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Home > Analysis > Russia Faces IT Crisis With Only Two Months of Data Storage Capacity Available

Within two months, Russia will run out of data storage capabilities (for their government and public sector information technology operations) after Western IT service providers pulled their cloud computing capabilities out of the country.

According to the Russian news outlet Kommersant (with sources confirming the situation on the ground in-country):

  • Emergency Meeting Held on March 9th:  Kommersant’s sources said that on March 9, a meeting was held in the Ministry of Digitalization with the participation of companies operating with a significant amount of computing power: Sber, MTS, Oxygen, Rostelecom, Atom-Dates (a structure of Rosatom), Krok, and Yandex. The parties discussed the prospect of a shortage of data storage systems and servers necessary to ensure the operation of public digital resources.
  • Forced Compliance if Necessary:  The authorities are ready to buy capacity from commercial data centers (DPC) and take into management the IT resources of companies that have announced their departure from the Russian Federation. The Ministry of Figures says that so far they are “analyzing the situation.” Operators of data centers emphasize that they themselves need help: prices for storage systems and servers have soared significantly, banks do not issue loans, logistics chains are destroyed. If the state still decides to squeeze private owners, experts believe, entertainment services will be the first to suffer.  In the event of a shortage of capacity, which may occur within two months, the source explains to Kommersant, the authorities want to conclude contracts for the lease of free capacities from commercial data center operators under a simplified procedure.
  • Russian Government Central to IT Economics and Infrastructure:  According to a preliminary estimate by iKS-Consulting, at the beginning of 2022, 55.8 thousand rack beds were put into operation in commercial data centers in Russia. The share of budget organizations and government agencies in revenues from colocation services (placement of the customer’s equipment on the contractor’s premises) is 7.1%. In the IaaS market (leasing of computing infrastructure), their share is much higher – 14.2%.
  • Potential Impact on Digital Media Access:  According to Igor Dorofeev, head of the Association of Data Center Industry Participants, if the authorities begin to urgently buy capacity from data center operators who are already serving commercial companies, at first this will not affect service users: “If the situation with the capacity deficit does not change, we will have to crowd in. Most likely, this will lead to the fact that the work of entertainment services will be limited: cloud gaming, music, and video streaming. “
  • Frozen Credit a Major Factor:  The second problem is access to money, Dorofeev says: “Equipment prices have skyrocketed, suppliers are demanding 100% upfront, and banks are reluctant to make loans. Concessional lending is now desperately needed.  (1)

What Next?

According to bleepingcomputer.com:  “The final option would be to tap into Chinese cloud service providers and IT system sellers, but this is currently complicated because China has not yet decided how much it’s willing to help Russia and on which sectors.

Huawei has reportedly suspended its equipment sales to Russia until March 26, 2022. However, being itself sanctioned by the U.S. and barred from 5G roll-outs in EU countries, the Chinese tech firm may grasp the business opportunity to fill the void left by exiting western competitors.” (2)

Further Resources

Chinese Tech Firms Weigh Opportunities in Russia After Western Pullout

Computer locked:  The authorities have restricted the export of imported equipment from Russia

Authorities isolate networks:  The government is preparing measures to protect state sites from disconnection

Open-Source Intelligence Resources

The USGS 2022 List of Critical Minerals:  Moody’s Analytics economist Tim Uy wrote in a recent report:  “The greatest risk facing global supply chains has shifted from the pandemic to the Russia-Ukraine military conflict and the geopolitical and economic uncertainties it has created.”  Our recent “Warning for the U.S. Chip Industry: Russian Retaliation Could Hit Supply of Key Materials” provided a breakdown of the Russian and Ukraine-source material critical to the semiconductor manufacturing process (Neon, Palladium, etc.). In February, The US Geological Survey released the 2022 List of Critical Minerals. Palladium and Scandium are included in the USGS list.

The UNHRC Operational Data Portal – Ukrainian Refugees:  The Human Rights Council is an inter-governmental body within the United Nations system responsible for strengthening the promotion and protection of human rights around the globe and for addressing situations of human rights violations and making recommendations on them. The Operational Data Portal (ODP) was created in 2011 to enable UNHCR’s institutional responsibility to provide any information and data-sharing platform to facilitate the coordination of refugee emergencies.

Bellingcat and the Russia-Ukraine Monitor Map:  Bellingcat (an innovative open-source investigative journalism network and business model) has been in our research arsenal for a while  – ripe for a post to introduce our readers to their tools, investigations, and innovative approach to networked journalism.   The war in Europe has now put Bellingcat in the spotlight, based on the growing popularity of their crowdsourced mapping and monitoring efforts.

Additional Research and Analysis On Ukraine

The February 2022 OODA Network Member Meeting: Topics Included Crypto Innovation, Security and Regulation and the Lead Up to Putin’s War:  To help members optimize opportunities and reduce risk, OODA hosts a monthly video call to discuss items of common interest to our membership. These highly collaborative sessions are always a great way for our members to meet and interact with each other while talking about topics like global risks, emerging technologies, cybersecurity, and current or future events impacting their organizations. We also use these sessions to help better focus our research and better understand member needs.

Why Hasn’t Russia Used More Destructive Cyber Attacks Against Ukraine?:  The malware that has surfaced in the Ukraine conflict has not been the most advanced, an odd development that has raised questions among security professionals. Once committed to a kinetic invasion, a logical presumption would be that more robust cyber weaponry would be deployed to match Russia’s military might to quickly subdue Ukraine. But two weeks into the conflict, the attacks that have transpired have been anything but extraordinary.

We Are In The First Open Source Intelligence War:  We are witnessing the world’s first war where open-source intelligence is providing more actionable insights than classified sources. Here are views on what this shift means for governments, businesses, NGOs, and Citizens.

What The C-Suite Needs To Know About The Annual Threat Assessment of the US Intelligence Community:  Every year the US intelligence community produces a succinct report designed to provide a high-level overview of threats. This is issued to coincide with testimony by the Director of National Intelligence and the biggest agencies of the IC, CIA, DIA, NSA, and FBI.  This year’s report follows the theme that the world is growing in complexity and uncertainty. This complexity and uncertainty occur in an interconnected world where great power competition is clearly underway.

Dr. Scott Shumate Profiles Russian President Vladimir Putin:  This OODAcast is a special edition focused on profiling Russian President Vladimir Putin with Dr. Scott Shumate, who has over 30 years of experience evaluating national leaders, terrorists, spies, and insiders.  Scott shares his unique perspective’s on Putin informed by his extensive experience and insight. Is Putin suicidal? Is he a rational actor? Will he escalate to cyber-attacks? These questions and more are discussed with Dr. Shumate.  Here are the major takeaways from the interview to inform your perspective:  The Putin Profile: Takeaways from our Interview with a CIA, FBI, and Military Psychologist.

Ukraine-Russia War Threat to Space Security Update –  The space security and space war aspects of the current Russian invasion of Ukraine have manifested in various ways since the beginning of the war. However, it was preceded by months of build-up, as massive military vehicle parks were created at various places along the Russian and Belarusian borders – all viewed from space.  The following is an overview list of the various issues that have arisen since the inception of the conflict.

A No-Hype Assessment on Starlink Security: Starlink is a great system, but it was not designed for combat and has limitations when being used in this role. Many mitigation measures are in place that can make it harder on adversaries to exploit these limitations. This post reviews provides insights onto these mitigation measures.

The OODA C-Suite Report: Operational Intelligence for Decision-MakersWhat is the value of an informed decision? At OODA Loop, we seek to surface decision intelligence that provides meaningful perspective for leaders and analysts looking to make the most informed decisions possible. The topics examined in this assessment represent developments that fit the category of operating in a VUCA world, identifying and responding to Gray Rhino risks, or opportunities from advancements in emerging technology domains. These are issues we think our members should be tracking and map to collection requirements for our team to keep you as informed as possible.

John Boyd on Patterns of Conflict and the OODA Loop John Boyd studied. He studied fighter pilot tactics, studied aeronautical engineering, studied bureaucrats and how to avoid their traps, studied evolution and biology, and studied history. And Boyd synthesized in a way that only a real practitioner of war could to produce a briefing called Patterns of Conflict that is still having a big impact on the world today.This post summarizes some key points worth reflecting on as the world views and reacts to the Russian invasion of Ukraine.

Thinking Strategically About What Comes Next and How To Mitigate Risk As we have previously mentioned, the Russian aggression against Ukraine will have impacts far beyond the region. All companies and all government organizations (including those at local and state levels) should evaluate the potential impact of these hostilities on operations. We are a nation interconnected with the world by complex supply chains and a global high speed internet and must be ready to deal with impacts.

Twitter List For Tactical Information: This Twitter list of vetted resources that have reported accurately on tactical moves in the Ukrainian theater can be used to quickly capture the gist of a dynamic military situation.

C-Suite Guide: Improving Cybersecurity Posture Before Russia Invades Ukraine: The capabilities of Russia to conduct cyber espionage and cyber attack have been battle tested and are hard to thwart even during daily “peacetime” operations. They include well resourced capabilities of the military and intelligence services and also deep technical expertise in the Russian business ecosystem and in organized crime which operates as part of Russian national power. Proof points of Russian capabilities include the massive and sophisticated Solar Winds attacks which leveraged low and slow, well thought out plans to achieve access to multiple well-protected targets. Ransomware successes by Russian based criminal networks are also instructive as to the capability of Russian cyber threat actors. The use of malicious self replicating code (worms/virus/trojan) to spread malicious code into infrastructure is also well proven with decades of practice including fielding software that replicates from unclassified to classified systems in the military and spreads throughout critical infrastructure. This post goes beyond an articulation of the threat into recommendations leaders seeking to mitigate cyber threats from Russia including threats before, during and after a Ukraine invasion.

What The C-Suite Needs To Know About The Threat To Space Based Systems (and what to do about it): OODA recently updated the analysis below on threats to space based assets (with a focus on what the C-Suite needs to know) because of tensions with Russia and continued testing of satellite destruction capabilities the most recent of which (Nov 2021) caused significant increases in dangerous space debris.  We recommend this be read in conjunction with our report on what the C-Suite needs to know about the cybersecurity threats due to the coming Russian invasion of Ukraine, see links in the document for more.

Will China Replicate Russia’s Cyber Offensives in a Taiwan Reunification?: The current situation in the Ukraine has garnered the world’s attention with stakeholders watching attentively as the crisis unfolds. Such regional hotspots have the potential of spilling over into neighboring countries and pulling in governments from all over the world in some capacity. The threat of armed conflict escalating into a major global engagement is always a possibility. China and Taiwan are eagerly watching the crisis as well, but largely for different reasons. While Taiwan is interested to see how friendly governments come to Ukraine’s aid, China is observing how Russia may go about reclaiming territory of the former Soviet Union, in the attempts of gaining insight into how such an act can be accomplished successfully, should Moscow do just that.

A Warning for the U.S. Chip Industry: Russian Retaliation Could Hit Supply of Key Materials: Russia may retaliate against the U.S. threat of trade sanctions and export curbs by blocking access to key materials like neon and palladium. Ukraine supplies over 90% of U.S. semiconductor-grade neon. This type of supply chain-based retaliation has become a priority concern for the White House, which is encouraging a broad diversification of the supply chain in the event Russia limits access to these key materials.

In 2022, the Strategic Impact of Global Intermodal Supply Chain Gridlock on IT Supply Chain Remains High: The OODA Loop Research Team has been tracking the impact on supply chains from the onset of the pandemic.

Russia’s Long Game, Leadership Lessons, and Learning from Failure: In February of 2021, Matt Devost spoke to Rob Richer, a highly regarded advisor to international executives and global government leaders including several heads of state. Rob has a well-informed perspective on international risks and opportunities and an ability to analyze and distill observations in a way that is meaningful for your decision-making process. In light of the conditions in Europe, this portion of their initial OODAcast conversation is timely and includes a discussion of Richer’s time as the head of CIA Russian Operations, his perspective on U.S./Russian relations (especially the role of cyber), leadership, the role of failure, and decision-making.

Charity Wright on China’s Digital Colonialism: Charity Wright is a Cyber Threat Intelligence Analyst with over 15 years of experience at the US Army and the National Security Agency, where she translated Mandarin Chinese. Charity now specializes in dark web cyber threat intelligence, counter-disinformation, and strategic intelligence at Recorded Future. Her analysis has provided deep insights into a variety of incidents, activities, and strategic moves by well-resourced adversaries, primarily actors operating in China.

The January 2022 OODA Network Member Meeting: Putin, Russia, Gray Zone Conflict Capabilities and The Future of Europe: To help members optimize opportunities and reduce risk, OODA hosts a monthly video call to discuss items of common interest to our membership. These highly collaborative sessions are always a great way for our members to meet and interact with each other while talking about topics like global risks, emerging technologies, cybersecurity, and current or future events impacting their organizations. We also use these sessions to help better focus our research and better understand member needs.

CISA Insights Bulletin Urges U.S. Preparation for Data Wiping Attacks:In what felt like coordinated attacks last Friday, data-wiping malware (masquerading as ransomware) hit Ukrainian government organizations and was quickly followed by an aggressive unattributed cyber attack on Ukrainian government sites. The attacks prompted the release of a CISA Insights Bulletin urging U.S. organizations to strengthen their cybersecurity defenses.

Additional Context on OODA Reporting on Russia’s Military-Technical Maneuvers in Europe: We are conscious of our need to keep our usual variety of News Brief and OODA Analysis, but for obvious reasons, this week is top-heavy with Russian, NATO, and Ukrainian coverage. We intend on keeping our focus on providing the context you need vice the blow-by-blow of major moves. Like in other domains we endeavor to provide the “So What?” and “What’s Next?” you need to help drive your decisions.

OODA Research Report- The Russian Threat: This special report captures insights into the capabilities and intent of the Russian Threat, with a special focus on the cyber domain. Our objective: provide insights that are actionable for business and government leaders seeking to mitigate risks through informed decisions.

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Daniel Pereira

About the Author

Daniel Pereira

Daniel Pereira is research director at OODA. He is a foresight strategist, creative technologist, and an information communication technology (ICT) and digital media researcher with 20+ years of experience directing public/private partnerships and strategic innovation initiatives.