Billionaire Alexey Mordashov Proposes Russian Consortium to Develop Alternative to SAP Amid Ukraine Conflict Fallout

Billionaire Alexey Mordashov has put forward a proposal to establish a Russian consortium aimed at investing billions of dollars in developing an alternative to the popular business software offered by Germany’s SAP. This initiative comes after SAP announced its plans to withdraw from Russia in April 2022, gradually winding down operations following Moscow’s deployment of troops to Ukraine in February of the same year.

Mordashov, who is the largest shareholder of Russian steelmaker Severstal, highlighted the necessity for Russia to find an alternative to SAP's software, which is extensively used by businesses for various functions including marketing, human resources, logistics, and procurement. He emphasized the importance of developing a system that can cater to the needs of demanding industrial customers and serve as a replacement for SAP's functionality.

Severstal, along with petrochemicals firm Sibur, is reportedly working on developing solutions that could rival SAP's offerings within a five-year timeframe. However, Mordashov suggested that tackling this challenge may require the collaboration of a consortium comprising large Russian companies due to the substantial investment needed.

Mordashov stated, "We understand that we are talking about sums around billions of dollars that we will need over these five years to create an analogue of SAP," particularly referring to SAP's ERP enterprise resource planning software. He emphasized the urgency of finding an alternative, citing concerns about SAP becoming outdated and the inability to perform necessary updates, particularly in cybersecurity, due to being cut off from the vendor.

In response, a spokesperson for SAP clarified the company's stance, stating that SAP had fully supported and implemented coordinated inter-governmental sanctions against Russia in light of the Ukraine conflict. The spokesperson further noted that as of March 20, 2024, all remaining services to Russian customers and partners had been terminated in alignment with the 12th package of EU sanctions. However, a small wind-down team continues to address remaining legal and contractual obligations.

By fLEXI tEAM