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Why Sofia? with Stanislav Protassov, Co-Founder at Acronis 

 

In 2018, Acronis opened its new office in Sofia, establishing a European R&D center for cyber protection, AI and blockchain projects. Sofia Investment Agency has been partnering Acronis in the process of establishing operations in our city. The international leader in cybersecurity and hybrid cloud solutions started its business with a team of 20 people. Almost two years later, more than 200 people work for the team of the company in Sofia. 

Stanislav Protassov, co-founder at Acronis, shares with us what makes Sofia the place to launch a successful business and to develop local solutions with global application.

Acronis opened its office in Sofia in 2018, establishing a European R&D center for cyber protection, AI and blockchain projects. Why Sofia?

It was a considered decision. We actually spent three years on research to find an ideal base in Europe. For this purpose, apart from Bulgaria, I personally visited Malta, all the Baltic countries, Austria, Germany, and Switzerland. We have been looking for a good talent base, taxation system, cost of living, economy level, and public safety. Eventually, we picked Bulgaria over the other European countries. 

We chose Bulgaria due to the country’s location, its status as an EU member, and the fact the local economy has good potential for future growth. Also, at that time we already had laid down the foundations for opening a local office — a 12-year partnership with T-Soft, a software engineering company based in Sofia, which Acronis had recently acquired. This partnership was a good base to start with.

Within two years, our team has grown from 20 to over 200 people. We are on track to become the largest Acronis R&D location and expect to grow up to 1000 people in the next couple of years.

Would you say that the talent in Bulgaria (in Central and Eastern Europe in general) is equipped with the skills for the tech industry? How did this affect your operations and how is it important for your business?

The level of engineering education in the Western, Central and Eastern Europe, and in Bulgaria in particular, is traditionally good. There are many good universities, and graduates are highly qualified. At Acronis, we are developing innovative products, so we are looking for talented and exceptionally qualified specialists. Collaboration with universities is one way of getting those talents.

Having an R&D presence in universities is beneficial for both universities and companies. Close collaboration with the industry would enhance the qualification levels of students and give the universities financial support. Companies, for their part, will gain greater access to cutting-edge research and scientific talent.

Sofia’s universities are open to such collaboration and I am optimistic about the future of Bulgarian higher education.

What best practices and knowledge would you like to share with other companies looking to expand or outsource operations abroad? Would you recommend a Central and Eastern European country?

We don’t look at Central and Eastern Europe separately than the EU. The European Union has one of the largest IT talent pools globally. According to different sources, in 2016 there were approximately eight million professionals in Europe, about five million in USA and six million in China. Now there are nine million in the EU. Europe has overtaken the US and China, and I think that any IT company looking for talent will benefit from opening an office in a European country.

If you plan to open an R&D center in a new country, I’d recommend performing the following steps:

  1. Start with finding a partner for M&A. You will need people with the local mentality and market expertise, including the labor market. Starting with local support of that kind makes it easier than starting from scratch.
  2. Perform a detailed audit before making a decision. Research the taxation, copyright, and migration laws. If you open an office in an off-target country, it will be an expensive choice for the company.
  3. Relocate some of your core employees. It is impossible to build a new R&D center without any knowledge transfer. You will need to relocate people with key competences and management skills. For example, right now, Acronis has four VP-ranked executives working at the Sofia R&D center.
  4. Develop relationships with the professional, academic and media communities, and involve your local team. It will help to establish your company as an important part of the regional business landscape and motivate your team.

Acronis recently announced a $147M investment round led by Goldman Sachs. With that you hit unicorn status. Congratulations! What is next for you?

Thank you. This investment in Acronis means we will continue to deliver cyber protection solutions while transforming the industry. We’ve been successfully pioneering the new cybersecurity approach that addresses the Five Vectors of Cyber Protection – ensuring the safety, accessibility, privacy, authenticity, and security of data, applications, and systems (SAPAS).

We’re planning to aggressively expand our R&D teams in the US, Bulgaria, Singapore and other countries. We are establishing a network of Cyber Protection Operations Centers (CPOCs) to monitor data protection environments around the world, which is also aimed at helping Acronis engineers research modern threats, and build easy, efficient, and secure solutions for cyber protection. The centers allow Acronis to monitor threats on all time zones, continuously 24/7.

We will also accelerate the development of other Acronis projects and products.

Would you say that being branded Singaporean makes it easier to establish trust when setting up operations in various countries across the world?

In fact, Acronis is a Swiss-Singaporean company with dual HQs in Schaffhausen and Singapore. Singapore is a stable, educated and neutral home for many technology companies. When it comes to ease of doing business, it’s like Switzerland – which brings another set of benefits. We are a global business and it’s important for our partners and customers to understand that we are neutral. We protect our clients’ data, and they need to be sure we are out of any politics.

How do you estimate the overall business climate in Sofia today? What sort of difficulties have you faced so far?  

Right now, Sofia is a convenient place for doing software business, but there is still room for improvement. The software business is global by nature, so for effective operations we need more mobility. I’ll be happy if Sofia develops further and becomes a European aviation hub. The current situation with the COVID-19 outbreak obviously has decreased international travel significantly and is affecting the whole world. But once the situation improves, this scenario is more than possible.

Another challenge is a long bureaucratic process of hiring people from other countries. To develop its economy, Bulgaria needs new people with expert knowledge, but it turns out that their relocation is difficult. Today we spend too much time hiring foreign qualified specialists: the whole process often takes from four to eight months. For example, you need to find and rent an apartment and get registered at that address first to be able to get a “blue card” to be officially hired by a Bulgarian entity. Moreover, this usually takes three or four weeks from the moment you entered the country. Another example – you can apply for family reunion only after you finish the relocation process yourself. In comparison, in Singapore, the whole relocation process takes around one month and you can relocate simultaneously with your family. 

Perhaps, it is not so important for large businesses, such as Google or Microsoft. They plan for many years ahead, and a 12-month office opening is not a problem for them. But for small and medium-sized businesses, this can be a real barrier to enter the country.

I think such obstacles should not exist in the future.

 

From outsourcing destination to local development of global solutions – is that a real trend in Sofia?

I have no doubts that the Bulgarian economy will grow. Bulgaria receives a record amount of foreign investment in software and ICT services, mostly in Sofia. Now Bulgarian engineers are accumulating technical expertise. This increases their value and cost on the tech market. Taking this trend into account combined with the economic growth we see in Bulgaria, the IT outsourcing will give way to say Costa Rica or the Philippines. So, the next logical step is moving towards product development. This happens in all countries with growing economies. It is good for a country’s economy in general and the software industry, in particular.

What needs to be improved in order to increase the number of new investors from both Bulgaria and abroad?

Sofia already has a special department established, and it is the Sofia Investment Agency. It’s a good instrument for attracting investment. I think clear KPIs and goals for such an agency could help. For example, the agency should plan to attract more and more companies every year, simplify employment processes and so on.

Another thing that can be improved is showing appreciation to a potential investor rather than taking it for granted. Global companies and investors always have a choice. Bulgaria is an attractive country for investment because the location is good and the taxation is one of the best in the EU for such companies. However, there are a number of other comparable countries, such as Estonia. Showing commitment, like organizing meetings with important local businessmen and government authorities, taking potential investors around the city, providing guidance in looking for offices and offering them general consultancy in whatever problem may occur, «babysitting» them in a way, could persuade them to choose Bulgaria.

Continuous efforts will help Bulgaria become even more attractive for software businesses.

 

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