What criteria to consider when exploring options
When comparing software outsourcing destinations, what information should we look for?
Talent pool and technical domain
A rich talent pool means your project is in good hands with a reliable workforce. It’s even better if the chosen region is highly interested in your tech domain. They are more eager to learn and excel at using it. You should check for the popularity, level of education, and number of domain-specific experts for that technology.
Cost and quality
After all, the reason for outsourcing is to save cost while having access to global talents. But low cost doesn’t equal bad quality and vice versa. Each region has different living standards and currency values. You should go for a partner who can handle the tasks within your budget.
Time zone & language
These two can impact the quality of communication and overall workflow. Especially if you opt for offshore outsourcing, you might stumble on language hurdles. Meanwhile, time differences can lead to slow responses and interrupted processes.
The cultural fit
Although it sounds like a stereotype, the differences in corporate culture can break your work’s rhythm. Having compatibility will create a positive atmosphere for your development process.
Don’t forget political stability and technology infrastructure
Political tranquility and supportive tech ecosystems in your chosen destination underpin a secure and uninterrupted development process. I know it’s hard to predict any future, but it’s better to investigate before signing anything.
Top destinations for IT outsourcing by country
A list of 8 is lots of information to take in, we know that! So, let’s have some quick comparison between the most popular IT outsourcing countries:
| Country | Companies Listed on Clutch | Hourly Rate | Top skills | Quality rank by Hacker | Culture |
|---|---|---|---|---|---|
| Poland | 1349 | $50 – $80 | Web/ Mobile development, eCommerce solution, Cloud computing | 98.0/ 3 | Creative and skillful workforce |
| Ukraine | 992 | $30 – $60 | Security, Web/ Mobile Development | 88.7/ 11 | Growing and adaptive talent pool |
| Australia | 495 | $50 – $100 | Digital transformation, Cybersecurity, Fintech, | 83.2/ 19 | Experienced workforce with work-life balance |
| Vietnam | 280 | $20 – 40$ | Blockchain, AI/ ML, Data, IoT, Cloud Computing | 81.1/ 23 | Young, proactive and hardworking and talent pool |
| India | 5182 | $15 – $50 | IoT, Legacy Modernization, AI, Big Data. | 76.0/ 31 | Diverse and large workforce |
| Mexico | 475 | $40 – $70 | Cloud, Machine Learning, Cybersecurity | 75.7/ 33 | Young, North American style workforce. |
| Brazil | 291 | $25 – $50 | Computer Network, SaaS, | 73.4/ 38 | North American style workforce. |
| South Africa | 188 | $25 – $50 | SaaS, Fintech, Web Development | 68.3/ 43 | Growing tech scene. |
*Don’t stop yet! This table only covers basic information. For a no-regret decision, you should read on for detail about their talent pool, number of senior, political stability, cultural fit and technology access.
Need a quick search? Click on the country to immediately jump to their section (remember we have some useful tips down the line)
*English proficiency updated 2024 via EF index
*Political stability updated 2024 via The Global Economy
*Risk assessments, updated 2024 via Coface, representing the ease of making payments and transferring currency. Rating scales are A1, A2, A3, A4, B, C, D and E (from lowest to highest)
In Asia: Vietnam
- Time zone compatibility: UTC+7
- English proficiency score: 505
- Political stability rank: 98
- Risk assessment: B
- Top companies: Synodus
Emerging as a newcomer, Vietnam indeed has lots of potential. They rapidly rose in economic status and technology investment, establishing themselves as APAC’s leading IT outsourcing country.
Their IT services alone earned more than $13B in 2022. What creates this revenue?
- Vietnam is home to more than 530,000 developers, with 55% holding middle to leader positions, ensuring you have all the qualified technicians for your critical projects.
- Hackerrank placed Vietnamese developers at 23rd (above India and right behind Australia), GitHub scored their skills at 61.48/100 (above India and Mexico), while Pentalog placed them at 10th for best developers and 2nd for best freelancers.
- Competitive rate for good quality, starting at $20
- A dynamic tech scene, especially in blockchain, AI, Data and IoT. They are among the top 5 countries in blockchain and have produced successful NFT games such as Axie Infinity and Thetan Arena. Meanwhile, AI and IoT are used across boards, from government to manufacturing.
- Supportive government for startups, encouraging the growth of many Fintech and eCommerce businesses.
Of course, this couldn’t happen without a young and adaptive workforce. Vietnamese people are tech-savvy and proactive. They can quickly pick up any tech trends and are highly committed to teamwork and shared goals.
A few things to keep in mind:
- Despite the authority acceptance, Vietnam still lacks many legal frameworks for the use and monetization of blockchain and AI. Their weak data protection is also a challenge, although there are 106 cybersecurity companies in Vietnam.
To sum up: Vietnam is a promising land for IT outsourcing. They are best for small to mid-size enterprises looking for a cost-effective solution. At the same time, Vietnam should be one of the top choices if you want to an exceptional blockchain and fintech development.
In Asia: India
- Time zone compatibility: UCT+5:30
- English proficiency score: 504
- Political stability rank: 142
- Risk assessment: B
- Top companies: HCL, TatvaSoft.
Known as the factory of software developers, India is home to more than 4 million IT professionals and 35,000 tech firms. The ICT sector alone contributes 13% to India’s GDP, with outsourcing services taking 53% of service exports.
India is another beast compared to other software development outsourcing countries, but does their quality match the expectations? A few years ago, it could. Now? They have mixed reviews of being underdelivered.
- GitHub only gives them 59.07/100 in software development, ranking at 66 (lower than Vietnam, Brazil and Poland on this list)
- Hackerrank put India at 31, behind China, Vietnam and Australia.
So why do people still choose India? They are the cheapest outsourcing country, which can reach as low as $10 to $12 if you know how to deal. You can still hire decent Indian developers with good money.
Leading Indian outsourcing companies have expanded globally, mostly in the United States and Europe. Meanwhile, Bengaluru, Delhi, Hyderabad, Mumbai, Chennai, and Pune take over as the local tech hubs.
AI, Big Data, and IoT are their top skills, while Cloud Computing, Web, and Mobile App Development have the biggest supply, with 700K to 900K developers each. Indians are hardworking. They constantly upskill and reskill, boosting the growth of blockchain and AR/VR.
Things to keep in mind:
- Lots of Indian can speak English, but their accent can be tricky to understand.
To sum up: Indian have a wide range of developers. You should work with an established brand name and carefully evaluate to find a good one.
Also, you can consider other software development countries such as Vietnam or Malaysia, who is also close, for the same price and (better) quality.
In Europe: Poland
- Time zone compatibility: UTC+1
- English proficiency score: 598
- Political stability rank: 67
- Risk assessment: A4
- Top companies: The software house, Brainhub
More than 25% of software developers in Central & East Europe are Polish, making them the largest tech house in the area. Still, this number is nothing compared to Germany, the UK, or France, so why is Poland favored as an established software outsourcing country?
- Polish developers are talented. Hackerrank put them in 3rd spot worldwide, Coursera voted them 4th in technology in Europe, and GitHub graded them 79.97/100 for software development skills.
- Their rate is more affordable than many top European countries. That’s why nearshore outsourcing to Poland is growing rapidly, attracting many young talents to join the workforce.
- The government backs up a thriving tech scene by promoting startups, welcoming global investors, and building R&D facilities. Microsoft, Google, and Intel have invested in Poland, while Warsaw, Krakow, and Wroclaw are known as IT/ICT basins.
Polish developers are masters of web and mobile app development, proven by their creativity in design and numerous awards. Other sectors such as cloud computing, IoT, and eCommerce solutions are also the top skills delivered by Poland.
As part of Europe, Poland sure has similar working traits. They focus on results, quality, and love to demonstrate their expertise and ownership. Unlike the Eastern lifestyle, they value personal life and separate it from work.
Keep in mind that:
- Cybersecurity might be the weakest link in Poland. They have recently become the most attacked country, with over 1000 attacks per week.
To sum up: Thanks to the close distance, similar work culture and a variety of professionals, Poland is a prime choice for Western Europe. They are best for mid-size to complex projects.
In Europe: Ukraine
- Time zone compatibility: UTC+2
- English proficiency score: 530
- Political stability rank: 183
- Risk assessment: D
- Top companies: Fulcrum, Binary studio, Leobit
Ukraine is undergoing a war; is it worth working with a partner in such turbulence?
The war did affect all aspects of their economy and society. Yet IT services are carrying the country:
- Tech accounts for 41% of services exportation.
- They have over 307,000 developers and 2,150 active tech companies
- 28% planning to open offices abroad, so you don’t need to worry about interruption.
Ukrainian developers are well-versed and experienced, with 43% having over 6 years of experience and scoring an average of 94% on the Regional Skill Proficiencies. HackerRank voted Ukraine among the leaders in security and distributed systems. They have also been known for their good eye for design and web/ mobile app development.
While the war can negatively influence their IT infrastructure and ease of doing business, Ukrainian is still a reliable workforce for your next project. Their work culture priority creativity and flexibility. With the eagerness to learn, both young and experienced developers are willing to take on any challenge.
To sum up: War can be a strong obstacle for a software outsourcing country like Ukraine. Our recommendation is to work with them on a short project nearshore. Since war is unpredictable, a long-term project can be risky.
On the other hand, the price is lower than Poland, which can be a good match for mid-size to small businesses
In America: Brazil
- Time zone compatibility: UTC-3
- English proficiency score: 487
- Political stability rank: 122
- Risk assessment: B
- Top companies: Luby
Brazil stands out as the top pick software outsourcing country for US and Canadian thanks to their cost-effective workforce, tech-savvy culture, and strong ties to North American work styles.
They showcase a robust tech landscape with around 500,000 developers, ranking 54th in the Global Innovation Index, and an increasing education in computer science and engineering.
Brazil mirrors many North American workplace traits, like innovation and creativity, wrapped up in their unique “Jeitinho” approach. However, they discard the “individualism” in the Western workplace, fostering their social culture that powers teamwork.
But that isn’t the only reason why Brazil earns the American love. They also have an impressive IT infrastructure, with around 100 tech parks and 57 accelerators, located in Sao Paolo, Rio de Janeiro, and Curitiba.
Despite all the pros, a few things you need to watch out:
- Their tax and regulation system might lower the ease of doing business. You should consult a legal advisor or ask your Brazilian vendor to be clear and concise.
- Other regions can offer the same quality as Brazil at a lower price. Despite having a skillful workforce, some domains, such as blockchain, IoT, or AI, still fall behind.
To sum up: Brazil is best for nearshore outsourcing with simple projects, especially for the US and Canada companies looking for a partner with the same mindset, culture, and cost-effective solution.
In America: Mexico
- Time zone compatibility: UTC-6
- English proficiency score: 451
- Political stability rank: 148
- Risk assessment: B
- Top companies: Inowu, Ancient Global
Talking about Mexico, we often hear about violence and drugs. There isn’t enough talk about 220,000 skilled developers working for local and international companies.
Thanks to the government’s investment in tuition-free universities, Mexico has a steady stream of computer science graduates. It has become a promising land for software development outsourcing, estimated to reach $8.62B in 2023. Tech giants like Microsoft, Google, and Netflix chose the Mexican due to the proximity and qualified professionals (ranking 2nd in Pentalog’s list).
Unlike their Brazil peers, Mexican excel in machine learning and cybersecurity. The IT infrastructure and government support are also attractive to many startups and foreign investment. Other opportunities include cloud computing, mobile development and consulting services for manufacturing, retail and financial services.
Much like their Brazil peers, Mexico also mirrors the US working styles while favoring co-working spaces and a work-life balance mindset.
Despite all the pros, a few things you need to watch out:
- We recommend you partner with vendors in big cities, as cartel activity in these places is less dangerous.
- Their data privacy and cybersecurity laws are still under optimization.
To sum up: Mexico is the best nearshore outsourcing country for North America.
Compared to Brazil, they are better if your project involves complex technologies such as AI, Blockchain, or cybersecurity. Keep in mind that their price is higher, hence Brazil is still a better choice for smaller businesses.
In Africa: South Africa
- Time zone compatibility: UTC+2
- English proficiency score: 605
- Political stability rank: 152
- Risk assessment: C
- Top companies: Specno, Sivoxi
Standing among the largest economies in the continent, South Africa established themselves as the technological and innovation leader of the region. More and more young South African are diving into the tech scene, mastering from backend, frontend to full stack.
Through the government training program, around 1 million talents in AI, Coding, Cloud computing, and Networking are expected to join the workforce by 2030, making this “rainbow nation” a promising destination for software outsourcing.
Meanwhile, based on the OfferZen report (updated 2024), fintech development (27,5%), SaaS (14,1%), web development (8,8%), and cloud computing (6,3%) are currently the top industries their developers excel in.
Their culture is nurtured with “ubuntu,” showering in openness, friendliness, and collaboration. Your projects are not just in skilled hands but also in a place that values strong partnerships and social responsibility.
Despite all the pros, a few things you need to watch out:
- The talent pool in South Africa is relatively “young”, they might lack specialists for complex projects or blockchain and AI.
- Technology infrastructure in South Africa is limited, especially in underserved communities. You might want to look for a partner in Cape Town, Pretoria, or Johannesburg.
To sum up: South Africa is best for nearshore outsourcing with simple to mid-size projects that do not require many complex technologies in this region.
In Oceania: Australia
- Time zone compatibility: Various, mainly UTC+8
- English proficiency score: Native language
- Political stability rank: 31
- Risk assessment: A2
- Top companies: CI&T, 4mation, Appello
I know hiring Australians is expensive, and there’s a good reason for that.
After all, they dominate Oceania with a highly skilled IT outsourcing service valued at $23.5 billion.
Ranking 8th in Global Talent Competitive Index, Aussies certainly know how to attract and retain their highly educated workers. The government is actively boosting tech innovation, digital transformation and cybersecurity. They also plan to expand the tech workforce by 1.2 million in 2030 by investing in education, attracting both local and international students.
Aussies shine in cybersecurity with around 67,000 skilled workers. Their tech scene is thriving with many tech startups and unicorns, especially in fintech, making them ideal to outsource product development.
Other things to watch out:
- Aussie’s working style makes a lot of sense to Westerners. They have high-quality standards and less focus on hierarchy. They also like to be direct and prioritize work-life balance.
To sum up: Despite having tech-savvy workforce, Australia is still suffering from a talent shortage, making many businesses looking for global workforce. With the high hourly rate, Australia might not be a suitable destination for many. If you are willing to invest for a skillful nearshoring team in cybersecurity, Australia can be it.
Otherwise, Vietnam or India can be a better software development country.
A few tips to evaluate your options
You probably have 3 or more favored outsourcing destinations in mind by now; it’s time to give the final answers. Here are some recommended frameworks to evaluate them:
SWOT: Identifying a software development country’s strengths, weaknesses, opportunities, and threats will give you a broader view of which region outweighs the others.
PESTLE: Despite being used to study how political, economic, social, technological, legal, and environmental can affect a business, you can still use PESTLE in this scenario. For example, economics is best for estimating the cost, social is for cultural compatibility, and legal is data protection laws or contractual frameworks.
Total Cost of Engagement: The TCE model is made specifically for offshore outsourcing. Besides estimating hourly rates and overall costs, TCE also accounts for hidden costs such as travel expenses (if on-site is needed), legal compliance, tool license, and other training.
Tips: You don’t have to decide right away! Our client even had a shortlist of 4 outsourcing countries, they then chose a top player from each region, contacted them for POC and cost estimation to finally work with us! Read the story!
Working with leading experts from Vietnam & APAC – Synodus
If Vietnam is on your mind right now, Synodus can be a one-of-a-kind sidekick. As we have spent 5+ years delivering tech solutions for 100+ clients worldwide.
With a staggering 88% of client satisfaction, here’s what we can do together:
- Custom web, mobile, and software development: We embrace an extensive tech stack to craft a perfectly match to your business model.
- MVP and Product development for Startups, Fintech, and Blockchain: We are not your regular developers but aim to be your strategic piece, handling all your technical while you grow your startup.
- Low-code development for faster and cost-effective digital transformation, thanks to Microsoft and Salesforce.
- Seamlessly integrating the pioneer technologies of AI, IoT, data, and blockchain into your application.
At Synodus, we prove our expertise with real numbers and the 5 stars from Clutch, written by our clients, says it all.
Top outsourcing countries for startups
The region should be open to entrepreneurship and have a growth-driven mindset. You might also want to save your budget during the early stages, so regions with cost-effectiveness and flexible engagement models, such as Vietnam, India, Ukraine, Brazil, are the top of mind.
Top outsourcing countries for enterprise
An enterprise-grade solution is usually more complex, so opt for region that is highly skilled, has a strong portfolio in technology, good security compliance, and thrives for innovation, such as:
- India
- Australia
- Poland
- Other to consider: China, Canada and United Kingdom (higher rates)
Top countries for outsourcing blockchain development
Blockchain is still a new territory for many regions. While some have set foot as the leaders, many newcomers are growing up quickly with new ideas and fast learning pace.
A region where both government and society have a positive look on blockchain should be your partner.
- Established name: Mexico, Ukraine.
- Promising name: Vietnam, Poland.
- Other to consider: India, Singapore and South Korea (higher rates)
Top countries for outsourcing AI
AI and machine learning are the fastest growing technology in recent years and only a few regions stand out in building and developing AI.
- Vietnam: Top 3 in AI Skillset by Hacker Rank
- Australia: Top 12 in AI Index by Tortoise AI
- Other to consider: Singapore, Canada, Japan, Belgium (usually have higher price)
FAQ
The US, Canada, Switzerland, UK, Singapore, Denmark, The Netherlands, Russia and Australia are among the top countries. One reason is the lack of specialized experts in their nations. Other reason can be the high cost of living and salary that make them move toward more cost-effective software outsourcing countries.
Depending on your project scope and requirements, the development cost can vary. Here is some range for you to consider:
– MVP Development: $5,000 to $50,000
– For small projects: $50,000 to $200,000
– For mid-size projects: <$500,000
– For complex project: >$500,000
To estimate your development cost, you can check our detailed guide on how to calculate and which hidden costs to notice.
Offshore outsourcing is more cost-effective with a wide range of developers than onshore. However, you will face time zone differences and communication gaps. You should identify your needs before making any decision. Besides, there are other outsourcing models like nearshore, staffing or dedicated team. Learn what best suits you!
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