10 Best Countries to Outsource Software Development
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Best Countries to Outsource Software Development

by Mary Kolisnyk

The part of the software for NASA operations and US Navy submarines was developed in Central and Eastern Europe (CEE). According to the survey, 59% of tech leaders feel a shortage of tech skills. This is where outsourcing steps into the game. Many companies look for the top outsourcing destinations with low-cost development center.

However, a ranking is very subjective and everything depends on the metrics that take into account and involvement of each country to analyze its IT market. That’s why we decide not to use software development country ranking. We’ll only describe specifications of the best countries to outsource web development.

Outsourcing to Eastern Europe: Value-Added Solution

IT outsourcing is now fueled by talent gaps. Last year, more companies discovered developer ratings and looked for offshore and nearshore companies with the appropriate expertise and significant portfolios. Programmers from the Eastern Europe are highly appreciated by VentureBeat, Gartner, and Stack Overflow. Their machine learning, IoT, Artificial Intelligence have captured the global attention in recent years. Paired with fast speed of work and Western mindset, CEE will soon become the next Silicon Valley.

Outsourcing became catchy because of cost reduction but nowadays it has something more to offer: value-added services. The main reason is that most Eastern and Central Europe companies have grown into significant centers of competence. Many CEOs are interested in broadening the talent pool and receiving new tech knowledge.

If taking into account financial issues, this is offshore software development pricing guide.

offshore software development pricing guide

Weforum noticed that outsourcing to Eastern Europe is becoming more like outsharing. It means that Eastern European developers are equal remote partners with a deep experience in handling complex IT tasks. So, such cooperation is more than hiring someone who will blindly programme. Outsourcing service providers may be treated as remote CTO with an ability to propose the best tech solutions and strategy to develop needed products.

Outsharing partnership is built on transparency and trust with the opportunity to align this collaboration to the company’s culture and values. Moreover, it’s about innovation and increase the quality and speed of the software development. For instance, the code for the world flight search engine Kayak was written in CEE. They made software applied by 25% of the global heavyweight vessels. The largest peer-to-peer lending marketplaces and biggest aviation parts marketplace in the world were created by the Eastern European developers as well. Finally, such developers are relocated to the best tech companies involving Facebook and Google.

Related article: 10 Software Development Outsourcing Companies in Europe Which Can Draw Your Attention

Top 10 Countries in Software Industry

Ukraine outsourcing rates

  • Ukraine

Mindfield Consulting believes that Ukraine is one of the leading and promising countries for the outsourcing. This country has a lot of bright tech talents and engineering expertise. Moreover, Ukraine outsourcing rates are available, there is no significant cultural difference. Timezone overlap seems like not a big deal because many companies find a good fit in cooperating this way.

  • China

China offers strong tech services. PWC’s report found out that top fastest growing IT companies are located in China. Besides, customers may choose multiple languages for the business partnership. It has low-cost rates but higher than in CEE.

  • Canada

Canada is nearshore country for the USA with a very comfortable timezone for the US clients. This is a home for the startups and very strong in AI country. The main reason why this country is interested in outsourcing is a chance to work with flexible work hours. IT professionals wanted to have agile schedule to have work/life balance.

It attracts customers with predictable quality, culture and language similarities. Because of lower currency exchange, they have cheaper prices than US IT market.

  • India

Outsourcing to India is a controversial issue. That companies who worked with this country know its pros and cons, possible risks. The main disadvantage is that you can’t predict what quality of services you will get. Their IT companies are so different, so you may get a brilliant unicorn or very unprofessional developers. Sometimes, clients need to re-order services to make the products better.

On the other hand, an average hourly rate for software developer India is extremely low. That’s why some tech leaders are willing to invest in this country. Moreover, India’s urban population is highly educated and have good experience in delivering IT services.

  • Malaysia

Experts predict that BPO in Malaysia will reach $1,4 billion by 2021. It gained popularity because of customer-oriented services, development of great applications and innovative business processes.

  • Philippines

Last year, this outsourcing empire was estimated at $23 billion. Furthermore, it offers employees with high-level of English proficiency and cheap labor.

In 2016, Manila kept the second place for the biggest outsourcing city globally. According to the Information and Communications Office, the Philippines saw a 30%  increase over the past decade. The main advantage of this country is young demographic, good education system and language neutrality. English is official language there that makes it easy to understand each other.

  • Brazil

It has a good location to place delivery centers (mostly around São Paulo) to maintain global customers in Latin and North America. The Brazilian IT labor will fit for call center support, ADM (particularly Oracle and SAP ERP), infrastructure management services. For instance, a French provider recently used an alliance-to-acquisition approach to cooperate with Brazilian outsourcing team.

Last year, Brazil’s government provided modernization of the labor laws to make outsourcing services more attractive for the global customers.

  • Thailand

This is an important player in the international market for outsourcing software development and BPO. According to the 2016 A.T. Kearney Global Services Location Index, this country holds a 6th place among other countries.

It has a potential for the further development as an outsourcing destination with 100,000+ IT professionals. The labor market is young: most of them are under the age of 30.

  • Indonesia

Indonesia presents one of Southeast Asia's biggest economies. It is a financially attractive country with a good business environment and the fourth-largest workforce in the world. On the other hand, it has a small pool of IT talents and a limited set of software development services.

Nevertheless, the Indonesian government is working on economic policies to maintain its outsourcing industry. Nowadays, it has large-scale operations of the main ITO suppliers, such as IBM, PT Sigma Unify, Accenture, Samsung SDS, Cipta Caraka, PT Visionet, etc.

  • Romania

Romania IT outsourcing may surprise international clients with large talent pool and qualified professionals. Bucharest is one of the quickest fast-growing cities in Europe and popular location for the startups.

More about Possible Options

TIMEZONES

Time Difference
Ukraine GMT+2
China GMT+8
Canada GMT-5
India GMT+05,30
Malaysia GMT+8
Philippines GMT+8
Brazil GMT-2
Thailand GMT+7
Indonesia GMT+7
Romania GMT+2

Time gap can be a problem if you cooperate with inexperienced employees. But most outsourcing companies have huge experience to provide smooth process. Moreover, many IT service providers are ready to shift their schedule to fit your timezone and set good cooperation.

INNOVATION

Innovation Index (based on Bloomberg’s research)
Ukraine 50,78
China 68.89
Canada -
India -
Malaysia 66.98
Philippines -
Brazil 46.4
Thailand -
Indonesia -
Romania 57.06

An innovation-driven environment is must-have for the competitive business environment. That’s why worldwide tech brands look for IT companies from the innovation-friendly economies.

Let’s briefly consider the level of innovation for the key countries from our list.

  1. Ukraine

The country has a growing ICT sector that was worth $2.5 billion in exports in 2015. Ukraine hosts well-known startups such as PetCube, Looksery, which was purchased by Snapchat for $150 million, etc.

2) China

In sectors like IT and e-commerce, China thrives in developing an attractive ecosystem to boost innovation. That’s why they don’t need to search for international markets because there is big potential in China to satisfy business needs.

3) Canada

Based on the Global Economy’s research, the average value was 55.86 points with a maximum of 57.6 points in 2013 and a minimum of 53.7 points last year.

Programmer Skills

Programmer Skill Rankings (HackerRank)
Ukraine 88,7
China 100
Canada 81,7
India 76,0
Malaysia 61,8
Philippines 63,8
Brazil 73,4
Thailand -
Indonesia 71,8
Romania 20

Programmer skills are an important factor as you will collaborate with IT professionals and it’s valuable for you to know their level. Feel free to explore our table to hire skilled programmers.

BILLING RATES

Average cost per hour for the middle programmer
Ukraine 36
China 24
Canada 40
India 21
Malaysia 34
Philippines 28
Brazil 46
Thailand 25
Indonesia 30
Romania 42

Billing factor is not the most important category but it helps you to plan your budget and be aware of the existing rates. Many companies look for outsourcing options in order to cut the costs. In this case, cooperation with Ukraine, Romania or Indonesia can save you 30–50% of the price of a local hire. Keep in mind that leading IT countries such as Ukraine, China, and Canada offer specialists that work fast and can perform tasks quicker that will help you to reduce the cost as well.

How to Deal with Culture Differences and Communication Issues

At Diceus, we do our best to meet specific needs of each customer. Actually, it is not a challenge for us because we have employees from different countries with various background. Moreover, 86% of our employees have advanced level of English language. And our specialists always work on their language skills with English native teacher. Diceus’s team can visit client’s office as well for the better communication and to learn the specification of the business.

We are open for the collaboration with customers from the USA, Latin America, UAE or any other country. Our company will be glad to cooperate with you, give you professional consultation or deliver complex IT solution for your business.

Worst Countries for Outsourcing Software Development. Do they exist?

There are many concerns around outsourcing but the truth is that there is no awful country for the IT offshoring. There is a list of the countries available for this kind of cooperation and it means that this is win-win collaboration. Global companies order some services from the dedicated team because it makes sense for them. Especially in IT, many countries are willing to pay overseas executor instead of developing complex software systems. Some countries don’t have a pool of needed IT developers. But it doesn’t mean that they’re worst countries for outsourcing. They just don’t have such services accessible and these countries may be strong in other industries.

Software development becomes more complex each year that makes offshoring important business solution. Nowadays, this is almost risk-free cooperation with many advantages. So, feel free to explore our list of the best countries to outsource web development. Each country has something to offer and everything depends on your needs and budget.

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