5 best countries to outsource software development in 2021

Outsourcing is becoming more and more popular, and more and more companies are looking for the best market for hiring freelancers. No wonder, as this is a good way to save money and get high-quality work.

Moreover, companies, even those with a team of developers on staff, often use outsourcing to deal with peak workloads. There are also non-economic reasons for software development outsourcing - for example, a company needs to acquire new competencies or hire talent for a while.

At the same time, there are some peculiarities and nuances that you need to know about outsourcing to make it really effective. To begin with, you need to know which countries have the best software outsourcing market.

China

China is the second most popular destination after India when companies start thinking about outsourcing their projects. It is home to many fast-growing software companies and teaches about 4.7 million technology professionals annually. In fact, China has entered the IT outsourcing map thanks to government support and Japan's tendency to outsource many low-wage jobs to that country.

Pros

• According to Coursera research, China has significantly improved the quality of IT services in general in recent years and has created a more favorable political and business environment for cooperation with foreign companies. All this makes the country highly competitive in the IT outsourcing market.
• International companies such as GE, Dell, and SAP have also established their R&D teams in China. This has created a macro environment favorable to outsourcing companies.
• The quality of the development of the local IT sector is confirmed by a large number of games and software products, such as 360 Camera, Baidu, and Alibaba, which are now global hits and are leading in different countries.

Cons

• Only 10 million of China's 1.3 billion people speak English, which creates a serious communication barrier for many international employers.
• China is notoriously lax in enforcing intellectual property laws. This can be overcome by hiring a reputable outsourcing agency and setting clear rules even before the job begins.
• Well, don't forget that Chinese offshore developers' rates are higher, and the cost of product development can reach $30-40 per hour.

Ukraine

Ukraine has also become one of the most popular destinations for software outsourcing. The Ukrainian IT industry is developing faster than ever. The Global Sourcing Association (GSA) named Ukraine the offshore service’s destination of the year, while Gartner included it in the top 30 offshore and outsourcing services destinations in the world. Today more than 1,600 IT outsourcing companies in Ukraine employ over 192,000 IT professionals. IT companies and outsourcing teams in Ukraine are especially good at projects related to Big Data and AI , mobile development, blockchain, and cryptocurrency technologies. The position of Senior Developer is very popular. The most common programming languages are C++, Java, Ruby, PHP.

Pros

• One of the most significant advantages of Ukraine is the large pool of IT talent. There are many highly skilled professionals who offer quality software development services at relatively low prices.
• Ukraine also has solid educational potential and produces more than 16,000 IT graduates annually. In addition, almost 23,000 professionals graduate from STEM programs.
• About 80% of software engineers in Ukraine speak English well, and local companies encourage them to learn English by providing free language courses for their employees. Moreover, the European mentality makes it easy to find a common language with clients.
• Moreover, companies in Ukraine pay special attention to intellectual property protection, so you can be sure that your software product is not exposed to the risks associated with the violation of these rights. In particular, signing NDAs is a common practice for Ukrainian companies.
• The country's rich tech scene has also contributed to the rapid growth of the local startup community. Jooble, DepositPhotos, Grammarly, GitLab, PetCube, Mobalytics, Preply, Attendify, CleanMyMac, InvisibleCRM, Looksery, and Readdle are just some of the big names that have appeared in Ukraine.
• Global market leaders have already shown interest in the local startup scene, which has led to a number of major acquisitions. Google bought Viewdle, a facial recognition company; Snapchat bought Looksery, a real-time face modification application; and Oracle bought Maxymiser, a Ukrainian cloud software provider for marketers. Total venture capital investment in Ukrainian startups reached $510 million in 2019, one and a half times more than 2018 result.
• There are 1,500 IT companies in Ukraine that offer almost all types of software services, including web and mobile application development, UI / UX development, R&D creation, IT consulting, analytics, and more. According to IT Ukraine Association experts, the IT market in Ukraine is predicted to grow steadily by 22-30% annually, and the number of specialists will double by 2024. This scenario may become even more optimistic if more IT businesses with their own products enter the market.

Cons

• Currently, Ukraine is undergoing a series of transformations aimed at democratizing public processes and fighting corruption. Because of this, the "rules of the game" may change during cooperation with companies.
  Although there is still some military activity in the east of the country, it is concentrated in only 10% of the state. The remaining areas are perfectly safe, having a normal, peaceful life and all IT companies are concentrated there.

Poland

According to HackerRank statistics, Poland is the third best country in the world for experienced programmers. Poland's two largest cities, Warsaw and Krakow, are also among the top 50 cities on the Tholons Globalization Index. Poland is the 5th best technology country in Europe, with its core competencies in computer networking and security technology, according to the Coursera study. It was also ranked 15th in the top 50 Digital Nations in 2019 by the Tholons Globalization Index.

Pros

• Polish programmers rank first in Java tests and are in the top five for other programming languages, including Python, Shell, and Ruby.
• A plus for Western developers will be the fact that English is a second language for 30% of the population in Poland, which makes communication easier.
• Companies from North America will need to provide a time zone offset (in Poland it is GMT+1) if they want to conduct live-meetings, but the existing overlap is enough for functional cooperation.

Cons

• Considering its popularity, Poland is now the most expensive Eastern European country for outsourcing software development, which negates all its merits.

Vietnam

Did you know that technology giants such as IBM, Microsoft, and Intel have outsourced their software development to Vietnam? You might wonder why they chose this country. The country ranked 23rd out of 50 in the HackerRank coding challenge competition for developers around the world. Developers performed well in the artificial intelligence (AI) section, which is one of the emerging technologies in Vietnam's software industry. Other technology areas that are expanding in developer companies are fintech, blockchain, software-as-a-service, and e-commerce.

Pros

• The price of services is probably one of the most significant factors. The cost of product development in Vietnam is 90% lower than in the United States.
• Offshore outsourcing software development has become the new driving force of the Vietnamese economy. This is probably why the Vietnamese government actively supports technological growth and promotes its economy for foreign investment.
• Over the past decade, Vietnam has continuously invested in education. Each year about 25,000 engineers graduate from college.

Cons

• The IT market in the country is relatively young, so the education system does not always meet the demand for quality IT professionals.
• The culture of IT outsourcing is just emerging, and IT-related skills (e.g., communication) tend to be a weakness.
• English proficiency is not the strongest aspect of outsourcing in the country - Vietnam ranked 52nd in the EF English Proficiency Index (EF EPI), which is only 10th among Asian countries.

Romania

Romania has invested heavily in its IT infrastructure over the past few years, placing it 18th in A.T. Kearney's Global Services Placement Index. Kearney, which ranks countries on financial attractiveness, skills, and availability, and overall business environment. And with most developers earning at least three times as much as the average Romanian, the field has the potential to attract a steady stream of new and talented workers.

Pros

• The IT outsourcing market in Romania is much smaller than in Ukraine and Poland. However, the country has 116,000 IT professionals, most of whom work in Cluj-Napoca, Bucharest, and Timișoara.
• Romania is located at the intersection of Western European and U.S. time zones, which makes it easier to interact with software developers.
• The technology industry and IT outsourcing in Romania boast 15% annual growth. In 2018, growth in the technology industry accelerated to $4.5 billion. The technology industry grew at a CAGR (Compound Annual Growth Rate) of 13.4 percent.
• Exports of software and IT services represent 1.9% of Romanian GDP. Thus, software outsourcing in Romania contributes significantly to the country's economy.
• Romania is convenient for startups: the country has 353 startups, according to the Evozon report. Moreover, one of them, UiPath, became a billion-dollar startup and made its way to New York, London, Singapore, and Tokyo.

Cons

• As for prices, in Romania, they are comparable to Poland, which, again, somewhat negates all the advantages of cooperation with development teams in this country.
• The level of English proficiency among specialists is about 61.36 points out of 100, which is quite mediocre.

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What country to choose? That is for you to decide. Nevertheless, note that Eastern European countries are always among the leading software outsourcing countries - with a high level of expertise in software development and affordable cost of services. Eastern European countries are the closest in mentality to the Western market, which guarantees more productive cooperation , even despite the time difference. Also, their prices are very attractive. If you need an optimal price-to-quality ratio, pay attention to Eastern Europe in general and Ukraine in particular.