Microsoft Isn’t Feeling Any Russian Thaw

Putin’s drive to cut reliance on foreign technology is threatening the Russia sales of U.S. tech giants.

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By Ilya Khrennikov

November 17, 2016 at 5:01 AM UTC

This article is for subscribers only.

This article is part of the November 21, 2016 issue of businessweek.

In a Nov. 14 phone call with President-elect Donald Trump, Russian President Vladimir Putin held out the prospect of better relations between their two countries. But U.S. tech companies shouldn’t expect warmer ties to ease a Kremlin effort to freeze out their products.

Seeking to cut dependence on companies such as Google, Microsoft, and LinkedIn, Putin in recent years has urged the creation of domestic versions of everything from operating systems and e-mail to microchips and payment processing. Putin’s government says Russia needs protection from U.S. sanctions, bugs, and any backdoors built into hardware or software. “It’s a matter of national security,” says Andrey Chernogorov, executive secretary of the State Duma’s commission on strategic information systems. “Not replacing foreign IT would be equivalent to dismissing the army.”