Top Software Development Outsourcing Destinations 2021
Software development outsourcing is thriving. The increased demand for digitalization and innovative products allowed the information technology outsourcing market to reach $66.5 bn in 2019, and experts predict further growth. This is not surprising, because outsourcing software development is much more profitable both in terms of expertise and in terms of price. However, in such a rapidly growing and changing environment, choosing a business partner that meets all your requirements can be confusing. Especially when you don’t know where to start. Let’s fix it. In this article, we will look at the top software outsourcing destinations to find out which countries are the best to develop software products.
Software outsourcing market overview
Let’s start with the market overview to better understand all benefits and pitfalls of outsourcing. The outsourcing market has been developing for many years, and the Covid-19 pandemic has only intensified this. According to AppDynamics’ report, 95% of respondents said their organizations have changed their technology priorities during the pandemic following the Covid-19 outbreak. The increased demand for digitalization has forced companies to re-prioritize their tasks and find a fast and efficient solution for technology adoption.
But why do companies outsource? According to the Deloitte Global Outsourcing Survey 2020, the main reason for outsourcing software development is cost reduction. Assembling an in-house team includes the costs of recruiting, providing jobs and a social package, nurturing expertise, which will cost you significantly more. By outsourcing the development of a software product, you pay for the hours of work of a certain specialist only when his services are needed. Moreover, when outsourcing, you are not limited by location and can choose the most reasonable rates, which differ depending on the region. Delegating labor-intensive tasks to service providers allows you to reduce the internal workload of the company and focus on core business goals, optimize resources, and gain more flexibility.
Learn how to properly write requirements for your project by reading What is a Software Requirements Specification and How it Should Be Written?
Top software outsourcing destinations
According to statistics, the most popular outsourcing destinations are Europe, Asia, and Latin America. Let’s take a closer look at the IT environment of each region to determine the best countries for outsourcing software development
Europe
Despite the fact that Europe is one of the main consumers of IT outsourcing services, it is also a popular outsourcing destination. The thing is that developers’ rates are very different in the West and in the East. Therefore, many entrepreneurs from Germany and the UK, for example, outsource software development to colleagues from the Eastern region. According to the State of European Tech 2019 report, the European software engineering pool counted 6.1m developers.
According to statistics, the most popular outsourcing countries in Europe are Poland, Ukraine, Romania, Czech Republic, Hungary, Bulgaria, Belarus, and Croatia.
Ukraine
Ukraine is a well-known country for outsourcing software development all over the world. Projects such as Grammarly and DepositPhotos were created by Ukrainian engineers. Plus, such international giants as Oracle and Google have opened their R&D centers in Ukraine. According to the IT sector report of 2019, Ukraine has become the largest exporter of IT services in Europe.
The information technology market in the country is constantly growing and this is not surprising. Around 39 Ukrainian tech universities generate about 30,000 tech specialists annually. And the market has good government support. In total, there are close to 200,000 IT specialists in Ukraine, according to Escadra. In Ukraine, you can find a specialist of any technology stack and seniority level. Besides, compared to the USA and Western Europe, there are reasonable hourly development rates. Convenient time zone, open culture, high level of professionalism, all this makes Ukraine one of the top software outsourcing destinations.
Poland
Poland has a mature software development market. International companies are happy to open their R&D centers here, as did Google, IBM, and Motorola. The total number of IT specialists in Poland is 295,300, and annually, about 70 thousand students study Computer Science. Although the software development market in Poland doesn’t have such impressive growth rates as Ukraine, it continues to develop and is expected to reach $2,834.2 million during 2021, according to Statista.
Despite the fact that development rates in Poland are not the lowest, they are still relatively low when compared to Germany, UK, or the USA. In addition, the country has a convenient geographical location almost in the very center of Europe. A favorable political environment, strong economy, and highly qualified technical resources contribute to Poland’s success in the outsourced software development market.
Hungary
The pool of IT specialists in Hungary is not as large as in Ukraine or Poland, with only 80,000 specialists. However, the region is very popular for R&D centers due to its favorable business environment. So, according to statistics, most of the income from the technology industry is generated by enterprises controlled from abroad.
IT outsourcing in Hungary is popular due to several reasons. Firstly, Hungary is a member of the European Union, which means that its services are fully in line with European standards. This makes it easy for other European companies to hire and interact with Hungarian professionals. Second, Hungary provides really high-quality software development services and has a stable market. However, in a certain sense, the country’s IT market has reached its maximum, and if you are looking for a long-term partnership and an active community, Ukraine has more potential.
