Ms Turtseva said Acronis had intended to invest €10m to €20m a year into Estonia, during three years. In the Estonian context, this is a large investment that has now left for Singapore for good.

To the backdrop of Acronis backing out of Estonia, EAS hastened to underline that the other IT company of Sergei Beloussov named Parallels, one which invested into Estonia during the same period of time as Acronis, is successfully operating a software development centre in Ülemiste City, Tallinn. Parallels is a leading IT firm in the world when it comes to cloud technology.

Recently in the magazine Kommersant-Dengi, Parallels vice president Nikolai Dobrovolski praised the conditions in Tallinn. «For us, Tallinn is first and foremost an access to specialists rare for Russia with years of experience in creating global products. The best specialists are willing to move into Tallinn, but not into Moscow,» said Mr Dobrovolski, in contrast to the Acronis representative.