Enterprise Times recently spoke with Dmitry Bagrov, UK MD of DataArt. Founded in New York in 1997, the company has grown steadily. In 2007 it opened two R&D offices in Ukraine, in Kharkiv and Kherson, which were heavily impacted by the war.
Bagrov gave some insightful answers to questions about the company. Bagrov has been with the company for 23 years and has been leading the UK operation for the last 22 years. Today, he is focused on business development, talking to clients and partners, including technology partners such as AWS, Microsoft, Google and Stripe. He is responsible for planning the strategy for growth in the UK.
I first asked Bagrov to give me a 30-second pitch for DataArt.
“DataArt is a technology company that helps its clients solve business problems via the application of real-world knowledge and real-world technology. We have the scale, we have the experience, we have the human capital, and most importantly, we have the drive to help our clients. That’s DataArt!”
Can you give me a State of the Nation company update in terms of numbers that you can share around customer revenues, employee offices and growth rate?
“The company is a little bit shy of 6,000 people globally. We have 30 offices around the world. The biggest areas are Eastern Europe, the UK, the US, Latin America and the Caucasian region. In terms of customers, we have 328 clients (as of September).
State of the business
What is the state of the business in terms of numbers?
“In terms of revenue this year, we are a little bit shy of 400 million US dollars. We grew significantly during COVID, and we continued to grow last year and this year, even through the war and the economic downturn.
“We obviously revised our growth expectations at the beginning of this year when the economy declined. But that is actually in line with what is happening in the industry. I think most of the players had expectations of about 20% growth for 2023. Pretty much everyone revisited it down close to being flat for 2023, and so did we.. We expect around 4 to 5% growth this year.”
DataArt partners with several technology firms, including Microsoft Azure, AWS, Google Cloud and application vendors such as Stripe, Bigcommerce, and Oracle. What do these partnerships bring?
“We generally tend to partner with technology and platform players in our industry that can benefit our clients. For example, partnering with Stripe allows us to implement payment solutions for our clients much quicker. For Stripe they get additional clients onboarded on their platform. It’s a bit of a win-win situation for both sides.”
What have you achieved this year?
“The year is not yet over! Probably the biggest achievement that we have this year is that we continued on a positive growth path. Given the war that started last year and the economic circumstances, it actually is quite a big achievement. We continue growing, we continue expanding. We opened a couple of new locations this year in Mexico and India.”
Routes to market
What are your routes to market?
“A lot of our clients come from referrals; actually, almost 80% of all our clients come from referrals. Which is a testament to the consistency with which we live to our people’s first principle. We invest a lot in relationships. We are there to support our clients when things go wrong. Unfortunately, or maybe fortunately, in technology, it’s not a question of if, it’s a question of when. Something does go wrong, inevitably.
“DataArt has proven over the years that we would stand with our clients, regardless. With size, we’re capable of definitely taking a much longer view. We always viewed our clients as our partners. We took the longer view in terms of, we can get a quick win now, but if it gives us a loss in a year or two years, then it’s not really a viable way forward.
“A significant number of relationships start from industry events. So we do attend conferences, we attend various events in London, New York and other locations where we’re present. It’s a very good way of establishing relationships, and then that leads to more clients.”
What do you hope to achieve by the end of 2024?
“I sincerely hope we’ll see the economy turning into positive numbers again. I hope we will be able to continue growing. But most importantly, I think it will give us an opportunity to move into a strategic direction of working with bigger clients and bigger programmes.
“We have a very diverse client base and work with a fair amount of enterprise-level companies. We also work with a lot of medium-sized and small companies. For us, it’s very important to maintain this diversity. At the same time, if we are planning to grow, we need to be able to move further up into bigger programmes. That’s the ambitious goal for 2024.”
Bagrov then explained the maturing of DataArt as a consulting organisation.
“If you look at our industry, there are several levels that companies can work on. There’s team augmentation, where they provide people to augment the existing teams within client organisations.
“There’s a project level where vendors take responsibility for particular projects. Then there’s the programme level, where vendors take responsibility for parts of or entire digital transformation programmes, and they actually become not vendors but full-fledged technological partners.
“That is where I see DataArt moving. I think we have the capability. We certainly have the drive, the knowledge, and access to resources to do that. We have a couple of clients where we do that already.”
On generative AI
2023 saw the emergence into the mainstream of generative AI. What technology will emerge in the next two years?
“In terms of generative AI, I think a lot of the questions that are currently crying to be solved are not actually technological. There are a lot of compliance questions, legal questions, and ethical questions. The companies that want to use generative AI need to solve all those things before they actually launch a full-scale usage of the technology.
“In 2024, hopefully, some of those problems will be solved. That will allow us to see more of this technology used. I honestly think that generative AI is a very big thing.
“It’s probably as big as Cloud. When Cloud appeared some time ago, it was a game-changer for a lot of things. I think generative AI is going to be on a similar scale. But, as I said, certain things need to be solved, which is actually not dissimilar to how Cloud evolved.
“There were a lot of concerns about the safety of data, cross-border legislation, and everything else. Some of those things. Most of those things were solved, which allowed us to see the Cloud in all its glory.”
Do you see anything new emerging?
“That’s a very tricky question, Steve. I hope that will be. The reason I say I hope is that I think a lot of the things that we say are new; they’re not actually that new. Generative AI as a concept is not new. I don’t think we will see major technological breakthroughs. But I certainly think that we will see a change in the adoption of generative AI in particular, and some other things as well.”
On the IT Services Market
How do you see the market evolving in 2024 for IT services?
“It’s really hard to predict because technology now being part of pretty much everything that we do, is actually a lot more dependent on what generally goes on with the economy and the world as a whole. The slightly cheeky answer to that, is I think the market will move in the direction of valuing the ability to look at the problem first and then the solution second, rather than what we see now.
“Maybe that’s the optimist in me talking, but I certainly see some positive signs in that regard. Given the availability and ease of use of a lot of the technologies, there’s an ever-growing temptation to start throwing solutions without actually understanding what the problem is. I certainly hope that the market would shift in the direction of, let’s first understand what it is we’re trying to do and then start implementing lots of lines of code.”
Are you talking about outcome-based?
“In my head, outcome-based and problem-based are slightly different. When I talk about outcome-based, it means I understand where I am now, and I understand where I want to be, and I need to find a way from here to there. When I talk about problem-based, it’s more about the present and understanding the start of the journey rather than planning for the destination.
“What I observe in the market is that a lot of the projects are started with a view of, we need to be there, without a clear understanding of where we start from. That is, I think, paramount when you embark on any sizable journey in technology in particular.”
On challenges and priorities
What are your challenges?
“Well, the biggest challenges are geopolitical and economic. We do seem to be living in a world which is not showing any signs of calming down, which is a bit sad. In terms of our challenges as a technology company, I think it’s understanding and acceptance of our own size and ability.”
Bagrov then quoted Arthur C. Clark’s second law, “The only way of discovering the limits of the possible is to venture a little way past them into the impossible.”
Bagrov continued, “For us, that’s the biggest challenge. We need to be a little bit more brave in venturing out of our comfort zone and taking on things that are not something that we have been doing for years.”
What are your priorities?
“Our number one priority is our people. We always prided ourselves on being a people-first company. That was tested heavily last year. I do hope we behaved appropriately when the war broke out and when the situation deteriorated. Our priority is to make sure that our people are taken care of, and we plan on continuing to grow.
“Our priority is to make sure we continue hiring at the same level of quality, and maybe even sacrificing speed of hiring in favour of finding the right people. One of my favourite quotes is, “It’s easy to teach skills, but it’s really hard to teach attitudes”. We do try to find people with the right and compatible attitudes towards work, and then we teach them the right skills.”
The Book question
What’s the latest book you read, and what was your take-out for business from it?
“I read a lot. I’m a book junkie. Funnily enough, I was not reading a new book. I was rereading the Foundation series by Isaac Asimov. Which is, from my point of view, every time I read it again, it gives me something else to think about.
“In this particular case, it was crisis management. There’s an interesting concept in the early books that the right way out of the crisis is the only way you have left because, by definition, it is the right way. I remember being very smitten by it when I first read this years ago but I don’t think I understood it well enough back then because I understood it as doing nothing until the only solution presents itself.
“I realised that’s not really what Asimov meant. But it’s an interesting concept of how to be calm in the storm, which I think many of us can use this skill. I’m not perfect in it, by far. But that’s actually one of the lessons: how to manage crisis and how to strive to be calm.”