Jul 14, 2022
about 9 min read
Top Countries for Software Outsourcing Development in 2022!
Offshore outsourcing steals the show and becomes the hero for most companies in need of software development solutions. Already the trend of outsourcing prominently features in most businesses, and to an extent, it is becoming a near-necessity in this age of globalization.
To that end, we are set to explore the major destinations that are emerging in 2022 as the most suitable countries to outsource for software development services.
We aim to establish which economies offer the vibrancy and energy necessary to provide a fledgling outsourcing workforce. Here’s a more in-depth look at what sets each destination apart in terms of the client’s outsourcing expectations.
Table of content:
- EASTERN EUROPE
IV. Czech Republic
- NORTH AMERICA
- MIDDLE EAST
Asia is practically the ‘tiger’ in the outsourcing software development jungle, and India remains the best place in terms of scale and availability of skills. The latest Tholons’ top 100 outsourcing countries further indicate China, the Philippines, and Vietnam are leading the pack from Asia.
Here’s an outlook of the overall destinations in Asia pegged as having the best services for software development solutions.
India is renowned as an inexpensive outsourcing software development destination with a large pool of low-cost software developers and programmers. Other than the little expenses of $15 – $30 per hour, the Indian urban populace is additionally profoundly taught and semi-talented in up and coming specialized angles..
Their longtime experience in delivering IT services has also led the government to acknowledge the market growth in IT outsourcing software development and offers incentives in the best way they can.
Also, the nation boasts of a vibrant technical background that has seen plenty of youths turn to acquire programming skills to an advanced level. TopCoder rating indicates India as the 9th most advanced country in terms of Programming skill rankings across the outsourcing software development locations.
Despite IT outsourcing being fairly young within Vietnam (20 years), the country is turning out to be a small but vibrant powerhouse for technology and software development outsourcing.
Vietnam has been the key player in the business process outsourcing (BPO) and IT outsourcing (ITO) industries. BPO market has grown 20% to 35% annually, with a revenue of 2 billion USD in 2015.
Being ranked at the 12th position by Topcoder, most clients find out that the country has a highly adaptive approach to upcoming software and tech developments. Some key players are FPT Software, TMA Solutions, Golden Owl Consulting, CMC Software,...
Read more: Top 5 IT Outsourcing companies in Vietnam
The Philippines has also undergone a quiet revolution which has reshaped the outsourcing software development business to meet the demands of rising industries. The nation is culturally similar to most western countries while also boasting of being the third largest English-speaking nation in the world. The 94 percent English literacy rate coupled with a robust university system produces over 47,000 graduates who are technically proficient in IT and other technical, specialized areas.
Further, the Philippines software developers are costing a fifth of the cost of developers in western countries plus boasting of over 20 years in offering onshore and offshore outsourcing software development industries. The business process outsourcing industry (BPO) has a record rate of growth more than 25 percent a year in just the past decade.
Another talented player in the outsourcing software development sector is Thailand. The average yearly salary for an employee is 1,160,000 THB (Thai Baht) or 35,871 USD, according to the August 2021 exchange rate. An IT Project Manager with over a decade of experience in the US would typically have an average annual salary of $102,362. On the other hand, Thai IT Project Managers with that experience earn about 19,20,000 THB/year ($59,373).
The state has an excellent infrastructure with a robust university and college system to boost the IT offshoring workforce each year. The improving use of the English language has also made Thailand heaven for foreign investors seeking IT services such as mobile application development, web design, IT consulting, digital marketing, software quality assurance, and testing.
There is a strong indication to China offering some of the best tech and IT services not only in the region but also across the globe. Already a PwC report found that a growing number IT companies are setting up in China to take leverage of the knowledge base in UI, full-stack, mobile, enterprise and game software present within the country. The market size of the efficient software development services is estimated to be over 1,3 US million dollars in 1 July 2022 according to the IBISWorld. The ranking offers a glimpse into China’s initiative to develop educational, training and other supportive infrastructure to help promote information technology and other tech-related services industries among its population.
To sum up to the best markets for outsourcing software development in Asia, India remains the most frequent world outsourcing destination. The country offers an incredible infrastructure with experienced companies focused on the software outsourcing niche. But we also have to recognize that China is a nation offering keen competition to India especially with its technological innovation being its strong point. The past few years, in particular, saw the government sufficiently build the technology industry to become a competitor in outsourcing software development services. Also, new entrants such as Vietnam and Thailand are also becoming a haven for growing talent pools of software service delivery.
Eastern Europe is emerging as a reliable outsourcing powerhouse regions preferred by companies looking to be cost-effective in regards to their software development outsourcing options. A 2017 Global Services Location Index survey by A.T Kearney indicates five countries from the region among the Top 20 IT Outsourcing software development services destination.
Ukraine doubles up as the most promising country offering excellent software outsourcing services. The state does have a skill pool of almost 166,000 IT and Software professionals in 2021 versed in the latest technology capabilities. Moreover, the education system boasts of graduating over 30,000 students in IT-related fields from the local universities. Already large corporations and companies such as Intel USA, Microsoft, Nokia, and even Reuters are importers of Ukraine’s software services. The operational, cultural and financial advantages make Ukraine a leading software outsourcing destination for companies looking for an excellent ratio of quality and price.
Corporations have also begun looking closer to home with outsourcing solutions and Romania has is offering continuous competition to developed countries like Poland, Bulgaria, and most of all Ukraine. The country boasts of over 131,000 Romanians working in the local outsourcing sector, contributing to almost 20% of the outsourced software development workforce in Central and East Europe. Romania’s software development process is also evident in the number of international companies like Dell, IBM, Oracle, Microsoft and Ubisoft having offices in the nation.
The immense talent pool of software development professionals within Poland encompasses perhaps everything that a company would want in an outsourcing base. The country boasts of having a large variety of IT labor force with a strong background in software development skills. Poland also ranks among the first Eastern European nations with cutting-edge technologies and affordable programming experts.
IV. Czech Republic
The Czech Republic is home to a high-ranking IT outsourcing sector that boasts of attractive software development skills, availability and financially affordable solutions for companies. Successful international corporations like IBM, NetSuite, Honeywell, and Google are known to have their office sites in the IT-developed country. Just like these large companies, small and medium enterprises can also leverage Czechia’s skilled IT workforce, language proficiency, and quality policies for their software development needs.
Despite its small size, Hungary has shown significant strides in the growth of its IT outsourcing sector over the last few years. Most recent data indicate that the country’s local IT market engages about 150,000 IT specialists in 2021, with software development being the most vibrant industry. A good indication is perhaps the many R&D centers setup in Hungary by international companies including Siemens, Nokia, Ericsson, etc.
North America is also emerging as a preferred location for IT outsourcers seeking software development services with increased automation and digital transformation witnessed in the region. The need for U.S outsourcers to be close to the vendors is perhaps what is making the area an attractive option for service delivery. From 2012 to 2016, Everest Group estimates rise from 25 percent to 63 percent in the outsourcing of digital services.
The USA is perhaps the world’s largest technology hub due to several reasons. For starters, the IT and software developers of the region enjoy the apparent advantages of a perfect cultural match, English language skills, U.S laws, and regulations. The access to well-respected universities and colleges within the region ensures the IT talent pool remains broad enough to encompass different IT related fields. The area also hosts plenty of companies that are global leaders in the technology sector. IBM, Apple, Microsoft, Google, Nokia, and many others have made different cities within the USA their bases for operations.
Canada also seems to be catching up with the IT outsourcing craze. Generally, most of the nation’s clients are near-shore customers from the USA and to a small percentage, software development outsourcers from Europe. The Ontario region, i.e., Toronto is perhaps the standout area that is becoming the tech hub for hosting the IT and software development vendors. Culturally, most western clients consider Canada as having a ‘laid back’ reputation, and this concerns customers especially when it comes to delivering the software projects in time.
Both the USA and Canada boast of having a sizeable market for offshore software development services. While the level of skills and education is unquestionable, there is a need to bring down the rates to increase the number of outsourcing clients available. The significant local competition for talent, premium rates, and labor shortage has not, however, stopped the USA software developers from becoming some of the most sort-after professionals in the field.
The IT market and software, in particular, are experiencing a huge boom and demand for services in the industry is increasing. Currently, Israel and the wider MENA region (UAE, Qatar, Kuwait, and Saudi Arabia) are becoming hubs for web design and software development services that are essential for many businesses, be it a startup or big company. Israel, for instance, stands out as a leading outsourcing software development destination for its welcoming environment that has seen technology companies getting lured by the incentives and technological advancement.
Israel confidently ranks number world in the offshore software development outsourcing sector within the Middle East. Its political stability, conducive business environment, and innovative IT services make it a strong base for world-class IT and software solutions. Some of the world’s best technology outsource providers are setting shop here, hence anticipating much tech growth.
Africa is a potential frontier for IT outsourcing. As the rest of the world’s IT service sectors continue to mature, Africa scenario seems to be only beginning to blossom as a burgeoning market for outsourcing good software and web products. The potential is indeed huge with the continent's young population expected to double by 2050. Already international tech brands such as IBM, Microsoft, and Facebook are making Nigeria, South Africa, Egypt, Morocco, and Kenya their hubs to breed software development. And with the number of countries gaining digital awareness in Africa increasing, there is an increasing transformation of the IT services from the continent.
As you can see, there are plenty of locations to outsource your software development requirements. And from our assessment, the following countries stand out as valid options for your 2019 software development needs.
While it's not outright which destination is the best, choosing an offshore outsourcing option depends on the needs of the client. From location to costs, political stability, and technical capabilities, there are different aspects to consider and weigh before choosing the right vendor. Ultimately, the software vendor should be an experienced partner to enable the establishment of a long-term working relationship.
Golden Owl developers are at the epicenter of the IT industry in Vietnam. Our skilled and experienced teams can work on any software development project that you might need, as proven by their high customer retention rate. Feel free to explore the website to learn more about our offerings and technology solutions.