Why is Software Development Outsourcing so Popular?

What is the first thing that comes to your mind when you think about software development outsourcing? That it is reliable? That it is a great way to gain a competitive edge? Or that it is just a trend that will disappear?

Before jumping to any conclusions, it is important to learn about the advantages of outsourcing to understand it completely. Here is a list of the most important benefits that make it so popular.

Lower labor cost

One of the most important advantages is definitely the lower labor cost, and many companies save a lot of money just by using outsourcing services. The most glaring example of lower labor cost is the salary comparison of a software developer in San Francisco and Serbia. While a developer in San Francisco costs around $110,000, hiring consultant from Serbia costs about $45,000.

This is why many companies decided not only to hire an IT outsourcing company but to open their development centers in Indochina, Eastern and Southeast Europe. For example, Apple opened a development office in India, Microsoft opened its development center in Serbia, Amazon opened one in Romania, etc. And many other companies followed the examples of these companies and decided to either invest in or open development centers in Southeast Europe, Indochina or Eastern Europe.

Demand for quality developers in the global market

Even though, the number of programmers doubles up every five years, finding quality ones is one of the hardest tasks for many companies. For example, companies in San Francisco and in New York struggle with finding good programmers that suit their needs. Not only is it expensive to find someone who would work with an in-house team, but it is also hard to find a good programmer since there are so many companies that are hiring and not enough programmers locally. This is why many companies decide to search for programmers in the global market, which leads to the rise of popularity of software development outsourcing.

An additional advantage is that by hiring an IT outsourcing company, there is an opportunity to discover a much wider talent pool. If the focus is only on finding someone who can work in-house, some compromises will definitely have to be made. Software development outsourcing creates an opportunity to search talents in other parts of the world until the right consultants are found.

High quality of staff

In the ever-changing IT scene, it is becoming hard to keep up with the latest technologies. Instead of wasting both time and money while an in-house team gets acquainted with them, the better solution is to hire someone who is already an expert in that field. Software development outsourcing enables anyone to find the right company or a freelancer to work with, the one that already has a hands-on experience in using required technologies.


Occasionally, someone will have to jump in and complete a task, but there is not enough work to hire them indefinitely. This is when outsourcing comes in handy. IT outsourcing company or a freelancer is hired to do the job, and it is up to the one who hired them to decide how long they will be working.

One more benefit is the fact that there is no need to invest in conferences or equipment for the hired companies. They are already working in that field so that no hidden costs can come up regarding training.

Focus on strengthening the core process

As one company grows, the costs of maintaining that growth increase as well. Soon enough, that company’s focus starts shifting and the expansion consumes both human and financial resources.

Instead of feeling under pressure to keep up with these changes, software development outsourcing can make everyone’s life easier and it will allow focusing on strengthening company’s core processes. More resources will be devoted to what that company already does well, which will not only increase efficiency but also competitiveness. The speed of work will increase since an entire team will be devoted to just one task, while the company can continue working on what made it successful in the first place.

There are many advantages of outsourcing that are hard to enumerate, but the most important ones are definitely the fact that a great team can be hired while lowering labor costs and improving the speed of work. By using software development outsourcing a company will gain a competitive edge, so it comes as no surprise why this is so popular.