The State of Software Outsourcing in 2019

By Ryan Vice | Posted on May 21, 2019

Technology Trends

In the last two decades, outsourcing software development has matured into a booming industry. It’s no longer the poor man’s custom software development option; large enterprise companies are utilizing the vast talent available from all over the world. In the year of our technology overlords, 2019, there are thousands of development teams spanning the globe offering a variety of expertise and competitive rates for their outsourcing services.

To fully understand the state of outsourcing software development, you need to also understand what’s going on in the tech industry closer to home. If you read on, we’ll give you the details on the landscape of software development in 2019 and also how to navigate the ever-growing crowd of outsourcing development teams around the world.

Why is Outsourcing Software Development so Popular?

The answer to this question lies in the state of domestic software development in countries in North America or Western Europe. For companies looking for software development in their home countries, two things quickly become obvious: there is a concerning shortage of qualified developers in these countries and these few developers come at a high cost.

Lack of Skilled Developers at Home

There is huge demand in places such as the US for qualified developers. By 2026, the Bureau of Labor Statistics estimates that the IT workforce will have a shortage of 1.2 million, and the developers companies are currently hiring are usually not qualified. For instance, only 29.4% of candidates for software architect position are actually qualified for the position, and this means a lot of employers are either hiring under-qualified programmers or overloading their senior software engineers with way too much work..

High Costs

The lack of experienced developers has made the salaries for these positions explode. According to Indeed, the country with the highest average salary for developers is the US at around $108k, but Western European countries also have to pay high salaries for software developer in their home countries. For a small to mid-size startup, this is too steep a price to pay. With only a few very expensive options at home, many of these companies go abroad to find the IT expertise they’re looking for.

The Advantages of Outsourcing

Along with being a much more affordable option for companies in the US, outsourcing software development comes with several benefits you may not have considered.

Reduces the cost of an in-house team: In many cases, it’s not necessary to constantly have a team of developers on staff, and with an outsourced team, you can pay for projects on an ad-hoc basis. Many large companies even do this – hire a few people at home who will manage an outsourced development team.

Gives access to a wide talent pool: Think about it. Statistically, you’ll have a much greater chance of finding a software engineer with the required expertise and experience you’re looking for somewhere in the world than you will in the city your company is in. By expanding your area of search, you won’t have to settle for a developer who doesn’t know their Python from, well, an actual python.

Exposes you to a talent pool with a wider range of experience: Outsourcing software development teams usually come with a lot more varied or diverse experience. You’ll be more likely to find teams that have worked in several different industries and made a variety of software products. This can be very advantageous for you if you want to build a system you don’t know much about. For example, if you need a POS system built, chances are you can find a team somewhere in the world with the right qualifications and expertise.

Competitive rates: With so many teams competing for your service, you’ll see rates move in the opposite direction than they are going at home. You’ll be able to find the best high-quality custom software development at a fair price.

No Longer ‘Why?’ But ‘How?’

After seeing two decades of growth, outsourcing software development services has a market size of over $85 billion as of 2018. The question is no longer ‘why outsource your software development’ but ‘how to outsource your software development.’ There are several criteria that companies commonly use, but in general, you can decide for yourself what the requirements should be. There is no country or region that is better or worse for outsourcing than another, but there are advantages and challenges no matter where your search takes you.

As you look for the software developers that meet your preferences, keep these things in mind.

Expertise and Qualifications: Of course, make sure they have the specialization or expertise to perform the project you’re planning on hiring them for. There are other qualifications you may find more or less important depending on the scope of the project, too. These can be things such as the level of education or the amount of experience working with a company of your size or with your industry. You have the world at your fingertips – literally – so don’t settle for a team that doesn’t fit the specs of the project.

Language: This can be a huge barrier to good communication and a smooth development process. What you trade for more cost-effective developers could be a longer, more confusing product development if the team you choose doesn’t have strong English language proficiency or you don’t have a good mediator that can serve as the go-between for you and the outsourced team.

Time Difference: The farther away you get from your home country, the more problematic this can become if not managed well. A huge time difference can impede regular communication and cause the process to run longer than it might otherwise.

Also, ‘Where?’

With those criteria in mind, there are a few popular places companies go when they’re looking to outsource their custom software development.

Eastern Europe

Countries such as Ukraine, Poland or Romania are go-to outsourcing locations for companies in Western Europe or the US for a number of reasons. Paramount among them is the marginal time difference (at least for Europeans), the cultural similarities, the greater-than-not chance of finding developers that speak the same language and overall high-quality services. However, among the options for outsourcing software dev, this region is definitely the priciest.

Latin America

This region is a little less expensive than Eastern Europe and is a popular choice for companies in North America due to a small time difference. It’s not without its challenges, though. Language and cultural barriers can still be problems with development teams from countries such as Brazil or Colombia.

Asia and Middle East

Of all the regions, this one has the most affordable rates for outsourcing high-quality custom software development, but it can also be the riskiest if you don’t know what you’re doing. Political instability in countries such as Iran or Pakistan can adversely affect your project’s timeline, and other issues like a large time difference, language and cultural differences can also hurt your development if you don’t have experience working with developers in this region. If you have the know-how – or if you work with someone who does – countries such as India or Vietnam are a goldmine of custom software development at cost-effective rates.

The Benefits of Choosing Vice Software

In 2019, getting your custom application developed can seem like it comes with some insurmountable obstacles. Chief among them: getting the right team at the right price. Vice Software has created a unique structure that gives you the experience of an onshore team with the affordable rates of outsourced developers. Our globally distributed team sources talent from the most competitive markets, keeping prices low and quality high.

Vice Software also helps keep prices low through a lean development style that only builds you what you need. By focusing on giving you your minimal viable product (MVP), we can get a product in front of your users faster and save you from wasting money on architecture and features you ultimately don’t need. By utilizing modern open-source toolkits, we easily build your app once for the web and then deploy native versions the other platforms of your choosing.

We work closely with each of our clients to ensure that you get the product you’ve dreamed of at the price your company can afford. If you would like to learn just how cost-effective our services are, request a quote today. With just a little information about your project, we can give you an estimate in less time than it takes to get delivery pizza!

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