“Explosive” Import Substitution in the Russian Software Market

Abstract An example of the adaptation of the Russian office software market to the departure of the world leader, Microsoft, from it in 2022 is considered. Despite the uniqueness of situations associated with the dominance of global corporations in markets and the methods of leaving them, the article shows that the logic of the “rebirth” of the market in such cases can be described in terms of the theory of economic dominance, i.e., taking into account the institutional transformation of the market, which has lost its structure-forming leader. To this end, it is proposed to analyze the replacement of the previous hierarchy of alpha, beta, and gamma companies in the market with a new system of vertical interactions and competition for future leadership. This description allows us to develop an approach to analyzing institutional transformations in other markets not only in the case of the abrupt departure of an absolute leader, but also in less dramatic situations—when the transformation matures gradually or affects part of the market. The elimination of direct and hidden dominance in this market has allowed Russian companies to escape the institutional traps that held them back and, by 2024, increase their market share to 75% almost from scratch. The factors driving changes in the market from 2020 to 2024 are analyzed and their impact is assessed, including a comparison of company strategies and the actions of the regulator (the Russian Ministry of Digital Development, Communications, and Mass Media). Based on identified market trends, an analysis is conducted of the potential for Russian office software developers to become international alpha companies in the future.