There are many researchers and membes of the IC community in the OODA Network and amongst the larger OODA Loop readership, so we know many of you will relate to this breakthrough item. There is nothing like that one data point, needle in the haystack, kernel of research that sits – and sits – and just does not track (in this case, for well over a calendar year).  The post (below) from March 2021 is just such a piece of intelligence – and we have not reviewed or received one actionable update or research report on any of the issues reviewed in the post since early 2021.  Until today. 

https://oodaloop.com/archive/2022/03/17/russia-faces-it-crisis-with-only-two-months-of-data-storage-capacity-available/

March 2021:  Russia Faces IT Crisis With Only Two Months of Data Storage Capacity Available

These were the Russian IT supply conditions (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)

July 2023: The Crippling of Russia’s IT Sector

A recent report from The Record provides an overview of research by the Carnegie Endowment for International Peace (CEIP), which includes a case study of the tangible impact Western sanctions and export controls on the IT supply chain in Russia: 

“The hardware and software required for the Russian telecommunications sector to maintain the country’s electronic surveillance system, known as the System for Operative Investigative Activities (SORM), are increasingly unavailable, significantly undermining the Russian government’s Orwellian domestic spying system, according to a new report. Western sanctions and export controls put in place after Russia’s invasion of Ukraine have succeeded at blocking the Russian government from purchasing the technology it needs to prop up its sweeping surveillance of internet traffic and phone calls — a devastating blow since Russia- and China-produced tech isn’t sophisticated enough to maintain SORM, the paper from a researcher at the Carnegie Endowment for International Peace (CEIP) argues [in the Russian Analytical Digest (RAD)]. 

SORM dates to 1995 and is an intercept system under which the Russian Federal Security Services (FSB) can obtain telecommunications’ data, including call logs, the content of phone calls, web traffic and emails. In March 2022 the Finnish company Nokia stopped selling its equipment to Russia, but failed to disclose it had previously outfitted the sprawling SORM system, according to the New York Times. SORM has been used to monitor supporters of Russian opposition leaders like Aleksei A. Navalny and to intercept phone calls of an enemy of the state who was later killed, the Times reported, noting that the system has also likely been used to repress Russian activists who oppose the Ukraine war.

Russia has intensified its grip on domestic internet service providers (ISPs) in the wake of the invasion, and by summer 2022 the Russian Digital Ministry moved beyond fines and began stripping ISPs of their operating licenses if they were found to be out of compliance, says the paper, written by CEIP senior fellow Gavin Wilde. The SORM system also has had a profound impact on Russians’ ability to get unbiased information about the Ukraine war. Russian authorities ‘began piggybacking on SORM infrastructure to block traffic from, and access to, thousands of Western websites and services,’ the paper says. ‘In practice, the standard for digital communications in Russia — for which SORM is a centerpiece — is now “that which cannot be surveilled or censored will not be transmitted.”‘ However, the longer the sanctions endure the less effective SORM becomes, Wilde argues.”  (1)

For more of Suzanne Smalley’s great  coverage of this issue at The Record, see:  Russia’s vast telecom surveillance system crippled by withdrawal of Western tech, report says

What Next?

We will be continue to follow the leads and pulling the threads on this ongoing story.  

Russian Analytical Digest (RAD) – No. 298: Russia’s Technological Sovereignty

The topic of this issue is Russia’s technological sovereignty and the impact of sanctions on the semiconductor industry and telecommunications surveillance. Julien Nocetti discusses how Western technological sanctions have targeted semiconductors as dual-​use technologies. As a result, the defense sector has suffered, degrading the capabilities of the Russian armed forces in the long term. Gavin Wilde shows how the hardware and software necessary for the Russian telecommunications sector and the country’s electronic surveillance system have become increasingly inaccessible, creating obstacles to surveillance.

Contents

• Sanctions Calling: The Dire Prospects for Russia’s Chips Industry by Julien Nocetti (French Institute for International Relations (IFRI), Paris)
  Can Russia’s SORM Weather the Sanctions Storm? by Gavin Wilde (Carnegie Endowment for International Peace, Washington D.C.)

For a pdf version of this report, go to No. 298: Russia’s Technological Sovereignty