Top 5 Countries for Software Development Outsourcing

Top 5 Countries for Software Development Outsourcing

The global IT outsourcing landscape is a constantly evolving dynamic structure that responds to economic and political changes in every country and generally follows the supply/demand law. Over the past 15 years, the balance of powers on the global market has shifted, as many new players climbed higher and taken the lead in this race. More and more governments have come to realize the true potential of IT outsourcing and are taking concrete steps aimed at providing economic incentives to IT companies, creating IT clusters and high-tech parks, offering favorable taxation terms and more.

As the result of these efforts, regions and countries that hadn’t been known on the IT market are gaining momentum and claiming their place under the sun. Some countries have strong educational traditions and national schools of physics/mathematics that lay a solid foundation for building a highly skilled and professional IT workforce.

Industry specialists regularly evaluate the potential of every major outsourcing destination. Most ratings are based on three fundamental parameters: financial attractiveness (salaries/rates), availability of resources and their skills, and business environment. Whereas there are multiple other parameters that affect the overall rating, these three are the most important ones.

Below is an overview of 5 best IT outsourcing destinations in the world:


India has been the primary outsourcing destination for years, and many believe that it was this country that “invented” software outsourcing in the first place. With a predominantly English-speaking population, a vast pool of qualified resources and low rates, the country still remains the destination of choice for large software development and BPO projects where lower rates translate into considerable savings in long-term projects. India’s government pays a lot of attention to supporting the national IT segment and fosters its development on a number of levels: from higher education to legislation offering preferential taxation to IT clusters and companies. All of these factors made India’s dominance on the international IT outsourcing market a reality once and let it stay its undisputed leader now.

The main disadvantage of outsourcing to India, however, is the proverbial quality of these services. A vast majority of Indian programmers are notorious for being prone to repetitive, template-based development, which makes them a less optimal choice for innovative, unique products.

Eastern Europe

In the context of software & web development outsourcing, Belarus, Ukraine and Russia are often viewed as a whole, although the countries have their peculiarities. Belarus, for instance, boasts massive state support of the IT sector through the Hi-Tech Park initiative, and bears the unofficial title of the former USSR’s “think tank”. Rates may not be as low as in conventional locations like India, but you will definitely find the professional level of developers to be a lot higher. Developers from this region are known for their ingenuity, knowledge of multiple platforms/languages and non-standard approach to work. If you are building a non-standard solution with special requirements, this region is a very good choice.

Latin America

Latin America is becoming an increasingly important player on the international software outsourcing market. In the wake of the .com boom some 15 years ago, Venezuela, Bolivia and Argentina, in particular, managed to create a highly professional workforce that is capable of thinking outside the box and solving non-standard tasks. For customers from the U.S, Latin American vendors are available in the same or very close time zone, making for efficient communications during largely overlapping working hours. This region offers IT specialists of different types at acceptable rates, which, combined with good communication skills and generally good command of English, makes the region a great choice for U.S. companies looking to efficiently outsource their software development projects.


Estonia was the first among Baltic states that adopted the e-government concept and created highly favorable conditions for the IT industry. All of this resulted in a booming IT sector and emergence of various successful startups, Skype being the most famous of them. The region is characterized by a high professional level of developers, extreme proximity to Western Europe and shared cultural values. At the same time, the cost of development in this country is lower than in most European states.


Although China has traditionally been a country of choice for manufacturing pretty much anything — from clothing to electronic devices, — it only recently became a new major force on the software development outsourcing market. The largest nation in the world is currently offering highly qualified resources at rates that are higher than those in India in exchange for deeper expertise.

This review reflects the opinion of the author and does not guarantee that any of the recommendations may be applicable to your particular case. However, this information may appear useful if you are thinking about outsourcing your project and facing a hard choice of the right vendor for this job.