Head of Gecad: Financial crisis will lead to snowballing collapses in Romanian IT industry

Romanian companies will face major problems if they will not acknowledge the real magnitude of the crisis, as most of their clients are companies that have already collapsed or that have dramatically cut development budgets, and outsourcing companies will be the first “casualties”.

“The first IT companies that failed are those in outsourcing field, because most of their clients are foreign companies that collapsed or cut their business. Outsourcing companies are small, and don’t have the ability to overcome a two-year crisis,” Radu Georgescu added.

According to him, Gecad is able to overcome two-year crisis, whereas, outsourcing companies are most likely to fall, especially those with one client.

“We are witnessing a global crisis, but in Romania, it will be worse, however, Gecad group will be damaged at a lower extent, because we have good sales volume abroad”, Radu Georgescu pointed out, one of the first Romanian entrepreneurs with profitable business in America by selling RAV antivirus patent to Microsoft.

“Romanian companies that consider we live in a glass ball in Romania and that local market will not be affected by the crisis, refusing to adopt any safety measures, will be dramatically hit. We will see many bankruptcies in the following period,” Georgescu stated.

Domestic IT market is likely to drop 20-30%, according to Georgescu’s forecasts, although is should have been a major growth in a normal economic context.

“The market will plunge, because in crisis context, IT is among the first budget that a company cuts. If the companies face fund shortage for IT, software providers will have no more clients”, said Radu Georgescu.

Gecad reassesses sales focus and recruits staff in Asia

Gecad redirected sale focus to China, Russia Japan and Middle East in the context of financial crisis and recruits staff in Russia and China.

“We redirected focus of sales from very affected countries to less affected states, even if we have an office in US, which we intend to keep. As the devastating wave passes by, the affected areas will recover. At this moment there is a serious situation in USA, in Europe as well, but in China is there is no problem,” said Georgescu.

At this point, the company is recruiting staff in Russia and China, and Axigen’s focus, electronic mail solution patented by Gecad was off-shored to Middle East, China and Japan, following that in half year to come back in Western Europe and USA.

“We will keep our office in United States and we will recruit staff in China and Russia, in areas less affected by the grim situation, and I mention Avangate,” Georgescu concluded.

Translated and adapted by Camelia Oancea.