If you’re looking to outsource software development and reduce your development costs, good news: you have loads of options. No matter whether you’re in need of an expert in database systems like Oracle or Microsoft, or a team who can operate in one or more programming languages like Java, PHP, Python, Javascript or Ruby, there are hundreds, if not thousands, of potential partners for you to choose from.
Which presents its own problem: How do you find the right outsourcing partner out of thousands of potential candidates? Well, this guide will help.
In today’s post, we’ll consider why some countries are better than others for outsourcing and what to look for in an outsourcing partner before you hire them. We’ll also highlight 15 of the best countries for outsourcing software development, and providing details about each that will help you decide where to start your search. Let’s get started.
There are a few typical elements that make a country “good at outsourcing,” like being politically and culturally stable; having the right infrastructure; and having a strong cultural attitude towards work. However, in addition to those, there are a few additional common threads that can be found amongst the “better” countries for outsourcing software development and IT work specifically.
For example, your software development outsourcing partner should be located in a country that has a high regard for education. Those that prioritize and provide a high-quality public education system often also have smart and marketable workers — a great foundation for building a strong outsourcing market.
Even more important, your partner should be based out of an area that intentionally focuses on tech jobs. This pairs alongside the education component. The right outsourcing country will focus on advancements in all aspects of technology—including software engineering.
So what exactly are the best countries to outsource software development? Here are 15 to consider today.
*Note: All monetary values noted are in USD, unless otherwise indicated.
Some of the top software outsourcing countries in the world are located in Eastern Europe. These countries boast a large talent pool, an attitude that prioritizes startups and the IT market, and a deep understanding of many cutting-edge industries, including FinTech (financial technology), BioTech, and others.
Let’s take a look at the best countries to outsource software development in Eastern Europe for those who operate in North America, Western Europe, and beyond.
The Polish people offer an amazing mix of outsourcing benefits. Not only is Warsaw a tech hub, but Poland’s educational system prioritizes software development projects and learning.
Moreover, it provides more outsourcing services all the time: “Poland’s revenue in the IT outsourcing sector grew steadily through the pandemic, from $2.2 billion in 2019 to $3.1 billion in 2021,” explains Time Doctor. It’s slated to continue doing so well into the future.
For a long time, Ukraine has been considered one of the best countries to outsource software development. The Ukrainian people are smart, well-educated, and often proficient in other languages.
Research shows that “Ukraine ranks first in the CEE region for the best price-quality ratio.” Plus, outsourcing to Ukraine provides more competitive rates and a larger talent pool in order to match business needs and requirements.”
Even current events haven’t slowed Ukraine’s outsourcing market down much. According to Statista, “Revenue in the Segment IT Outsourcing is projected to reach $1.07 billion in 2023” and “to show an annual growth rate (CAGR 2023-2028) of 16.64%, resulting in a market volume of $2.32 billion by 2028.” That’s more than double, so this is a good place to send your business.
The Czech Republic has a very friendly outsourcing climate. It has an S&P credit rating of AA-, and offers a low-cost, highly skilled talent pool that appears to be especially talented in cybersecurity – ideal for companies that are looking for software development assistance.
The Czech Republic also offers a workforce that speaks a variety of business languages, including English, Russian, and German, and a working population of 6 million people.
When it comes to outsourcing, the Romanian people are at the front of the herd. “About 1.5 percent of the active population in Romania is working in outsourcing,” reports Business Review as of 2018. In total, this workforce comprises “a total of 125,000 employees that generates an income of EUR 4 billion.” In US dollars, that’s roughly to $4.3 billion earned from outsourcing each year.
Today’s numbers are higher, with a growth rate of more than 13 percent projected between 2023 and 2028. Revenue alone is projected to reach $364.60 million in 2023 and $674.50 million by 2028, according to Statista.
Anyone looking for a lucrative and easy outsourcing destination would do well to search the Asian continent. Countries such as India, China, Taiwan, Vietnam, and the Philippines typically offer a cost-effective labor force, with individual contractors quoting uniquely affordable development rates.
Much of the Indian population is well-educated and tech-forward as well as democratic, making it very business-friendly. Software development outsourcing companies here offer low-cost assistance for a variety of IT tasks and development projects. India’s educational system, combined with favorable government policies, makes it easy for businesses from the US, Europe, and other parts of Asia to leverage Indian companies for offshore software development projects.
“Revenue in IT Outsourcing is projected to reach $8.81 billion in 2023,” says Statista. Moreover, “Revenue is expected to show an annual growth rate (CAGR 2023-2028) of 17.92%, resulting in a market volume of $20.09 billion by 2028.”
Another of the best countries to outsource software development, China has a booming population, a large university system, and a distinct cultural focus on technology. Although China’s politics may make it difficult (or impossible) for some businesses to strike an outsourcing deal, those that can will see major time and cost savings.
Current statistics show that “The China business process outsourcing market size was valued at $15.03 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 11.3% from 2022 to 2030.” Favorable tax structures, lots of IT infrastructure, and investment in modernizing communications will all add to its value in the future as well.
Taiwan is a great place to outsource software and IT tasks, and the research backs that up. Statista reports that “Revenue in the Segment IT Outsourcing is projected to reach $2.99 billion in 2023” and “Revenue is expected to show an annual growth rate (CAGR 2023-2028) of 11.23%, resulting in a market volume of $5.09 billion by 2028.” As such, we can expect Taiwan to keep growing and providing more outsourcing potential over the long haul.
Vietnam’s low-cost labor force is a dream for software development companies that are looking for expert outsourcing partners. With more than 50,000 information technology businesses based out of this relatively small country, Vietnam has embraced a highly technological culture, and offers top-notch education systems and infrastructure. On top of all of this, local governmental policies and friendliness toward international business make it easy to get started here.
With all of this in mind, it’s easy to envision Vietnam’s BPO market exploding in the coming years. While revenues in the country’s IT outsourcing market are projected to reach $590.4 million in 2023, Vietnam is expected to show an annual growth rate of an incredible 16.77%. The result: a market volume of $1.2 billion by 2028
The Philippines has cornered the market in outsourcing of all types — IT outsourcing included. The country’s emphasis on education, paired with intentional investments in infrastructure, have contributed to a boom in software developers and programmers in the workforce.
According to Statista, the Philippines’ BPO industry — currently comprising more than $150 billion annually — has been strong and steady for several years, and is projected to experience an annual growth rate of 9.03% through 2028.
Latin America offers much in the way of outsourcing, specifically in terms of cost-effective labor and time zone benefits. When it comes finding programmers for IT and software development projects, the following two countries are at the top of the list.
Argentina is a highly urbanized country that enjoys a cost of living that’s roughly 85% lower than that of the US. This means educated workers have low-cost access to Internet and telecommunications services, and offer software development rates that are significantly lower than those you’d find here at home.
Argentina has seen year-over-year growth in the software and IT sector, with more and more workers joining the field on a steady basis. However, because their GDP is so much lower than that of other countries, you can likely find quality partners who are willing to offer excellent rates.
Brazil has much in common with Argentina when it comes to language proficiency, education, and affordability. Of the best countries to outsource software development, Brazil rises to the top for its emphasis on educating workers so they can fulfill international BPO niches.
Its industry statistics reveal that, although it isn’t growing its BPO sector quite as quickly as some other countries, it’s still expected to increase by an annual growth rate of almost 6 percent over the next 5 years. In other words, no matter how much outsourcing you throw at Brazil, it will rise to the occasion.
While other regions around the world may quickly come to mind when considering outsourcing, Africa and the countries within shouldn’t be forgotten. Here are two countries that have well-earned your consideration for outsourcing projects within the IT industry and for major web development projects.
Outsourcing companies based out of South Africa do especially well due to “advances in technology, continued innovation, and intensifying competition, a trend that is expected to continue over the forecast period,” according to Grand View Research. While South Africa does offer several call centers, these advances apply equally to the growth the country is experiencing in software development and IT outsourcing.
According to fact, the BPO market in South Africa is indeed thriving with a market “valued at $1.4 billion in 2019” that “is expected to grow at a compound annual growth rate (CAGR) of 13.2% from 2020 to 2027.”
Egypt has shown itself to be innovative and technology-forward since ancient times, when it was a center for medicine, scholarship, and construction. Today’s Egypt is no different. School systems have been investing in STEM (Science, Technology, Engineering, and Math)-based curricula, leading to an influx of educated workers for various areas of IT outsourcing.
And according to statistics, offshore development is shaping up for growth: “Revenue in the business process outsourcing segment is projected to reach $0.68 billion in 2023” with “a market volume of $1.30 billion by 2028.”
While there are several USA-based outsourcing options available for supplementing your in-house development team, today we’re highlighting US neighbors Canada and Mexico. These two countries pair excellent information technology (IT services) with affordable hourly rates and a majority of workers who speak fluent English, making them ideal choices for software development outsourcing.
Canada offers considerable opportunity to businesses in other countries that are looking to outsource. The nation’s large, highly educated population, paired with governmental policies that are favorable for software development companies in other countries looking to offload software tasks, makes it an ideal solution for outsourcing IT.
As Statista explains, “Revenue in the Segment IT Outsourcing is projected to reach $10.39 billion in 2023” and at its annual growth rate of nearly 11 percent, should result “in a market volume of $17.31 billion by 2028.”
Mexico is absolutely one of the best countries to consider for outsourcing software development. Between the country’s geographic proximity to the US, the lower cost of living that enables affordable rates, and the educated urban population boasting more than 700,000 software engineers within the nation’s workforce, there’s really not much left to ask for.
Of course, knowing which countries to outsource to in theory and which will work best for you are two different prospects. Let’s take a look at how to choose.
As we mentioned earlier, finding the right outsourcing partner means narrowing your search to the right countries ... but where does one start? Here are a few tips to help you narrow down your choices for the best countries to outsource software development.
Cultural differences often impact business dealings directly, and while some cultural differences are easily maneuvered around, others may present more significant challenges for your partnership. For instance, if you’re specifically looking for a nearshore partner that will operate within your standard 9 to 5 business hours, you probably won’t want to sign a contract with a business that the country known for taking mid-afternoon “siestas” right in the middle of your work day.
An outsourcing partner’s costs will tie directly in with the local cost of living. Generally speaking, the lower the cost of living, the better price you can expect to pay.
When picking which countries you’ll want to consider for your outsourcing partner, take a look at your budget, then review cost of living data in various countries. This can help you narrow down your list by removing some of the likely most expensive countries for outsourcing.
Another way to focus in on the right country for your outsourcing partnership is to consider your collaboration preferences. Do you want your partners to be available during your own work hours, or would you prefer to send assignments over at the end of your day, then come back to work in the morning to find them fully completed?
Your answer will clearly show your preference on time zone differences. If you want a partner that you can communicate with immediately during normal work hours, you probably need to focus your search on nearby countries. But if you want to hand work off to be done “overnight” (your time), then a partner on the other side of the globe is your best bet.
Language barriers are known hurdles in business, so be sure to consider the official working language in each country you’re considering. For example, if you communicate in English, you’ll want an outsourcing partner with a high level of English proficiency. When bringing on an entire team of outsourced workers, it’s often enough for your direct contact to speak your own language and communicate with their team in the local language; however, for tasks that require sharing guides, instructions, or other resources, it’s may be worth your while to find a partner who speaks (and understands) your own language.
As you can see, businesses looking to outsource have many options when it comes to sending IT and software work to other countries. From cost savings to better coverage over the 24-hour cycle, offshoring and nearshoring can hugely benefit your organization.
Luckily, when it comes to the best countries to outsource software development, you have quite a few choices. Finding what works for your organization in terms of expertise, time zone, culture, and language is not as hard as you might think – at least if you work with the right matchmaker to find an outsourcing partner. You’re looking for an outsourcing partner that has long experience, a good reputation, and reasonable pricing, and it’s okay if it takes a minute to find the right one.
When you work with TDSGS, you can significantly expedite the process of finding an ideal-fit outsourcing service provider. We’ve been helping companies do just that for more than 30 years, and we have thousands of contacts in every field of outsourcing, all around the world.
Want to learn more? We invite you to reach out to discover how we work and how we can help you find the best outsourced software development services to meet your needs and budget. Get in touch with us today!
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