In the wake of Russia’s invasion of Ukraine, the US, European Union (EU), NATO and their allies have slapped economic sanctions on Russia during the past weeks. For Microsoft, Oracle, SAP, Amazon and other tech companies these sanctions means conducting business won’t be as usual in near future.
And this has forced Microsoft, Oracle, SAP, Amazon and other tech companies to suspend their operations and new business in Russia. The decision is likely to impact their business in Russian Federation, but at the same time will help to build more pressure on Russia.
Microsoft, Oracle and SAP this week have decided to suspend their business operation and sales in Russia. Microsoft has said that it will suspend all new sales of its products and services in Russia.
“We are announcing today that we will suspend all new sales of Microsoft products and services in Russia,” Brad Smith – President and Vice Chair said in a blog post on Thursday.
“In addition, we are coordinating closely and working in lockstep with the governments of the United States, the European Union and the United Kingdom, and we are stopping many aspects of our business in Russia in compliance with governmental sanctions decisions,” added Smith.
As far as Microsoft’s business in Ukraine and Russia is concerned, it has employees from both sides working in local offices as well as in the US. However, the company hasn’t disclosed the number of employees it has in both countries,
While there’s little information available about Microsoft’s business in Russian Federation. TAdisver reported that the local entity Microsoft Rus LCC and Microsoft Development Centre Rus LCC’s revenue totalled 6,943 million rubles in 2020, a fall of 5.7% compared to 2019. It has signed pacts with MTS in 2020 and SAP in 2021 for the development of cloud technologies in Russia.
Before Microsoft, Oracle and SAP already had suspended all operations in Russia. Both Oracle and SAP have expressed their solidarity towards the Ukraine government and nationals as part of their decision to shut operations and stand against the Kremlin’s military attack on Ukraine.
The move also comes, after Mykhailo Fedorov, Vice Prime Minister and Minister of Digital Transformation of Ukraine wrote a letter to California County Governor Gavin Newsom.
Since most of the global tech companies are headquartered in California, Fedorov in his letter urged them to support and implement measures that would inflict significant “technological hardships” on Russia and stop the war and disinformation.
In reply to Fedorov’s letter which he posted on Twitter, Oracle tweeted that it has already suspended all operations in the Russian Federation.
“On behalf of Oracle’s 150,000 employees around the world and in support of both the elected government of Ukraine and for the people of Ukraine, Oracle Corporation has already suspended all operations in the Russian Federation,” Oracle tweeted on Wednesday.
While SAP CEO Christian Klein expressed his strong support to economic sanctions against Russia and added that his company is pausing all sales of SAP services and products in Russia.
“Economic sanctions against Russia are an important mechanism in the efforts to restore peace. We are in constant exchange with governments around the world, have every confidence in their guidance, and fully support the actions taken so far,” Klein said in a blog post mid this week.
“We are stopping business in Russia aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia,” Klein added.
Further, “We will continue to serve our existing customers within the scope of our contractual commitments and as far as sanctions and export control restrictions permit, but we will not accept new orders or solicit new business,” informed Klein. The German enterprise software operates in Russia under the local division SAP CIS.
Like Microsoft, SAP has its R&D unit SAP Labs located in the Russian capital Moscow along with local representative offices. In addition, it has a presence in the Czech Republic, Slovakia and Poland.
Besides, Microsoft, Oracle and SAP suspending their business and operations in Russia, Amazon Games – the gaming division of Amazon has gone ahead to stop the Russian localisation of its game New World.
Finnish telecom equipment maker Nokia, which has a manufacturing facility in Ukraine has said that it would stop deliveries to Russia to comply with sanctions imposed. Russia’s major telcos including MTS, Vimpelcom, Megafon and Tele2 use and rely on Nokia’s equipment supplies.
Further, Polycom – the audio-video conferencing solutions provider along with Cisco has joined the big tech companies in suspending their operations in Russia. Polycom has said that it has suspended operations in Russia and Belarus.
Experts believe that impact of tech and software companies’ suspension of operations and new sales along with economic sanctions is likely to put Russia under pressure. Along will force the former Soviet Republic to stop the military action against Ukraine.
Till the war ends and the situation returns to normalcy, for Microsoft, Oracle, SAP and others doing business in Russia won’t be usual.