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Investing.com -- Developing a domestic substitute for the business software provided by Germany’s SAP is difficult and costly but has to be done, said Russian steel tycoon Alexey Mordashov at a recent technology conference. An alternative platform is essential for the survival of Russian businesses, Mordashov emphasized.

SAP, which became Europe’s most valuable company last year, is best known for its business management software that aims to ease all aspects of operations, including marketing, human resources, logistics, and procurement. The company has been serving some of Russia’s largest firms, such as airline carrier Aeroflot and Russian Railways. However, SAP gradually scaled back its operations due to the Russian invasion of Ukraine in 2022 before fully ceasing operations in March 2024.

Steelmaker Severstal, owned by Mordashov, and petrochemical company Sibur have collaborated in an attempt to create an alternative to SAP’s software. Despite significant efforts over the past year, the project has proven more complex and costly than anticipated, and still requires significant further refinement, as Mordashov explained.

Before the war in Ukraine, SAP boasted an over 60% market share in Russia. The remainder was largely split between Microsoft (NASDAQ:MSFT) and Oracle (NYSE:ORCL). At present, many Russian firms continue to use pre-installed SAP software, but without access to updates and support from the German company, the systems cannot be properly maintained and are susceptible to failures.

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