In the world of digitalization and rapidly evolving software technology, the need for new, efficient, cost-effective software and outsourcing software development has increased. Another reason behind this is that there is a technical solution to almost every day-to-day problem. From clothes to food and business insights to invoicing, everything is just a matter of clicks now.

 Due to this, outsourcing has been around for quite some time, as companies always look for cost-efficient ways to manage specific business processes off-site. Earlier, companies used to outsource only certain things like customer support, accounting, recruitment, etc. But now, firms have also started software outsourcing.

 American and Western European companies outsource tech jobs because of the talent shortage, high development costs, and cut-throat competition in the employment market. This has led to the shift from a cost-efficient to cost-and-quality-driven approach, while choosing a tech vendor has opened the doors for the software outsourcing companies in India.

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software development

Top Stats Related to Software Outsourcing for 2021 and Years to Come

  • APAC Held the Most Significant IT Outsourcing Market Share in 2019.

The Asia Pacific region or the APAC held the largest market share in 2019. The area is expected to provide several growth opportunities to market vendors during the forecast period, i.e., 2020-2024.

Revenue in the division IT Outsourcing is predicted to reach US$77,782.0m by the end of 2021.

  • The contract value of the information technology outsourcing market worldwide 2000-2019.

In 2019, the global market size of Information Technology Outsourcing (ITO) amounted to $66.5 billion. Another survey says that 70% of technology companies in the UK are expected to face a talent shortage in the next 12 months. 

The largest economy globally, the United States of America, also faces a shortage of technology talents. Gartner, a global research and advisory firm, predicts that 1.4 million computer specialists’ job vacancies are on the rise this year.

Related Post – How Much Does a Custom Software Development Cost?

  •  India’s IT Service Market to Reach US$ 98.5B in 2022.

The domestic profits of the IT industry are predicted at US$ 45B, and export revenue is predicted at US$ 150B in FY21. As per Gartner, IT spending in India is supposed to reach US$ 93B in 2021 and a further boost toUS$ 98.5B in 2022.

As per the IDC (International Data Corporation) Worldwide Semiannual Software Tracker 2H20, the Indian software marketplace is predicted to reach US$7.6B by the end of CY21. This will definitely increase the demand for software development companies in India in the upcoming time. 


  • The International Data Corporation (IDC) predicts the IT services in India to grow at a compound annual growth rate of 8.6% during the forecast period 2020-2023.

Another fantastic stat to look at is that the Indian Brand Equity Foundation (IBEF) has predicted that the Indian software and IT industry will successfully achieve a target revenue of $350 Billion by the financial year 2025.


  • In a survey held by Deloitte, 78% of the respondents felt positive about their outsourcing relationships. 

Almost every major company has invested in software outsourcing. This is why 65% of the firms that have outsourced in 2017 are likely to continue to do so in the future. 

Outsourcing generates massive employment across numerous developing nations, including Ukraine, India, the Philippines, Poland, China, etc. Around 300,000 jobs are outsourced from the United States to these nations on an annual basis. [Smallbizgenius]

  • 37% of small businesses presently outsource at minimum one of their business services. Nevertheless, it is companies with over 50 employees that are 66 percent more inclined to outsource their business processes. [Clutch]
  • Despite, or maybe due to the COVID-19 pandemic, the portion of the funds IT departments use on outsourcing proceeded to increase from 12.7% in 2019 to 13.6% in 2020.


Another question that arises here is why companies feel the need to outsource?

  • 59% of companies outsource for cost-cutting.
  • 57% of companies outsource to focus on business objectives.
  • 47% of companies outsource to solve capacity-related issues.
  • 31% of companies outsource to enhance service quality.
  • 28% of companies outsource due to critical business needs.
  • 17% of companies outsource to manage business environments.
  • 17% of companies do outsourcing to drive broader transformational changes.

 Major Tech and IT Updates:

  • Nasscom, a trade association of the Indian Information Technology and Business Process Outsourcing Industry, has launched an online platform. The main aim of this platform is to train and up-skill over 2 million technology professionals and another 2 million students and potential employees. 
  • In February 2020, Tata Consultancy Services bagged a project worth $1.5Billion from a renowned pharma company Walgreens Boots Alliance.
  • Infosys has acquired a 75% stake in ABN AMRO bank’s subsidiary Stater. This stake accounts for $143.08 Billion.
  • In January 2020, Nippon Telegraph and Telephone, a renowned Japanese tech company, announced its plans to invest a significant part of its $7 billion global commitment for data centers business in India over the next four years (2020-2024).

Now, let us look at trends that are expected to emerge in the year 2020 and boost the outsourcing industry.

Software Development Outsourcing Trends to Emerge in 2021

The outsourcing industry continues to evolve, and like every year, specific trends have been predicted to perform well this year. The trends are as follows:

  • Robotics Process Automation(RPA)

Artificial Intelligence is becoming the first choice of almost every business owner. The use of AI and other advanced technologies to automate processes is rising. There is a prediction that by 2030, 40% of the jobs in the US will be automated. In the context of outsourcing, your business process outsourcing (BPO) company has to maintain the balance between delegating smaller tasks to bots and non-repeatable roles to humans. 

  •  Social Media as a Channel to Interact with a Customer:

In the digital world, where almost everyone uses social media, it becomes easy for software outsourcing companies to find their potential customers. This is because Facebook alone has 2.3billion active users. Also,  software outsourcing companies in India are experts in using social media tools and features to help you generate business.

  •  Cloud Computing

The growth of the cloud services statistics world is so significant that it has already started to impact virtually every primary industry today. The cloud services statistics software market was valued at $18.08 billion in 2015, and it’s expected to reach $88.41 billion by the end of 2021, registering a CAGR of 19% between 2016 and 2021.

The digital world is making it possible for businesses to deal with tons of data collected from customers. Even if you are a small business, you need to backup your data safely, and this is where IT outsourcing companies come into action. 

With cloud computing, you can rent out your provider’s IT infrastructure on a pay-per-usage basis to accommodate your server, storage, or networking needs. All this without having to invest a large sum for developing or owning an in-house technology.

  • AI and IoT in Software Outsourcing Market

While the development of AI is growing faster every year, only a few enterprises are actually leveraging this technology to boost their business competitiveness. While there are technical challenges for AI adoption, software outsourcing firms can help overcome these hurdles and facilitate smooth enterprise integration of AI with the help of experienced AI developers.

Summing Up:

Software outsourcing has opened the door to many jobs and opportunities for the talented youth of a country. It has also benefited businesses in many ways. The most prominent one from them is “cost-cutting.” But globally speaking, the outsourcing market is very competitive. Every year there is a change in the ranking of a country. 

While every outsourcing expert country is trying hard to gain the top spot as a prime outsourcing destination, there are only a few perennial powerhouses that should be considered. If you also own a business and want to outsource your software, then you must get in touch with the best outsourcing software development companies in India because only an expert can help you come up with the best results.



Q1: How Much Does Outsourcing Software Cost?

A1: Software outsourcing development can be done at an hourly rate of $15-$45 for junior specialists and up to about $50-$100 for senior engineers. Your price will vary depending on where in the world you’re doing it, but in general, it is much more expensive in Western Europe and the U.S. than in Ukraine or India (where most of our clients come from).

Q2. What are the Advantages of Software Outsourcing?

A2:   The advantages of software outsourcing are numerous. It is usually more affordable than hiring in-house; the quality is often better because you can hire freelancers with very specific skills instead of people who are good at everything but not necessarily at the thing your project needs; you can get things done faster. After all, people work online and don’t have to commute or work in an office, and your employees are not under your constant watch.

Q3: When Should You Outsource Software Development?

A3: If your budget is limited, or you simply can’t find a decent software engineer in your local area, outsourcing makes sense. Suppose the project is very small and simple enough to be done by one person who knows both the technical aspects of the programming language and the functionalities you need to develop. In that case, it doesn’t make much sense to hire a whole team when you can just hire the man who builds the product.

Q4: How Do You Manage Outsourcing Developers?

A4: Managing your outsourced developer is more or less the same as managing any other employee. However, you’ll get a better result if you treat them like you would an employee in your local office, instead of treating them like a robot who doesn’t need to be paid attention to. However, you can follow the general rule of outsourcing: 

  • Be clear about the work you expect from your developer. You can’t be abstract and general, or else you won’t get what you want. Therefore, be as specific as possible and explain every step in detail, so there is no room for misunderstandings.
  • Communicate regularly with your developers: keeping updated about what they are doing is crucial. If you let it go too long, the developer may start to forget about what is l, which might lead to rework. If you have a deadline set for a specific part of the software project, make sure your outsourced developer meets it or at least doesn’t come asking for updates while there’s still a lot of work to be done.
  • Keep an open relationship between you and your outsourced developer. It is a must: if anything goes wrong or you find any bugs, don’t hesitate to contact the developer as soon as possible so that they can fix it before it’s too late. Even if there’s no immediate danger, tell them about your concern and let them fix the problem. Communication is key here.

Q5: Which Company is Best for a Software Developer in India?

A5: That depends on what you need. Many companies in India offer software development services, especially outsourcing to the U.S., but only very few are good enough for working with an American company. Some of them are:

  • PixelCrayons
  • ValueCoders
  • Fingent
  • Capital Numbers
  • Daffodil Software
  • Bacancy Technology
  • Trigent Software

Q6: What Should You Consider Before Outsourcing?

A6: Here are some of the most important things you should consider before outsourcing.

  • Research specific companies in your country/region. Ask them questions about what they can offer you, how much it would cost, etc.
  • Make sure the company or individual that will provide you with software development services is experienced enough in the field of work you need to do for your project. Therefore, ask previous clients if they were satisfied with the work. If not, find out why they weren’t satisfied and see what the company/individual can do to fix that problem for you.
  • Check if the outsourced developer regularly contacts you because it doesn’t make sense to hire someone who won’t communicate with you about your project or ask for updates about your goals.
  • If the outsourced developer is not good enough, or you don’t have time to manage them, consider hiring an outsourcing company instead. This way, they will find the right people for the job and make sure everything goes smoothly without bothering you with details beyond your area of responsibility.

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