| 11 min read

Best countries to outsource software development in 2020: Top 9 destinations

Alex Morgunov , Project Lead

Outsource development is trendy nowadays: lots of companies prefer to save their development costs and find a remote team rather than spend on in-house development.

According to the statistics, the outsourcing countries’ market is expected to grow at $481 billion by 2022 globally.

When aiming to optimize the development budget in 2020, it is not even a question to outsource or not. The big question is what are the best countries to outsource software development?

Below you will find the comparison of the best countries to outsource software development this year.

What does it mean to outsource software development?

Software Outsourcing is the practice of cooperating with a third-party company, i.e. outsourcing development agency, that manages the whole product development process or some certain tasks involved in software product development.

Why choose outsourcing software development?

Yes, the cost of offshore development is the first perk to mention. But sometimes expertise is the holy grail.

  • The perks of outsourcing rest on three pillars:
  • Reduction of product development costs;
  • Ease of finding the necessary expertise;
  • Fast product launch.

1. Cost flexibility

Different economies naturally offer different rates for software development within each software outsourcing company. Let’s face it – it’s not a surprise when you find lower prices for the same expertise in countries with weaker economies.

At the same time, it is worth considering that artificially low prices are still likely to result in poor quality no matter the location we are talking about.

2. Expertise

It’s not that remote developers guarantee you a better expertise. But offshore development provides a much bigger pool of talents. 

When you’re looking for in-house developers, you are restricted not only by knowledge and experience requirements but also by your company’s location. And the circle of developers narrows down even more.

When outsourcing your software development, you literally have the whole world to choose from: any technologies, any industry expertise and almost any needed skills.

3. Fast start, fast launch 

No need to recruit not only saves good money, but also a great deal of time.

In most cases, your offshore agency has all the recruiting jobs done and only needs to form a team according to the project requirements. All you need is to represent your idea, discuss the tech stack and form a scope of work. No more preparations needed – you can jump to development.

Word Top Outsourcing Countries

The most popular locations to outsource software development worldwide are Central and Eastern Europe, India, China, and some Asian countries. 

According to CNBC research, the best countries to outsource software development are those with developing economies:

  • Argentina – 17%
  • Thailand – 12%
  • Mexico – 10%
  • Egypt – 10%
  • China – 10%
  • Pakistan – 8
  • India – 7%
  • Turkey – 7%
  • Saudi Arabia – 7%
  • Nigeria – 7%

Eastern European Countries

What does Eastern Europe mean for outsourcing? According to A.T. Kearney’s report, the software development industry in East Europe stands for high-quality, reasonable prices, great communication culture and convenient time zones.

Here at Sloboda Studio we believe that probably the best offshore software development region is East Europe and one of the best outsourcing countries is Ukraine. We are admittedly a little biased-but that doesn’t mean we’re wrong.

Pros:

  • Affordable prices. According to UpWork.com, Eastern European rates vary from $25 to $50/hour.
  • Large talent pool. At the same time, local developers often have a university technical degree: for example, in Ukraine alone, there are 16,000 technical graduates per annum.

Cons:

  • Different time zones with a few hours of overlap between Europe and America. Though this isn’t always a pitfall: with a head office somewhere in North America, you can wake up by the end of European day so your team can present you the completed work.
  • Lack of communication. Yes, it is much easier to communicate with the your-time-zone team. However, with all those calls, video chats, and daily checks, your collaboration can remain clear and up-to-date.

Poland

Same as Ukraine, Poland is located in Central Europe, but historically has been considered to be a part of “Eastern Europe”

According to the recent report, Poland has more than 100 companies with 255 thousand software specialists.

At the same time, last year’s Kearney Global Services Location Index research rated Poland as the twelfth most attractive outsourcing location. According to the report, Poland offers a large pool of software developers and is budget-friendly at the same time.

  • Prices: According to Clutch and Upwork, Polish offshore software development rates vary between $25 and $100 per hour. The lowest rates like $25-50 can be found in smaller cities like Katowice, and the highest ones are located in large tech centers as Warsaw and Krakow.
  • Popular programming languages: Java, SQL, Python, C++
  • Top Tech Cities: Warsaw, Kraków, Wroclaw, Lodz

Ukraine

Ukraine is the largest all-European country and the 44th largest country in the world. According to a report, nearly 100,000 Ukrainian programmers serve thousands of companies as the demand for an information technologies workforce is constantly growing on the global market.

According to the HackerRank survey, Ukraine takes 11th place out of 50 in the rating of countries with the best developers in the world. Gartner featured this country among its Top 30 offshore service providers.

Moreover, this country is famous for its educational system with a strong focus on the tech industry:

That makes Ukraine a great solution when you need to get great expertise at budget costs.

  • Prices: According to Clutch, you can find budget hourly rates in Ukraine, where the rates are $25-100 per hour depending on your developers’ seniority. As for Upwork, the hourly rates for the agencies’ developers are generally $20-40.
  • Popular programming languages: Ruby, Java, Python, Distributed Systems & Security Development
  • Top Tech Cities: Kyiv, Kharkiv, Dnipro, Lviv, Odessa

Belarus

Belarus is another representative of top IT outsourcing companies from 2017. According to the research, most of Belarus’s developers are included in outsourcing.

The government significantly supports the software industry: about 90% of IT companies are mostly located in Minsk, uniting 30,000 tech specialists.

  • Prices: According to Clutch, there are two leading price groups in Belarus: $25 and $25-50, and $50-100 per hour depending on the agency. On Upwork, the rates vary from $20 to $60 per hour.
  • Popular programming languages: JavaScript, Java, .NET
  • Top Tech Cities: Minsk, Gomel, Mogilev, Vitebsk

Asian Countries

According to A.T. Kearney’s 2017 Global Services Location Index report, Asian countries are among the top 10 outsourcing countries in the world.

With up to 200 software agencies and corporations and around one million employees, the Asian region is really great for outsourcing projects.

Pros:

  • A huge pool of developers and the lowest market prices.
  • Currency exchange rate. The Indian rupee has devalued against the American dollar over the past few years. Such a tendency is great for vendors who need to sign contracts for several years.

Cons:

India 

Nowadays, India is considered one of the top countries for outsourcing software development in the world. India’s population is equivalent to 17.7% of the total world population, so no wonder that it is one of the biggest outsourcing locations. According to the latest research, the Indian software industry is growing by 60% every year.

The Indian software development market has grown by more than 30% over the last thirty years and is exporting its software services to up to 100 countries. According to the Software Sector Analysis Report, Indian developers are technical graduates with high qualifications. At the same time, the Indian software market is 5 times cheaper than, for example, North America’s.

  • Prices: Indian hourly rates are about $25 according to Clutch. On Upwork, the hourly rates for Indian web development are generally $10-15 per hour.
  • Popular programming languages: Java, C++, Python
  • Top Tech Cities: Bangalore, Chennai, Mumbai, Kolkata

China

Along with India, China is the top-ranked offshoring destination. It has budget-friendly prices, and qualified developers.

Philippines

The Philippines is great because of its costs, market competitiveness, and good software background. According to the Philippines IT Market report, software development in the Philippines has become one of the more established sub-sectors of the country’s information technologies industry.

Latin America

As an A.T. Kearney Global Services Location Index study states, at least 5 of the top outsourcing countries in Latin America are popular as outsourcing destinations. In general, Latin destinations are often chosen by North American countries due to relatively low rates, minor cultural differences, and convenient working schedule.

Pros:

  • For US vendors, Latin America means small time zone differences, so it is possible to work in real-time;
  • Lower rates than in most developed countries, including Germany, Norway, Sweden, the UK, and North America: according to UpWork, Latin America’s agencies rate hourly from $25 to $100.
  • Lower cultural gap with North America and Europe compared to Asia.

Cons:

  • Great workday mismatches with European Countries.
  • Higher prices compared to usual outsourcing development rates

Argentina

Argentina often ranks as one of the most educated countries in Latin America, for example, the country takes the 21st place in the QS Higher Education System Strength Rankings. Add the highest level of English in Latin America, which is a big perk when choosing a country to outsource to.

Argentina has only a couple of hours time difference with the United States and about four-six hours with Europe. Moreover, this location is only 4 hours away from Silicon Valley by plane and is a great strategic location for software development and startup projects evaluation. No surprises that there are a lot of IT Outsourcing Companies in Argentina.

Brazil

According to the Panorama and Trends 2018 report, Brazil ranks 9th in the world for software and services, and its software market is worth almost $19 billion. At the same time, Brazilian information technologies outsourcing takes up to 50% of the Latin American software market.

  • Prices: $25-50 hourly rates for web development according to Clutch. On Upwork, the average price varies from $25 to $60 for an hour of web development.
  • Popular programming languages: Java, Python, SQL
  • Cities: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau and Londrina

Mexico

Mexico is another top outsourcing country in South America. In 2019, the country was ranked as 11th in the A.T. Kearney Global Services Location Index report.

  • Prices: $25-50 hourly rates for web development according to Clutch. According to Upwork, the average prices at agencies can vary from $20 to $50 per hour.
  • Popular programming languages: PHP, ASP.NET, Ruby on Rails
  • Cities: Guadalajara, Monterrey, Tijuana, Querétaro, Cancún

How To Choose a Country to Outsource?

There is no wrong country to outsource.

But it is worth admitting that there are wrong developers. And the wrong countries for your project.

Recommended: How to Manage an Offshore Software Development team

Know what you are looking for

Knowing the necessary tech stack or the needed expertise will help narrow down your search. You can check out niche-specific ratings on Clutch or other rating platforms and /or Google for the specific expertise in a chosen location. Note that different countries may have expertise in particular technologies. 

Draw attention to time zones

If the time difference is significant to you or the specifics of your business, choose the closer countries: these ones will have a max 1-3 hours difference with you.

If the time difference isn’t an issue for you or you know how to manage your team right, you are free to consider any geographic options.

But the truth is nowadays most companies prefer to focus on expertise more than on time zones as modern management systems minimize possible inconveniences.

Consider cultural differences

There is no wrong mentality for offshore development. But sometimes people just don’t match, thus cultural differences definitely have to be considered.

For example, Asian countries are very into long-term relationship building and tend to build trusting relationships with the potential vendor and only then to sign a contract.

Indian people tend to agree often: they would rather answer ‘yes’ to most of your questions even if they mean ‘not sure’. Is it bad? Not really. But sometimes you need to make some additional efforts to avoid misunderstandings and save time.

Latin American and European developers consider business relationships not as client-worker relationships, but rather as a partnership. Developers from these regions are more likely to give you some unpleasant feedback to warn you about concerns and issues in the most direct way than keep silent and let the project get in trouble. Sometimes it is hard to hear the rough truth and may be not appropriate for some clients.

Our Expertise

We are proud to tell that Sloboda Studio is a leading offshore development company with a number of verified clients’ reviews. We are recognized top software developers by such top rating platforms as Clutch, GoodFirms and DesignRush.

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