Luxoft (NYSE:LXFT) is a global IT service provider of innovative technology solutions that delivers measurable business outcomes to multinational companies. Its offerings encompass strategic consulting, custom software development services, and digital solution engineering. Luxoft enables companies to compete by leveraging its multi-industry expertise in the financial services, automotive, communications, and healthcare & life sciences sectors. Its managed delivery model is underpinned by a highly-educated workforce, allowing the Company to continuously innovate upwards on the technology stack to meet evolving digital challenges. Luxoft has more than 13,000 employees across 42 offices in 21 countries in North America, Mexico, Western and Eastern Europe, Asia Pacific, and South Africa. Luxoft is incorporated in Tortola, British Virgin Islands, has its operating headquarters office in Zug, Switzerland and is listed on the New York Stock Exchange.
Aleksey Rubtsov, Managing Director at Luxoft Bulgaria tells us what makes Sofia a place to launch and develop a successful business.
Please tell us briefly about your investments in Sofia? What does your company do in Bulgaria and outside?
The Luxoft development center in Bulgaria was opened in February 2014 and to this date operates with approximate 300 IT specialists in Sofia office. Currently, the company business operations are focused on automotive software development and some line of businesses as banking and enterprise. The company is actively looking to scale their business and further expand on the local market.
What motivated you to invest in Sofia?
Demand for Luxoft’s engineering services and domain expertise are steadily increasing. Thus, the current pipeline has prompted us to expand our core presence in Central and Eastern Europe and to continue growing our global delivery model. Bulgaria is well known for its good technical education and it always was the center of IT of Eastern Europe. That among other, infrastructural benefits has attracted us to open a development center in Sofia. Accessibility in wide terms and developed talent pool convinced us that Bulgaria is a very good fit to Luxoft family and Sofia, in particular, has both great infrastructure and wealth of technical talent.
Are there other local and foreign companies here doing business in your sector?
Yes, plenty of companies those provide similar service to a wide range of clients all over the world.
What are the advantages of investing in Sofia?
Developed and cost-efficient infrastructure
What sort of difficulties have you faced so far?
Our business is all about talents and having competitive market we would expect more convenient and fast ways of bringing specialists from abroad for faster ramp-up.
How do you estimate the overall business climate in Sofia today?
In the IT industry it is healthy and in reality, very similar to comparable Eastern European locations.
Judging from your business experience, do you think that local and foreign investors see our capital as a more or less homogeneous business area, or are there still a lot of hurdles?
My own impression is that it is perceived as a good location for business, and generally speaking the only obstacle we had was rather more general inability of faster movement of workforce when it’s required. Poland is much more convenient in this regard.
What would you point out specifically in terms of business climate improvement for investors who are already operating in Sofia?
Looking back to 2014 when we established Luxoft operations in Sofia currently major part of business climate indicators are improved. The growth of direct investments in IT influenced each IT company. It became visible that the quality of engineers and developers is improved due to the government support in the educational system and emerging various centers for IT trainings. Internet and connectivity infrastructure had been improved together with the opportunities for shared economy services. Currently, there is Sofia Tech Park project influence on the overall status of IT life in the city.
What needs to be improved in order to increase the number of new investors both from Bulgaria and abroad?
Infrastructure is always worth investment, as demand is growing and will grow. It goes first. Focus on educating and nurturing the talents is really important for IT specifically. Also, it would be really good to have an option to ease a start with bringing workforce from abroad to ramp down business faster and then switch to local market. The later would shorten return on investment period and would allow more external investment to education of local workforce.
How much does the investment climate in Bulgaria stand out in comparison with progress made in other countries in the region?
As I’ve already mentioned the situation is comparable to Poland and it’s similar to Romania with exception of smaller talent pool. From taxation and general cost of business, Bulgaria and Sofia particularly are more attractive than most of the locations we present.
When you look at Sofia and the country as a whole, as a Bulgarian investor, what attracts or surprises you most?
The level of English, availability of different kinds of service and the cost of it was a pleasant surprise.
How do you feel about Sofia and Bulgaria as a place to live – transportation, food, travel, prices, education, medical services?
Despite growing park of cars, Sofia is still far more convenient city to drive, who likes it that way. Public transportation is developed enough but you need to think about it when you select the place to live. Taxis solves the gaps, as the service is really cheap enough to use it more frequently. The city is really green, and you always can find the place to relax after work or during weekends. There are plenty of events all around the year, many of such are far more accessible than in really big cities like Moscow and in smaller cities like Wroclaw in Poland. I consider Sofia a nice place big enough to have all the things you want and not that big to feel yourself lost. The prices are obviously lower than in other countries even if we would compare Sofia with much smaller locations. The food is great from very simple and traditional and amazing in its directness to gourmet offerings with really reasonable pricing.
Medical services are accessible and more than adequate for pricetag.
Name your top 5 favorite things in Sofia?
Yuzhen Park, Small streets in the Center, tiny cozy cafés with decent coffee and great pastry, Opera theater, you can see Vitosha from anywhere and it calms me down.