OREANDA-NEWS. In 2013, CROC's revenue reached RUB27.095 billion-a year-on-year drop of 19.7%. Overall, CROC's performance reflects the general market drop in revenue from the pure supply of hardware and licenses and increasing demand for cloud technology, business intelligence, logistics management, industrial and engineering solutions, smart media and data transfer systems, and IT outsourcing.

CROC completed approximately 2,050 projects in 2013-including 200 sizable implementations worth over USD 1 million each-for approximately 900 customers such as financial and credit institutions, retailers, telecom providers, government organizations, transportation and logistics enterprises, and energy and manufacturing companies. CROC has 2,150 full-time employees with over 4,400 professional certifications (almost 860 new certificates were acquired during the year).

“While it was not an easy year for CROC, we are still one of the top 10 IT companies in Russia and the revenue share of IT services has increased by 5.5% over the year to reach almost 60%. In addition to our traditional lines of business, we are also actively developing new areas such as cloud services, 3D technology, robotics, smart city and sport site solutions,” said Boris Bobrovnikov, Director General, CROC.

Computing systems accounted for 27.8% of CROC's revenue in 2013 (vs. 33.5% in 2012), with customers continuing to invest in business continuity, reliable data backup and guaranteed storage availability. Indeed, the revenue share of data center outsourcing increased over 1.5 times to reach 58.5%. CROC's Kompressor Data Center received Tier III Facility compliance certification and CROC became the first and only Russian systems integrator with such a high level of availability certification. CROC leased capacity in its three data centers to major Russian banks, retail chains, insurance companies, government organizations and other entities and even built a mobile data center for United Aircraft Corporation. This was our first implementation of this kind and one of approximately only 10 other similar projects completed in Russia.

Revenue from cloud services increased almost four times over the year. For example, a network monitoring system deployed in CROC's cloud for Mondelez Rus (formerly Kraft Foods Rus) covered dozens of cities, cut network infrastructure management costs by 60% and significantly reduced business losses caused by communication channel downtime. In addition, for Tavros Management Company, a startup, infrastructure migration into CROC's Virtual Data Center took just five days.

CROC remains the most qualified cloud provider in Russia. In 2013 CROC became the first Russian company authorized as a Red Hat Cloud Certified Provider and was also awarded with EMC Cloud Builder Practice and HP Cloud Center of Excellence status. In addition, CROC holds the Cisco Master Cloud Builder specialization, Microsoft Gold Partner in Management and Virtualization, Citrix Cloud Advisor Partner, VMware Enterprise Service Provider - vCloud Powered, Oracle Business Process Outsourcing Provider, and EMC Service Provider certification.

In 2013, CROC added a Contact Center as a Service (CCaaS) solution to its SaaS portfolio. A pilot project for 100 agents in a major telecom company demonstrated that CCaaS enables significant contact center TCO reduction. New SaaS services also include cloud-based business intelligence as a service, comprehensive outsourcing of information security systems (SecaaS) and the most complete backup offering (DRaaS) in the market.

Business intelligence practice revenue increased by 26.7% over the year, with large companies continuing to focus on improving business efficiency, manageability and business process optimization. In particular, CROC developed and deployed a unified consolidated reporting system covering four branches of a large aviation holding with over 26,000 employees. In addition, a unified automobile road construction and reconstruction monitoring system was deployed for the Federal Road Agency (RosAutoDor) and enabled online visual control of each site. With 35 customer business units connected, the system simplifies and accelerates government contract reporting and maximizes construction process transparency. In 2013, CROC completed its first Big Data projects, which already account for 1% of revenue. For example, the implementation of SAP BW via a SAP HANA system within M.video facilitated corporate reporting and increased the efficiency of calculations regarding demand for goods. In addition, a new approach to analytical data processing accelerated reporting in a major insurance company while a pilot project enabled a major telecom carrier to reveal churn-inclined subscribers and it is estimated that a future analytic system would allow the company to save several million dollars and reduce information unit storage costs 15-20 times.

Logistics chains, sales and marketing activity management revenue grew by 65.8% in 2013. During the year, Russian retailers and manufacturers continued to improve transportation and sales manageability. In particular, CROC deployed an OTM-based transportation and logistics management system in a large retail chain and created a unified information environment for 400 suppliers and 50 transportation partners. Via the system, the customer dispatches approximately 200 trucks and arranges 6,000 trips per month.

CROC's industrial solutions practice recorded a 36.4% increase in revenue in 2013. Oil and gas enterprises and energy companies still show strong demand for smart power metering systems (partly due to the need to upgrade outdated systems), automated process control systems, technical maintenance, repairs, and logistics support. For example, CROC recently upgraded a unified oil-trunk pipeline management system as part of the 'East Siberia - Pacific Ocean' pipeline system expansion for the Vostoknefteprovod enterprise (a subsidiary of JSC Transneft).

The revenue share of the telecommunications sector increased from 18% in 2012 up to more than 20% in 2013. In particular, the implementation of an automated dialing system in OTP Bank's call center contributed to a 15-20% increase in the redemption of overdue credits receivable.

Data transfer segment revenue increased by 17% in 2013, with revenue generated by the new network optimization and control segment more than doubling over the year. The list of completed projects includes a unified secured multi-service network (enabling internet, telephony and video conferencing) for 83 branches of the Federal Antimonopoly Service of Russia.

Revenue from smart media systems increased over 1.5 times (by 55%) in 2013. These solutions increase the efficiency of hotel room utilization, improve the quality of events and communications, aid the provision of information and navigation experience in crowded areas and are also used as marketing and HR tools. For example, the World Trade Center in Moscow is now supporting business operations via the use of an AV system comprising 250 displays, panels, interactive kiosks and screens while an interactive video wall at the central entrance to the Manege Central Exhibition Hall in Moscow informs visitors of all events. In addition, the Korston Hotel in Moscow invested over USD 2 million in an automated complex of lighting, video and audio systems installed in eight halls in order to support business events of any kind. Also, for one of the top 10 insurance companies, CROC equipped meeting rooms with advanced video equipment and created a unified internal communication system that enabled video conferencing, IP telephony and unified communications.

CROC's participation in the deployment of a Unified Medical Information and Analytical System (UMIAS) in Moscow was a landmark project in the infrastructure software solutions segment (17% of CROC's revenue) in 2013. The project involved the deployment of software IT infrastructure to support over 500 medical institutions, the implementation of a range of healthcare services, the population of the system with source data and the training of 18,000 medical professionals. In addition, the completion of another infrastructure project for the deployment of application management software allowed ZAO Gazprom Mezhregiongaz Saint Petersburg to reduce resource consumption at a gas dispatch control and metering system and significantly mitigate the risk associated with the possible downtime of this business-critical application.

In 2013, the revenue share of the security segment increased 2.6%. CROC continues to strengthen its competence in network and physical security, Data Loss Prevention (DLP) technology based on content analysis, Information Rights Management (IRM), antifraud technology (identification of suspicious/fraudulent transactions), and DDoS attack prevention. In addition, CROC provides information security consulting services, including those related to compliance with the federal 'On National Payment System' law. For example, the implementation of an automated system for managing operational risks and incidents (personnel mistakes, failures, fraud events, etc.) in one bank resulted in a 20% risk reduction. Also, a pilot project in another large bank revealed the root causes of application vulnerabilities and reduced troubleshooting costs.

Engineering systems revenue increased by 32% (YOY) in 2013, with the segment's revenue share rising from 5% to 6.2%. Engineering infrastructure was implemented at sites built for the Sochi Olympic Games and sites being constructed as part of the Federal Target Program of the Ministry of Sport of the Russian Federation. In addition, CROC participated in engineering system installation in the lower Olympic village, multimedia solution deployment in three Rosa Khutor hotels as well as Sochi airport, and the design of engineering infrastructure for the still to be constructed CSKA stadium. During the year, CROC also deployed engineering infrastructure for data centers and the buildings of several major retailers, banks and production companies.

In 2013, the technical support and IT outsourcing segment accounted for 18.4% of CROC's revenue (vs. 18% in 2012). Revenue generated by engineering system maintenance services and application technical support outsourcing services increased by more than 20% while telecommunication equipment maintenance services revenue also grew. The project portfolio includes technical support of BAT Russia enterprise IT systems in two offices, two factories and more than 100 regional branches. This is one of the largest IT outsourcing contracts in Europe in terms of the scope of service provided.

In 2013, cooperation with vendors was fostered and developed even more actively. More than 40 partnership agreements were executed with new vendors in 2013, including global leaders in visual solutions (Christie Digital), 3D technology (EON Reality), enterprise social networks (Jive), digital forensics and cybersecurity solutions (AccessData), etc. CROC won over 20 awards from vendors, including Avaya Platinum Partner of the Year in 2013, Dell Russia-Partner of the Year in 2013, VMware Best Multi-Industry Integrator Partner of the Year in 2013, HP's award For the Promotion of Cloud Building and IT Infrastructure Management Software in 2013, EMC Partner of the Year in EMEA for 2012, etc.

“Last year, CROC opened Russia's first HP and Hitachi solution centers, which became our new competence centers, and in 2014 we will continue to focus on helping customers make better investment decisions. Another hallmark of last year was the development of a packaged service offering that enabled every customer to track the status of all service-related projects in a personal virtual room and contact a dedicated service manager if necessary. Overall, we anticipate even greater demand for IT outsourcing in 2014,” said Veronika Taraba, Deputy Director General, CROC.