Today, many forward-thinking businesses outsource software development in Vietnam, India, China, Philippines, Ukraine, and other nearshore destinations. At this step, the following question arises: what is the best country to outsource software development?
The increasingly fascinating software outsourcing industry nowadays, which has brought a lot of attention from small and large organizations all over the world, is of course quite interesting. Thus, many contentious stories have always been based on differences in pay, level, working style, culture, or even a time zone. Is that a big obstacle to outsourcing software, or is it only an intriguing and exciting range of differences. Below, you can see the top software outsourcing countries, compared by their rates, market size, and other factors.
Were you aware that 'technology titans' as IBM, Microsoft, and Intel are all outsourced in Vietnam? You may question why this country has been picked. CIO shared that, probably a key element with the cost of product development being 90% lower than in the US is the pricing of services. Vietnam's software industry has been considered an appealing choice for cost reduction compared to other outsourcing software-development nations.
We tend to believe that low-cost offerings are invariably linked to poor quality. Although it is quite a reasonable judgment, the situation is different when it's about Vietnam. There are a lot of highly skilled and experienced software engineers that offer their services for affordable prices.
Ho Chi Minh City has been named the new 'tech innovation hub' and a center of outsourcing software development because of not only the prices but also due to the high quality of software solutions provided by local companies.
The new driving force for the Vietnamese economy has been developed with offshore outsourcing software. Probably this is why Vietnam's government pushes technology progress actively and promotes its foreign investment economy. Vietnam has continued to invest in education during the previous decade. In addition, thanks to the good fortune of having a group of workers in the 'golden age' to reap many achievements thanks to their youth, each year, there are approximately 25,000 qualified engineers studying in universities.
Local legislation and public policy promote a favorable commercial and foreign investment climate. In addition, Vietnam software development firms pay great attention to the protection of IP, so you can be sure you do not subject your software product to the dangers involved in the violation of IPR.
When companies are planning on shifting their projects overseas, China is the second most favored location. It has a number of software development firms with the fastest rising growth and annually produces over 4.7 million technology graduates. China scored top in the theoretical study of the nations most eligible for HackerRank's "Olympic Programme".
China has raised the quality of its services substantially in recent years and has established a better political and commercial climate. This makes the country very competitive in the market for IT outsourcing.
How about the cost of producing software? While the cost of Chinese engineers' software development services is significantly less than in other nations, we have seen some pricing rises during recent years.
Diverse games and software goods, including 360 Camera, Baidu and Alibaba have demonstrated the excellence of their local IT development, which have today become worldwide success and are leading in many nations. China is also renowned for highly competent hackers (white and black hats) who offer outstanding support to corporations and governments throughout the world, or, on the contrary, cyber security concerns.
80% of European and American companies report that India is the leading foreign exchange company, according to a recent research. In the same vein, 50% of Fortune 500 businesses prefer to outsource their software development to Indian IT companies, the National Association of Software & Services Companies (NASSCOM).
There are also some intriguing data that reflect that India is likely the greatest place for software development outsourcing. Even global investors, like the Alibaba Group, Foxconn, Softbank, and Sequoia, are increasingly investing in the ecosystem of Indian start-ups. IBM also already has more than 100 Big Data and IoT companies in India.
There are many brilliant software developers, well-educated, and driven by innovation in this country. It may also be corroborated by the fact that over 7 million Indian college graduates annually and 55% desire to be employed by startups, according to StartupIndia.
In the field of IT in Asia, the Philippines, another name is also highly powerful. Recently the Philippines acquired fame, many firms worldwide have decided to expand the software development of Philippines, because it provides a wide range of software developed talent and software at very affordable costs. The outsourcing empire was valued at 23 billion dollars last year.
One of the greatest advantages of Software outsourcing in the Philippines is that it gives a high level of English skills in conjunction with engineers. More than 92% of the local population really speaks English. Frankly, communication is essential to the success of any project, particularly as regards the design and development of software. Excellent professional abilities in English in the Philippines have become one of the main reasons many companies in the world would prefer this nation to outsource the development of their software.
The Philippines also has a specialized STEM high school system and has started incorporating severe educational reforms during the last few years. These factors confirm that the Philippines is now investing much resources and effort into bringing up intelligent and open-minded professionals.
According to PSIA (Philippine Software Industry Association), the Philippines has about 190,000 developers, and the number is expected to grow up to 210,000 by 2022. The value of the software industry in the Philippines is already nearly $3.2B, and it is predicted to increase to $5B by 2020.
Ukraine has also been one of the most popular outsourcing locations for software in recent years. The IT sector of Ukraine is developing as quickly as ever. There are now in Ukraine approximately 192,000 IT experts working in more than 1,600 outsourced IT firms. In Ukraine, moreover, over 80% of software engineers speak decent English, and local firms encourage them to acquire English by offering their staff free language classes.
Ukraine's biggest IT skill pool is one of the most important benefits. Many highly qualified specialists provide relatively low-price software development services. Ukraine has a good history in education and every year generates more than 16,000 ICT graduates. Moreover, about 23,000 STEM-based students graduate. Ukraine has been listed as the top one in CEE by the number of graduates who join the workforce market.
All these factors have made Ukraine one of the most popular software outsourcing destinations. Global Sourcing Association (GSA) has even named Ukraine as the Offshoring Destination of the Year, while Gartner has listed it among the Top 30 offshoring and outsourcing destinations in the world.
Outsourcing Software Development - When Demands Are Bigger Day By Day
Ever more popular yearly are outsourcing software development projects. Due to the increased demand today, the worldwide IT outsourcing industry will expand in 2022 by up to US$ 481 billion in terms of statistics, as defined by the Statistics MRC. The same source claims that Eastern Europe and the Middle East account for the biggest percentage of income. A large-scale study was carried out called Statistical Brain survey with CEOs and CTOs of top businesses in the United States, with around 43% of U.S. corporations employing software development outsourcing services.
It can be said that many companies around the world benefit from offshore outsourcing services. To explain this, there are two typical factors that determine the importance of outsourced teams:
- Firstly, IT outsourcing gives you within the company access to a highly trained workforce worldwide. The second main reason for this is the reduced development costs. Outsourcing allows businesses to save up to 30% on average in costs.
- Secondly, it allows for improved risk management because software development activities can be partitioned.
There are many concerns around outsourcing, but the truth is that many global brands and organizations outsource software development because it makes a lot of sense for them. Software outsourcing helps companies save nearly 30% of the development cost and get high-quality services. It also allows you to find talented people who can help you deliver a new project in a short time and focus more on your business.
Below, we have introduced five great IT outsourcing destinations that can offer clients high-quality software development services, collaboration with skilled IT professionals, favorable business climate, and affordable prices. We hope that this shortlist will limit your search to the best countries to outsource software development and help you find the most appropriate one among them.
About the Author
This article is contributed by Thanh (Bruce) Pham, CEO and founder of Saigon Technology Solutions.
The company are a well-established Agile software outsourcing company in Vietnam with a mature software development process and proven track records of repeated customers all over the world, mainly in Europe, Australia, Singapore, North America.
Their customer base extends to Australia, Singapore, Canada, USA and France, besides Vietnam and includes highly renowned members of their respective industries, such as DMI Inc., Standard Chartered Bank, RSM Singapore, Stone Forest, Payroll Serve, Abbott, Kaercher to name a few.
For inquires you can reach Thanh Bruce Pham at email@example.com, and/or Skype: tienthanh.pham