«"Working on Russian software is a time bomb" - interview with Dmitry Popinako, CEO of Innoware, to the publication "Computer Review"»

July, 2026

This year Innoware celebrates 25 years of operation. During this time, the company has gone from a small team to one of the leading experts in the implementation of Microsoft Dynamics 365 in Ukraine and abroad. On the eve of the anniversary CEO and founder Innoware In an interview with the publication "Computer Review", Dmytro Popinako shared the history of the company's creation, memories of the first steps in IT, and the development of the Ukrainian market. ERP and CRM, partnership with Microsoft, as well as his vision of the future of digital business transformation and the role of modern technologies in the reconstruction of Ukraine.

My earliest memory of computer technology is from my school years, around the seventh or eighth grade. I studied at school No. 155 in Kyiv, and once we were taken on a tour of the computer center on Bulvarno-Kudryavskaya (then it was Vorovsky Street). It was some kind of research institute, and now it is the main office of Energoatom. We were taken to the laboratory, and for the first time I saw mainframes with characteristic green terminals. While the specialists were telling the group something, my classmate and I, taking advantage of the fact that no one was watching us, started clicking on the keyboard. We didn’t know what we were doing, but it was something cosmic. Suddenly, another person ran up and chased us out of there with screams. This was my first, somewhat childish, touch on the world of large computers.

A more serious immersion began in the second year of the Kyiv Polytechnic Institute. I entered the radio engineering faculty, radio engineering, because my parents advised me to go there "where the biggest competition is" - and I wanted to test myself for strength. Although now I regret a little that it was not the faculty of informatics and computer technology (FIOT), but that's what happened. After the first year, I realized: general radio engineering is not as interesting to me as computers. I started working in the laboratory right at the faculty, which was engaged in software development. In the laboratory, considering that it was the radio engineering faculty, the main direction of work was related to the development of software for radio design. In particular, there were unique solutions for designing printed circuit boards for placing radio elements, power elements, etc. on them. There was also the so-called "hackneyed" work - orders from enterprises to develop accounting systems. What was interesting: specialists from our laboratory traveled throughout the Soviet Union. I was sincerely surprised then: why travel thousands of kilometers, if there are a lot of enterprises in Kyiv itself? But orders came from everywhere, in a way that is still incomprehensible to me. The laboratory created accounting systems, modules for personnel and payroll. Personally, I was more focused on writing programs for radio design at that time, but the general atmosphere of creating automation systems surrounded me constantly.

What kind of hardware did you have to work with in those laboratories in the late 80s? What did you have in your hands and what were the capabilities of those machines?

It was an era of transition. We started with mainframes, there were also machines of the series, SM-4, EU-1920 – also huge and heavy. But the real revolution began when personal computers appeared. It became much more interesting – the MS-DOS environment, the first steps in programming on this platform. The most vivid memory is the first IBM PS/2. They were made incredibly beautifully. The keyboard was especially impressive – heavy, high-quality, with a very clear response. Even when personal computers with color screens began to appear, the IBM PS/2 with its monochrome black and white display still seemed to be the standard of quality. It was more pleasant to work on it because of the ergonomics and the quality of the device itself and its speed.

How did your life change after 1991? Did you stay in the university environment or did you immediately go into the private sector?

I realized that I wanted to be closer to real business, so I transferred from full-time to evening classes to be able to work full-time. I focused on this completely. When the USSR collapsed, the first private companies began to emerge. One of the very first such structures was created by the teachers of the department and the management of the laboratory. The company was called "Ramek" (radiomicroelectronics). It was a unique structure at that time, which had two main directions - software development and medical devices. Moreover, I think it was the first private company in Ukraine that was engaged in creating software.

Imagine the level of development: in the early 90s they created medical sensors that were applied to the body and measured the pulse using light-emitting diodes and photodiodes. In fact, this is the same technology that is now in every modern smartwatch that measures heart rate, but Ramek had industrial samples in Kyiv already then, in the early nineties. It's a pity that that potential was not realized.

The most pressing technical issue at that time was localization. Computers that began to be mass-produced did not have the Cyrillic alphabet, and later appeared with the Cyrillic alphabet, but without the Ukrainian letters - "i", "i", "e", "g". State bodies had just begun to actively switch to the Ukrainian language, buying computers, dot-matrix printers, but there was no support for the native language in either the hardware or the software - this was a big problem. I was involved in the direction - writing drivers to support the Ukrainian language. And I not only wrote the code myself, but also literally drew fonts for screens and dot-matrix printers. I prepared documentation so that the user could configure it, and went to large enterprises and organizations for implementation. We worked in a team with "bearded programmers" of the old school - these were extremely experienced people who at one time wrote Unix-like systems for computers manufactured by the VUM factory, which was located on Okruzhnaya. This mixture of academic knowledge and the need to solve practical problems became my professional foundation.

How did your transition from drawing fonts to an international consulting firm happen?

In 1994, a colleague told me that an American was looking for specialists to start a business in Ukraine. I sent my resume, and Scott Robertson, that was his name, invited me to an interview, which took place at the Latvian Embassy in Moscow. His company, Robertson & Blums, was Latvian-American: Scott Robertson himself was American, and his partner, Ivars Blums, was Latvian. It was September 1994, and on December 1 of that year I officially started working.

The Roberston&Blums office was located in the Ukrainian House on European Square - we were allocated a corner in the premises that was rented by Arthur Andersen - at that time one of the representatives of the "big six" auditing companies, now the "big four" remained. The contrast was incredible: I came in a sweater and jeans, with long hair tied in a ponytail - a classic programmer. And everyone there was in suits, white shirts and ties. Scott looked at me on my first day of work and asked: "Do you have a suit?" I replied: "Yes, but it's uncomfortable." And he said a phrase that I remembered forever: "Dima, let it be uncomfortable for you.".

Scott and Ivars' idea was to bring an international accounting product to the post-Soviet space, which was used by multinational corporations. The demand was huge, because these companies were discovering the former Soviet Union, but did not trust local software at all. We brought the SunSystems system from the British company Systems Union to the market. Our first customers were the Interbank Currency Exchange, Ilta (a Peugeot distributor), and Wella.

Why did you later end your collaboration with Arthur Andersen? Was it a strategic decision or a coincidence?

The idea was that Robertson & Blums would provide software, support, and adaptation, and Arthur Andersen would handle implementation. But, as always, it all depends on people. The managing partner in Andersen's Kyiv office was already a man at the end of his career at that time, and these computers were probably completely incomprehensible to him and not very interesting. He did not provide the team with qualified people, the projects began to "hang", and in the end they offered us to move out of the office after about a year.

The question arose: should we close the office or implement it ourselves? I told Scott that we would manage. The first successful independent project was Wella. This experience of providing consulting services became an impetus for development. By 1997, the office already had 40 people. Then I went on vacation to Barcelona for the first time in four years and then the idea arose to open an office there, but the shareholders chose Kazakhstan and Azerbaijan instead because of the oil and gas boom. So instead of Spain, I went to open offices in Almaty in 1997 and Baku in 1998.

How did you get through the 1998 crisis?

After the crisis of 1998, the shareholders decided to go online. The idea was to create a portal like china.com – a universal resource with mail service, news, weather and other general services. We even created one of the first sites in the former USSR for selling tickets online together with the agency «Intermedia». For that time it was a real breakthrough, the concept was great. The shareholders« intention was to launch a startup and sell it. But they didn’t have time: in early 2000, the »bubble burst”, Nasdaq fell, and the idea didn’t work. The project had to be disbanded.

I decided not to return to Robertson & Blums and founded Innoware in 2001. The ERP market was still in its infancy. I needed a product that would allow me to modify business logic. SunSystems was configured only by parameters, and our accounting is so specific that without adding code it was very difficult to configure the system to the requirements of our accounting and tax accounting - it was extremely difficult to train people to use such a system. At that time I was choosing between the Dutch Exact and the Danish Navision. I chose the latter, we introduced their product Navision Financials to the market and the next year, 2002, Navision was bought by Microsoft, and we automatically became a Microsoft partner.

There is one fact about Navision itself that I think could be used as a case study in business schools. Sometime in the early 90s, Navision signed an agreement with Maersk, also a Danish container shipping company. And Maersk literally took this product around the world: wherever the company went, Navision went there. Thanks to this, the product gained a global presence long before Microsoft even noticed it. And when Microsoft was choosing which system to buy, they were interested in this - a ready-made product that already worked all over the world, and not local development from scratch.

The name of our company, Innoware, was suggested by a professor of economics, Mr. Volodymyr Savchuk. I came for advice and he said this: «Companies will need innovations, and those who will learn them faster will have an advantage.» The next morning I woke up with this name. Our first major client was Zhytomyr Butter Factory (TM «Rud»). Mr. Petro Rud is an extremely progressive person with enormous energy. Thanks to automation and his ambitions, they increased their production output tenfold and entered global markets…

You mention that Ukrainian accounting is complicated by the Soviet legacy. What exactly is this paradigm conflict about?

In the former Soviet Union, there were almost no computers, accounting was carried out in "ledgers" - large barn books. "Chess records" were used there: sheets were marked with cells and accounting data was recorded at the intersection of accounts. This purely paper logic was literally preserved in software that emerged in the post-Soviet space. And, by the way, 1C (BAS) still uses this paradigm.

Western systems are based on the memorial recording system. It is much more flexible: it does not require a strict debit-credit correspondence in each line of each transaction. You can make several debits and one credit, or vice versa - it is easier and more convenient. But our legislation still requires a strict correspondence. We had to rewrite a large part of the business logic of Navision, spend thousands of man-hours to adapt the product to national fiscal requirements. The introduction of the «first event» for VAT was also an extremely radical and complex change.

Today, the Ukrainian fiscal system is perhaps the most complex in the world in terms of resource intensity. Enterprises keep three records: accounting, tax, and management, because they do not match. This generates a huge amount of unnecessary work. If we simplified this bureaucracy, Ukraine's GDP would automatically grow by one percent simply due to the release of resources used to support an overly complex fiscal regime. In the West, reporting is submitted once a year, reports are formed according to international financial reporting standards - and this, according to research, takes 24 times less time than in Ukraine. Our reporting system is like a "scarecrow" that scares investors and complicates the development of Ukrainian enterprises.

And how, in your opinion, did 1C manage to become such a total monopolist in Ukraine?

It's a long story. In the 90s, there were a large number of different accounting programs on our market - "Fat Hans", "Softtaxi", "FinExpert", "Lady Fin", etc., and 1C, among others. They were somewhere on the same level in terms of capabilities. But in Russia, copyright protection legislation was introduced sooner, and the market was significantly larger. 1C began to collect real money from the market and reinvested it in product development. At the same time, enthusiasts appeared in Ukraine who adapted 1C to our laws for a pittance.

When 1C realized its prevalence in our country, they opened a representative office, began selling official licenses and – oddly enough – lobbying for copyright protection, crushing all smaller competitors.

But today we are talking about 1C not only as a software, but as a matter of national security. Why is the use of this product dangerous for the country?

This is really a security issue for the country as a whole, and we just need to shout about it. First, any software can have so-called backdoors. Remember the Petya and NotPetya viruses in 2017, which penetrated Ukrainian corporate networks through commonly used software. The losses across the country were multi-billion, and many companies were unable to recover at all because their data simply disappeared along with their backups.

But cyber experts say: complete destruction of data is only the final step. It is much more profitable for the enemy to read information unnoticed for years. If our defense complex, industry, or strategic enterprises operate on 1C or BAS, hostile intelligence can gain access to our entire internal life, about suppliers, settlements, financial status, buyers, etc.

Secondly, there is the ethical and financial aspect. The software developer receives royalties, pays taxes to the Russian budget, and they go to produce missiles and shaheeds that fly at us. It's a vicious circle. After 2014, they simply made a clever legal move: they registered a legal entity in Poland under the name "1C International", renamed the product to BAS and began to call themselves a "European developer". But everyone understands that this is the same product, because such complex systems do not appear out of nowhere in one day. Business often behaves cynically, ignoring these risks, but we as consultants must report: working on enemy software is a time bomb.

Is there a real movement towards a legislative ban now? Yes, there was bill No. 13505 – on restricting the use of hostile software. It was supposed to pass its first reading in early November, but the parliament's attention then switched to other, mostly political, scandals, and the Rada recently "failed" it. So we have to wait for a new legislative initiative in this direction.

The previous document provided for a transition period of five years. Honestly, as an interested party, I would like everything to happen faster. But if you look at it realistically: we have hundreds of thousands of enterprises still working on this software, and in five years they simply will not have time to switch. Therefore, we need either a longer period or another mechanism - not a total ban immediately after the end of the transition period, but moderate fines. If you want to continue using a hostile product - use it, but pay a fine. We warn you about the risks and encourage you to switch, but we do not kill your business with one decree. I think that this approach - gradual pressure through fines, not a sharp ban - will be the most effective incentive. Some enterprises, having assessed these fines in a year or two, will decide to switch on their own.

If we return to the development of your company, there were difficult periods in the history of Innoware, when the company suffered not only from external crises, but also from internal conflicts.

Like any other company, we went through different periods of development. And, unfortunately, yes, we had to go through two major crises. And they not only coincided with the crisis periods in the country, but were also accompanied by intrigue within the team. The first case occurred in 2008 against the backdrop of the global financial crisis. Then the ERP market fell sharply, sales almost stopped. At this most difficult moment, a married couple of employees left us - a sales manager and head of the Navision division. They created their own company and, when they left, took with them our unique localization developments. A lot of effort, years of work and money were invested in these developments. At that time, we simply did not have the strength and financial resources for legal proceedings - we had one desire: to survive and preserve the remnants of the staff.

History repeated itself almost exactly in 2022. Again a married couple, again one of them was in sales – and again the creation of a separate company based on our developments. To all questions, they simply brazenly said: «We developed this too.».

This situation, unfortunately, is not unique. It is a problem on a country-wide scale: if we do not learn to effectively protect intellectual property at the legislative level, we will never create large technology companies, because every know-how will be stretched bit by bit. What's more, we will not be able to attract large investors to the country because of these problems.

When you became a Microsoft partner, just when the company was actually creating the Business Solutions division. What did this collaboration look like from the inside?

When Microsoft decided to enter the business segment, they acquired not one product, but a whole series: Navision, Axapta (produced by Damgaard), as well as the American Great Plains and Solomon. It was a period of great expectations and the company achieved great success, now it can be said for sure. But along the way, Microsoft made many mistakes, especially in marketing and understanding what an ERP system is.

I remember talking to Doug Burgum (former CEO of Great Plains, then head of Microsoft Business Solutions, now US Secretary of the Interior) in 2004 in San Diego. I asked to increase product advertising so that it would be easier for us to compete in the segment. But the approach was specific: they don't advertise a product to enter the market; they wait until the market itself starts consuming the product actively enough to allocate funds from the profit for marketing.

There was also a major, in my opinion, strategic miscalculation codenamed Project Green – an attempt to merge Navision and Axapta into one product. This was wrong in my opinion, because they are two completely different products, intended from the very beginning for different segments: Navision (now Dynamics 365 Business Central for medium-sized businesses, and Axapta (now Dynamics 365 Finance and Supply Chain Management) – for the large Enterprise segment where one of the competitors is SAP, in particular. But they realized in time that this was not worth doing.

Interestingly, our practice shows that European systems, such as Navision and Axapta, have evolved to be much more efficient than American ones, probably because they are based on a longer accounting history and have better logic. Therefore, the development of Great Plains and Solomon, created in America, has now been discontinued, and clients are switching to Business Central and Finance & Supply Chain Management both in the world and in the USA.

After the crisis of 2008, there was a surge of interest in CRM systems. How did this hype affect the market and did CRM really become a "lifeline" for businesses?

From 2004 to 2008, Ukrainian business grew at a breakneck pace, GDP grew by double digits, and companies often didn’t even have time to issue invoices. But the crisis changed everything: demand fell, and the market realized that it was necessary to fight for the client. Then someone «smart» launched the thesis that CRM would solve all problems. A real hype around this and a real boom began.

The problem was that many people perceived CRM as a magic button or a magic wand that would generate demand on its own. In reality, CRM – it is simply a tool to support business processes in relations with counterparties, and demand is generated by marketing, quality of products and services, and reputation. Over time, the hype subsided, and a sober understanding came. But it is interesting that in this segment, until 2022, the Russian Bitrix24, built on the 1C core, dominated. Now the CRM market is overflowing with various systems, but many customers continue to choose them only by price, without delving into functionality. This, in turn, again leads to a loss of money and time, because cheap products have limited functionality and this leads to higher costs for routine work of people, which leads to higher costs than the cost of more expensive systems with advanced functionality.

How do you see the future in 5 years? Will artificial intelligence eat up the entire enterprise software solutions industry?

Now we are witnessing the formation of global ecosystems: Google, Amazon, Microsoft, Apple. My vision is this: in the future, it will not be individual products that will compete, but ecosystems. Microsoft's advantage here is obvious now: they have the widest range of products that exchange or operate on the same data. If you have everything in one ecosystem, the cost of ownership is much lower, because you don't have to spend resources on complex integration of different systems.

As for artificial intelligence, Microsoft is already building Copilot almost all of its solutions. It will be impossible for local developers to catch up with such billion-dollar investments. However, I do not believe in an «AI apocalypse» for developers. So far, AI helps only in personal productivity - a programmer writes code faster, a marketer - prepares a report or action plan faster, etc. But implementing ERP or CRM is group productivity, these are complex business processes where human intelligence, consultant experience and understanding of business logic, subject area, and legislative requirements remain key. The scenario where AI keeps records and configures itself still looks like some kind of fantasy.

What is Innoware's mission today and what advice would you give to Ukrainian businesses that are still hesitant about switching from 1C to Western systems?

Our mission has remained unchanged for 25 years: to help companies implement the latest technologies to increase efficiency and competitiveness. We consciously make efforts to reduce the entry threshold for businesses to implement modern information technologies for company management. For example, based on the Microsoft Dynamics 365 Business Central ERP system, we have developed package solutions: "IW Finance+", "IW Trade", "IW Personnel and Salary", available for small and medium-sized companies – the cost of which is from 1200 to 1900 USD. These are ready-made templates: take them, transfer data from 1C or BAS and work.

Ukraine wants to join the EU and NATO, which means we need to outperform our Western competitors to be able to compete with them. We need to "activate" the country, attract investment, and build transparent business. I am an optimist and believe that our society is strong enough to go this way.

Much depends on how effectively we fight corruption, implement the rule of law, and how quickly we adapt our legislation to international standards. And here, I think, the attraction to the EU has a very strong influence - it is really felt. For me personally, this attraction appeared when the USSR collapsed, somewhere in 1991. The only question is the pace of implementation - how quickly we will be able to move.

We have a great example – the Czech Republic. This is truly an example of how reforms should be done. Poland is the same. Hungary was also one of the first countries to «shoot»: massive investments were made there, factories of large corporations were opened. This is a good lesson: global changes regarding the rule of law and the implementation of fair and effective laws are not a one-time action, but consistent work for years to come.

And for now, we, the entire country, have one task and one common goal – to work hard, strive for perfection and efficiency in order to defeat a larger aggressor.

The original article at "KO IT for Business"«