Offshore Software Development. Outsourcing software development is no more some undiscovered way to structure business processes, but rather a well-accepted and beneficial model. Yet, you'll be impressed how greatly offshore software development rates by country may differ in some parts of the world. Average offshore software development rates in Ukraine are around $25-45 per hour, while in the USA you'll pay as much as $100-150 for the same service.
What we'll discuss:
- Eastern Europe
- Latin America
- The USA, Western Europe, Australia, Israel
- Why outsource software development?
- How software development rates are formed
So, what are these affordable offshore software development costs? Let's have a look.
Offshore software development rates by country: a detailed overview
In 2019, the IT outsourcing market generated almost 67 billion dollars. Today, there are hundreds of IT outsourcing hubs all over the world. They all differ. By their rates, development quality, culture, expertise, time differences and much more.
So, to hire a development team, you should keep in mind the entire scope of these characteristics, analyze them, and choose one among the best offshore software development countries. Talking about rates, we can identify two big pools of outsourcing destinations:
- Countries/regions with high-quality life standards and stable economy. Among them are the US, Australia, Western Europe, Israel, UAE etc. IT outsourcing rates are higher there and generally varying from $50 to $150.
- Regions with less developed local markets such as Latin America, Afrika, Asia and Eastern Europe. They are often characterized by lower offshore development rates and high quantity of specialists.
Find in the guide:
- Offshore development rates by country
- Time zone difference
- Development rates by role
It is the regions with less developed economies that have become real players on the arena of global IT outsourcing. They have turned into reliable and productive IT hubs which produce a significant part of mobile and web solutions. So, let’s start our overview of them.
Average cost of offshore software development in Eastern Europe
Think about option to hire team in Eastern Europe. In the past years, this region has turned into one of the biggest IT outsourcing centers hosting about 1 million of well-qualified developers. Its main outsourcing hubs include Ukraine, Poland, Romania, Belarus with average offshore development rates ranging from $20 to $50.
While the development costs are quite acceptable in the Eastern part of Europe, its quality is also well-promising. Being rich in technical educational institutions, this region offers a solid and proven by years expertise in IT. Another positive factor of IT oursourcing in Eastern Europe is pretty high language proficiency — most vendors here are English-speaking.
Offshore Software Development - Ukraine
Popular tech stack: Python, Java, Ruby
IT hubs: Kyiv, Lviv, Odesa, Kharkiv, Dnipro
Ukraine has gained a leading position among IT outsourcing destinations not only in Eastern Europe but also worldwide. Right now Ukraine ranks among the best offshore software development countries. How is it? To summarize in one sentence: Ukraine software development provides high-quality for a reasonable price. In Ukraine, offshore developer rates are on average $25-45 (while some junior developer rates can be as low as $18).
Kyiv, Odesa, Lviv, Kharkiv. These are only a few of Ukrainian IT hubs which play an important role on the global arena with 21 of Ukrainian companies being ranked among the best 100 IT outsourcing firms worldwide.Potential of offshore development in Ukraine is really impressive. Thus, last year the Ukrainian IT industry set a new record — it received astounding $510 million of investments.
Its talent pool is also out of the discussion. Ukraine is a home for 192,000 developers. Most of offshore software development teams in Ukraine are well-educated and skilled. And these are only data for 2019. What can we expect of 2020? Strong expertise and solid tech education are what makes this destination so attractive. The country has around 50,000 tech graduates yearly. Being proficient at most of the programming languages, Ukrainian developers are in high demand far outside its borders. That's why, lots of international companies prefer Ukraine while choosing a destination to hire team in Eastern Europe.
Offshore Software Development - Poland
Popular tech stack: Java, SQL, Python, C++
IT hubs: Warsaw, Krakow, Wroclaw, Lodz
In Poland, rates for outsourcing development are little higher than in neighboring Ukraine — somewhere around $35-55. Yet, such highsoftware development cost per hour can be explained by the excellent tech education in the country and higher living standards. Being one of the most developed IT industries, Polish outsourcing is also rich in both freelance specialists and established companies.
Offshore Software Development - Belarus
IT hubs: Minsk, Gomel, Vitebsk, Mogilev
Recently, Belarus has recommended itself as a young & rapidly growing IT market. The country has all the advantages of its neighbors such as solid educational foundation, language proficiency, relevant expertise. Offshore software development rates vary here from $35 to $50.
Offshore Software Development - Romania
IT hubs: Bucharest, Cluj-Napoca, Iasi
Don’t neglect this destination to outsource your development. The rates here are still pretty affordable ranging software development cost per hour on average from $25 to $45. Yet, the expertise is promising: Romanian developers are proficient in the most complex databases, languages and algorithms.
Offshore software development rates in Latin America
IT outsourcing market in Latin America should also be considered and reviewed while choosing a destination to hire a remote development team. For, it offers competitive talents, relatively good rates, and a convenient outsourcing location.
If you decide to outsource your development to South America, be ready to pay $30 for a junior specialist, while a senior developer’s hour could cost around $50. Seems like a fair price.
Latin America as an offshore software development hub has been recognized only recently. Much due to the efforts of the local government. With all the economic instability and political insecurity, such countries as Argentina, Colombia, Brazil needed new ways of financing. Thus, national governments started to make big investments in tech education and IT infrastructure to develop the industry. The results are pretty good: right now these countries have lots of highly skilled talents who cooperate mostly with US companies.
Tech stack: Java, Python, SQL
IT hubs: Buenos Aires
Argentina is one of the most advanced IT outsourcing markets in Latin America. It offers quite a wide pool of technical-savvy talents who are popular within Western Europe. Growing economically and culturally close to European countries, Argentina has marked a strong presence on global IT arena. Offshore developer rates here range from $35 for a junior programmer to $55 for a senior one.
Tech stack: Node.js
IT hubs: Lima
At Peru Service Summit 2019, it was stated that the country gained $85 millions of global revenue. Expanding presence of IT outsourcing market enables Peru to build and solidify its economy and better life standards. With average software development rates of $35-55, Peruvian developers are technically educated, fluent in English and well aware of the US business processes.
Tech stack: Java, Python, SQL
IT hubs: Rio de Janeiro, Porto Alegre, Curitiba, Blumenau and Londrina
In Brazil, average developer rate per hour goes around $30-50. The country is one of the leading IT outsourcing hubs in the world. In 2019, Tholons Services Globalization Indexincluded Brazil in top 50 IT nations. This region is also renowned by a high number of technical engineers: yearly Brazil has around 15,000 tech graduates.
IT hubs: Medellin, Bogota
Offshore software development rates here are same as for the rest of Latin American countries. While the tech talent pool is not small in Colombia, high criminal situation in the country as well as the lack of English proficiency make it less attractive among other IT outsourcing destinations.
Offshore development rates in Africa
Until recently, Africa hasn’t been among popular offshore development destinations. After Microsoft invested $100 million in continent’s developers in 2019, African IT outsourcing market started to grow rapidly. Key IT hubs here are Kenya, South Africa, Morocco, Egypt and Nigeria. Rates usually vary from $20 to $45.
Tech stack: Java, Python
IT hubs: Western Cape, Gauteng, Durban
South Africa leads continent’s IT industry. In 2019, the country was included in top 50 digital nations. The location also contributes to region’s growing IT market — South Africa's time zones overlay with most of the European countries.
IT hubs: Mombasa, Kisumu, Eldoret
The biggest IT outsourcing hub in the Eastern part of Africa is Kenya. The one of the advantages for this country is high English proficiency among developers. That’s thanks to the country’s policies which made English an official language in Kenya.
Tech stack: PHP, Python
IT hubs: Morocco, Egypt
As well as South Africa, the Northern part of the continent also shares time zone with most European countries. Offshore developer rates here don’t differ from the rest of the continent. Key IT outsourcing countries are Morocco and Egypt. Some of the biggest global telecommunication providers even placed their R&D centers in Egypt (Vodafone, Intel etc.).
Tech stack: SQL, Java, Python
IT hubs: Lagos
For West Africa, the top region for offshore development would be Nigeria. Country’s IT market is only evolving but has a great potential and talent pool. Understanding benefits of an advanced local IT industry, Nigerian government actively invests in developing the market and educate developers.
Software development rates in Asia
The biggest competitive advantage of this region is its low offshore software development rates which sometimes range from $18 to $45. With its 10 million tech specialists, Asia has lots to offer. Yet, affordable offshore rates for software development and wide talent pool are sometimes achieved at the expense of proper product quality, great cultural and time differences. The biggest IT outsourcing hubs in Asia are China, India, Vietnam, Malaysia, Indonesia, the Philippines and Bangladesh.
Tech stack: Java, C++, Python
IT hubs: Bangalore, Chennai, Mumbai, Kolkata
India is recognized as one of the best offshore software development countries. Its offshore developer rates usually range from $25 to $50. English is widely spoken around the country which is a big advantage while choosing destination to outsource software development. Yet, the final product quality can be an issue. There is no legal system to control quality standards in the country, so it totally depends on whether you’re lucky enough to find responsible and reliable developers.
Tech stack: Python, Algorithm and Functional Development
IT hubs: Beijing, Shanghai, Shenzhen
The region boasts with a rich talent pool of skilled developers, obviously. Chinese software development cost per hour is little higher than in other Asian countries — $30-60. This price is caused by more advanced local economy and expertised specialists. Language barrier is among main concerns for the companies looking for outsourcing in China. So, having recognized poor English proficiency throughout the country, Chinese government started to invest in numerous initiatives to educate the local population.
Tech stack: PHP, ASP.NET, Ruby on Rails, ASP.NET Core
IT hubs: Manila
The country’s developers have pretty good level of English, strong tech foundation and an elaborated IT infrastructure. Besides, stable political and economical situation in the country adds up to its popularity among IT outsourcing seekers.
Tech stack: Java, PHP, and .NET
IT hubs: Hanoi, Ho Chi Minh City
For Vietnam, average offshore software development costs are $20-40. The country has been regularly ranked among top global outsourcing destinations. Vietnam can be characterized by deep expertise, numerous technical specialists and high language proficiency.
Destinations with high offshore development rates: the US, Western Europe, Australia, Israel
The thing which unites these at first completely different countries are their relatively high rates for outsourcing development. Average offshore software development rates by country here reach up to $50-100. These numbers result from elaborated economies, high life quality standards and well-developed internal markets in the chosen destinations.
Destinations with high offshore development rates (development rates in the USA, Western Europe, Australia, Israel)
The United States
The US annually ranks among top digitally competitive countries in the world.Yet, the specifics of its national market, economy and taxation system make the region one of the most expensive IT outsourcing destinations. Average rates for offshore software development in the US may range from $70 to $150.
This region’s rates can be explained by the stable economy, advanced taxation system and high standards of living European countries provide. In Germany, France, Netherlands offshore developer rates may range from $50 to $100, while in Switzerland or Scandinavia the same services may cost you up to $100-200.
The Australian IT market is growing rapidly right now. Yet, there are some barriers which hold it from becoming one of the top offshore development hubs: high rates, remote location and significant time difference. Average rates for software development can be as high as $100-150 in Australia.
Software development rates in Israelare pretty high. Let’s just compare: average salary of offshore software development team member in Ukraine is about $1,500, while in Israel a specialist junior will get $5,500 for the same work. Such striking difference results from the lack of tech expertise in the country and, of course, more stable economic situation in Israel.
Why outsource software development?
There should be clear reasons why more and more businesses are turning to outsource. Surely, there are. Offshore software development is beneficial in lots of ways. Some of the crucial ones are:
Outsourcing saves your money, since it provides more affordable options for businesses. That’s probably the prime reason why so many companies start to prefer this cooperation model. Why lower rates? As a rule, the average rates of software development in a region or a country depend on the stability of its economy, currency, and local market situation. Apparently, some states such as the US, Singapore, Australia, Western Europe have much more secure economic situation and, consequently, higher rates. At the same time, most of the developing countries (let's take Ukraine, Brazil, India, Algeria, Russia) with low income per person offer more affordable prices due to their less elaborated economy.
Yet, cheaper does not mean worse. Although we used to think that cheaper things result in worse quality, it’s not always an issue for IT outsourcing. In some countries, such as Ukraine or Poland, quality of offshore software development is pretty high and supported by an extensive educational background.
Outsourcing is not always about just hiring developers, it’s also about obtaining proper & deeper tech expertise. As experienced as it can be, your in-house team would never provide such a wide perspective as developers who work offshore.
Their key advantage is their diversified portfolio. While working in outsource, developers deal with numerous databases, dozens of languages and tackle hundreds of totally different business problems. That’s what makes the offshore team so precious. Having worked on the projects similar to yours, an offshore software development company can refine your idea while avoiding mistakes you could have done.
Offshore development is also time-saving. Hiring a remote development team you free yourself from wasting time and money on resource-consuming HR and admin processes: candidates interviews, recruiting procedures, onboarding, risks of quitting, pages of internal documentation and on and on. Your outsourcing partner is now responsible for all these ‘headaches’, while you can go directly to development.
Additional professional perspective
Having a business idea or a project in mind, it’s super important to discuss and analyze it with a professional team who will give you fair and qualitative feedback. That’s where outsourcing may come in handy, too.
Offshore software development means to pass your project to a whole team of professionals including business analysts, marketing specialists, UI/UX designers and project managers. They can give you a fresh perspective on your business idea, outline some ways to optimize it if necessary, find your strong and weak points.
The time difference is generally considered as a negative factor in the development process. Yet, sometimes it can play in your favor. Consider time shift as a bonus which allows you to see the results of your late evening comments early in the morning. While you’re sleeping, your outsourcing partner is working to make your app slick
How software development rates are formed
Software rates differ from region to region. But why? Obviously, you are aware of some basic price-constituting factors, but still, let’s quickly overview them.
- Technology stack: the rarer and more complex stack you need for your project, the higher developer skills you require. Consequently, the developer’s rate per hour will go up. If necessary, you can always get rough estimates for your web or mobile application development using various free online app calculators.
- Outsourcing destination: as we have mentioned before, the region’s specifics define the development costs. Countries with higher living standards set bigger rates respectively.
- Experience & reputation: the more experienced team you choose, the higher fares they charge. The same goes with the reputation. Basically, you pay more for security and reliability of your project’s results.
- Team size:you pay for every specialist engaged in your project. The bigger scope of works and roles — the higher cost.
- Cooperation model:in general, outsourcing can be split into two basic options — IT outsourcingas it is or IT outstaffing.
Outstaffing presupposes that every member of your team is hired specifically for your project. So, all HR and administration processes are done by the vendor, while you have to manage a development process. With this model, you primarily save money by doing project management yourself.
With IT outsourcing, you hire the in-house team of another company. In this case, project management is on the side of the outsourcing partner. While such a model may cost more, it puts the responsibility for achieving your project goals on the partner and enables you to concentrate on some strategic activities. Besides, outsourcing also offers various payment models: dedicated teams, time & material and fixed price.
Wrapping Up: Offshore Software Development
This guide provides a detailed rates comparison in the main IT outsourcing hubs around the world. All of them are worth of your attention. Some offer lower rates, others — better quality or smooth communication. Yet, the final decision is always up to you.
At Fulcrum, we believe that IT outsourcing is not about just finding a work labor, it’s about much more. About finding a reliable technical partner. About strengthening your project with the expertise of professionals. Sharing common goals and fighting for the success.
So, all you need is to focus on your business goals. With a team which will root for your project. Will help to turn it into success. Will be reliable, experienced, and always there for you. We have already done it for our numerous clients. We are here for you, too. Just find time to tell us more about your project.
FAQ: Offshore Software Development Rates by Country
How to hire offshore software developers?
To hire an offshore development team, you should keep in mind rates, development quality, culture, expertise, time differences, and other factors. When it comes to rates, there are two big pools of outsourcing destinations:
- Countries/regions with high-quality life standards and stable economies - the US, Australia, Western Europe, Israel, UAE, etc. The rates vary from $50 to $150.
- Regions with less developed local markets - Latin America, Afrika, Asia and Eastern Europe. They have lower offshore development rates.
Why do offshore software developers rates differ?
Software rates differ from region to region based on the following factors:
- Technology stack - the rarer and more complex stack you need for your project, the higher developer skills you require.
- Outsourcing destination- countries with higher living standards set bigger rates.
- Experience and reputation - the more experienced team you choose, the higher fares they charge. You also pay more for the security and reliability of your project’s results.
- Team size - the bigger scope of works and roles the higher cost.
What are the outsourcing rates in Ukraine?
Average offshore software development rates in Ukraine are around $25-45 per hour.
What are the benefits of offshore software development?
Offshore software development is beneficial in many ways:
- Most developing countries with low income per person (e.g. Ukraine, Brazil, India, Algeria, Russia) offer more affordable outsourcing rates due to their less elaborated economy.
- Outsourcing also means getting proper and more profound tech expertise. Developers deal with numerous databases, dozens of languages and tackle hundreds of totally different business problems. Having worked on projects similar to yours, an offshore software development team can refine your idea while avoiding mistakes you could have made.
- By hiring a remote development team, you free yourself from wasting time and money on resource-consuming HR and admin processes.
- Offshore software development means passing your project to a team of professionals in their field, including business analysts, marketing specialists, UI/UX designers, and project managers. They can give you a fresh perspective on your business idea, outline some ways to optimize it if necessary, find your strong and weak points.
- While you are out of the office or stay with your family after a long working day, your outsourcing partner is working to make your app slick.