In 2020, CROC managed to increase its revenue by 26% YoY from RUB 31 billion to almost RUB 39 billion, incl. VAT (or from RUB 26 billion to RUB 33 billion, excl. VAT). This represents two-times faster growth than the overall Russian IT market, with computing infrastructure projects generating as much as 25% of total revenue. Meanwhile, telecom services, information security, and Big Data were the fastest growing business lines.
In 2020, we completed a total of 2,794 projects for 888 customers. There was a 10% increase in the total number of projects; notably, the number of large ones with budgets starting at 100 million rubles grew by 11%.
Adopting a new approach with a strong focus on creating added value and facilitating the success of our customers helped us win 282 new business customers in 2020 - a 15% increase from 2019. There was also a rise in high lifetime value customers. Indeed, almost two-thirds of our clients, or 553 companies, are working on ongoing collaborations with us for at least three years, generating 6% more revenue YoY. Meanwhile, the customer churn rate decreased by 23%.
In 2020, CROC’s geographic coverage expanded by 19% to reach 422 cities across the globe.
Boris Bobrovnikov, CEO, CROC:
While 2020 turned out to be a challenging year for everyone, it is now clear that the pandemic acted as a digital transformation enabler for businesses in Russia. Companies that learned how to quickly adapt to uncertainty were able to minimize their losses, while some even managed to grow. CROC struggled over the past year also. However, with continuous transformation being part of the company's DNA, we quickly embraced the new reality and facilitated this journey for our valued customers and partners. Highlights of the past year included a 26% increase in revenue, corporate ecosystem expansion, new customer collaborations, and the securing of yet more exciting projects. I deeply appreciate the level of trust that our customers are showing in us and, of course, am highly grateful to the CROC team for being ready to address any challenge and thrive on it. Let's hope 2021 will be an even more exciting and rewarding adventure!
CROC performance breakdown by business line
The strongest contributors to revenue over the past year were computing infrastructure (25.5%), digital processes (9.2%), computing equipment service (7.2%), and network solutions and information security business lines.
One of the most important infrastructure projects in 2020 enabled our customer Ingosstrakh to accelerate time-to-market for new products. The hybrid cloud created by CROC allowed Ingosstrakh developers to enjoy automatic and much faster allocation of required resources for development and test environments.
Some of CROC's technological practices were in great demand in 2020, with the following business lines posting the fastest growth:
- Telecommunication services (+97%)
- Information security (+44%)
- Big Data (+40%)
- Cloud services (+39%)
Among sophisticated telecom projects of 2020 was the network infrastructure that we built for Rosenergoatom data center. Indeed, this data center is unique because of its location right next to a nuclear power plant, and it is now also truly innovative thanks to automation powered by SDN technology.
In 2020, CROC divided all service and product offerings into three major clusters: business solutions, infrastructure solutions, and engineering and multimedia systems, with results breaking down as follows (YoY):
- Business solutions: (+33.5%)
- Infrastructure solutions (+19.4%)
- Engineering and multimedia systems (-16.2%)
Business solutions is the most actively growing cluster, remaining in an uptrend over the past two years (+16.5% in 2019). This cluster comprises CROC business lines providing targeted solutions to specific customer tasks, whether the creation of a virtual simulator for emergency drills at a production facility or deployment of an LMS system to provide employees with necessary soft skills training. For instance, one of our projects — implementation of enterprise data management platform for Gazprom Neft — won Project of the Year 2020 in the Analytics and Big Data category.
In response to the new reality, the CROC engineering and multimedia systems team focused on what the market is demanding, namely data centers and collaboration offices that can be built rapidly. In 2020, we created a multimedia ecosystem at Gazprom Neft Digital Transformation Center and Irkutsk Oil Company headquarters. In response to market demand for the ability to immediately boost capacity, CROC contributed to the design and construction of large infrastructure facilities, including a modular data center for Magnitogorsk Iron and Steel Works. Our museum portfolio now boasts a digital exhibition for ‘Zoya’ museum complex in the Moscow Region.
Industry-specific practices have been offered by CROC for over three years. In 2020, revenue breakdown by industry looked as follows:
- Finance (including banking, insurance, and financial companies): 25% of total revenue (+16% YoY)
- Government: 17.8% of total revenue (+15% YoY)
- Manufacturing: 16.2% of total revenue (+46% YoY)
- Retail: 11.6% of total revenue (+31% YoY)
In 2020, the fastest revenue growth by industry occurred in:
- Oil & gas: revenue doubled
- Telecommunications: revenue doubled
- Energy:/501> revenue doubled
- Manufacturing: 46% growth
Solution packages to support business during pandemic
Just after the outbreak of the pandemic, our technical and marketing teams joined efforts with business development managers to build a new portfolio of remote work solutions that include all of the tools and services needed for remote customer teams to perform effectively. The first iteration of this portfolio was introduced to the market on March 23, 2020, with a few more versions to come over the following months.
Our remote work portfolio allowed students of the Higher School of Economics to follow their spring term 2020 syllabus via virtual classrooms. Meanwhile, the same package helped the staff of Cosmopolitan, GQ, and other magazines within the Conde Nast holding to continue bringing joy to their readers even during the pandemic.
Another solution package was announced in April 2020 to help companies recover from the pandemic. From March 1 to September 30, 2020, business lines represented in this new anti-crisis portfolio grew by 82% in revenue (YoY), generated more projects and enjoyed a 172% increase in the number of new customers. The fastest growth occurred in the computing infrastructure, digital processes, and unified telecommunications business lines.
CROC’s digital transformation was officially launched back in 2018. At first, changes were implemented in conventional cycles of six to eight weeks. Two years later, when we knew for sure that transformation had become an inherent part of the company's DNA, we proceeded with a continuous improvement culture. This approach allows CROC to quickly adapt to any changes and make our services and products even more marketable.
In 2020, CROC decided to reboot the company's internal product development and customize best market practices in line with customer needs and internal business processes. The new methodology gave birth to CROC Product Lifecycle, CROC Product Profile, and CROC Product Owner Profile. It also allowed for a more mature approach towards key products such as CROC Cloud and Digital Worker platform, as well as the rolling out of some new B2B products.
In 2020, our production teams mastered and offered customers a variety of the most convenient, yet effective, project management options. These include agile and classic waterfall practices, working in cross-functional teams, as well as performing project activities on the customer side.
During the year, CROC production departments focused on further developing agile models to streamline customer experience and thus allow businesses to perform in a quick and flexible manner, even during the pandemic.
CROC vs. the pandemic
Some significant achievements during 2020 were directly related to working under the new realities of the global lockdown.
The spring of 2020 began with CROC employees switching to remote working in just three days. Indeed, most of the team was working from home as early as March 17. CROC Helpdesk managed to make this transition absolutely seamless, without a single team being cut off from the usual work tools or experiencing efficiency degradation.
Not only frontline employees, but also the back office, put in a great deal of effort. The Corporate Culture, Internal Communications, and Training teams drove this transition to remote work and supported all departments throughout 2020. They helped employees with courses to build the skills needed to effectively work from home, developed new meeting formats with top managers (to keep everyone updated), and also launched sports and culture programs to avoid burnout caused by being restricted to one location, etc.
In 2020, we launched HotLineCROC, a consulting center for COVID-19 control. The principal function of the project was to make our office safe. The project team equipped office space with contactless door opening sensors, accurate pyrometers, antiseptic dispensers, germicidal lamps, masks, and respirators, while also drafting office safety rules, and much more. The second main function was to support sick employees and their families with medication, doctors, and potential life-saving recommendations. Indeed, this CROC initiative won the Stevie Award for Great Employers in the ‘Most Valuable Employer – EMEA’ COVID-19 RESPONSE category.
Plans for 2021
We remain focused on improving efficiency, aiming to increase revenue by 20% using a continuous development approach that addresses both CROC internal processes and ongoing efforts to react to changing market trends and customer expectations. In 2021, we will also focus on further expanding the above solution portfolio. Another key task is to find more and better ways to ensure that sales, production, and marketing are perfectly in sync with one another. We hope this will eventually create even more application solutions to foster further customer business success.
 Pandemic-related restrictions impacted results.