Custom software development is currently popular. Businesses, whether tech-savvy or not, are seeking reputable software development companies. Now the main question is how to estimate the cost of software development. The following blog focuses on choosing the right offshore software development services at appropriate rates. However, the blog also includes information on offshore software development rates across different countries, tips for selecting a reliable company, and discusses whether it is advisable to hire an offshore development company at a significantly reduced cost.
What exactly is offshore software development? It is a process of hiring third-party services from another country at a reasonable price. This concept is growing at an immense rate. And why not consider hiring offshore software development companies? They can offer a wide range of advantages such as customized solutions as per the organization’s needs and scope, streamlining the business procedures, and enabling companies to focus on their core activities.
Now, what can you expect from an offshore software development company? Well, some common offshore software development services include bespoke software development as well as mobile apps and web app development. Apart from these services, other aspects include:
- Lower costs
- Exclusive access to a large talent pool
- Faster Time-To-Market
- Save Time To Focus On Core Business Activities
- Time Zone Differences
- Easy business expansion
- High-end innovation
1. Classification of Offshore Software Development Rates
Over the years, hundreds of IT outsourcing hubs have been established all across the globe. Now what’s so amazing about these hubs is that you can find different companies from different offshore software development countries offering development services. Onshore software development is significantly more expensive and does not offer advantages comparable to offshore software development.
Certain countries such as the US, Australia, Western Europe, Israel, and UAE feature high quality of life and high costs of living. As a result, they have high offshore development rates ranging from 50$ to 150$ per hour.
Countries like Latin America, Africa, Asia, and Eastern Europe offer offshore development rates ranging from $20 to $50 per hour
2. Offshore Software Development Rates Among different Countries Across the Globe
Delve into the offshore software development rates among the different countries.
2.1 Eastern Europe
So you are willing to hire offshore software developers in Eastern Europe. Great! You have a vast pool of talent to pick from. According to estimates, the ‘IT Outsourcing’ segment of Europe’s IT services industry is projected to experience steady growth in revenue of 85.5 billion USD by 2028. Forecasts suggest that the indicator will reach 261.98 billion USD in 2029, following eight additional years of growth. You may find it interesting to know that the main outsourcing hubs in Eastern Europe include Ukraine, Poland, Romania, and Belarus where average offshore development rates for junior or senior developers range from $25-$65.
Wondering why? Well, these Eastern European countries have software developers with a strong fundamental base and experience. Another plus is their proficiency in English as a language. With strong fundamental knowledge, They possess strong communication skills.
Ukraine
Slowly and steadily, Ukraine has become renowned for software development outsourcing services in Eastern Europe. Around 38,000 IT specialists graduate each year from here, contributing to the rapid evolution of the IT industry located in Ukraine. Ukrainian software development companies offer services at an average hourly rate of somewhere $30-$60 per hour.
Poland
The next country in line is Poland. What makes Poland stand out in Eastern Europe are its lower offshore development rates and friendly tax regime. Not just that, they have highly skilled professional developers, with over 247,800 students graduating from prestigious universities every year in the information technology sector.
Another advantage of choosing Poland to outsource software development projects is that here almost every software developer is multilingual, especially in English, French, German, Italian, and Spanish. So communication is no longer a hurdle if your remote development team is from here. The hourly development rates start from $25 – $60.
Romania
Another top favored destination in Eastern Europe to conduct offshore development is Romania. This may be because the IT industry and offshore development companies in the region have become stable and well-established. Also, they offer highly competitive offshore software development rates.
Romanians believe in a people-first policy. Apart from this, they ensure to offer high education, particularly focusing on foreign cultures. People residing here are highly adaptable and demonstrate a supportive attitude towards individuals interested in partnering with their development companies. The hourly offshore software development rates start from $30 to $63.
Belarus
Belarus is another impressive country to consider when looking for offshore software development companies. When comparing offshore software development rates, Belarus offers the best prices.
On average, in Belarus, the cost of one hour of offshore software development is at least 2–3 times lower than in Western Europe and 3–4 times lower than in the USA. To be precise, Belarus offers the third lowest development rates in Eastern Europe, right after Moldova and Ukraine.
Other than money, quality is one such concern. Hiring offshore development teams from here means that the work their software developers do is very high quality and professional in nature.
Located in the center of Europe, Belarus offers minimal time zone differences. If you reside in the United States or Europe, Belarus is your sure-shot move. The hourly development rates start from $25 to $40.
2.2 Latin America
First, Agile and Scrum methodologies are among the best approaches that come to our mind when considering offshore development -right? And software development companies located here excel in that aspect. Furthermore, it’s worth mentioning that Latin America is in a similar time zone.
Second, here you may find a similar working culture.
Third, Latin America comprises software developers who possess more proficiency in English. Besides offshore software development rates in these Latin American countries typically range between $30-$70 for software engineers.
Brazil
This is no surprise that several IT hubs have opened up and experienced exponential growth, especially in Brazil. The reason is its impressive infrastructure, cost-effective development rates, and a bunch of skilled offshore developers with a proactive attitude.
Of course, an excessive talent pool is one of the obvious advantages but one shouldn’t avoid the infrastructural strength of Brazil’s IT sector. There are other huge tech parks in cities like São Paulo, Rio de Janeiro, Florianópolis, Recife, Porto Alegre, and Curitiba, where you can find experienced developers. The hourly development rates range from $18 to $60.
Mexico
There are numerous reasons to consider Mexico for your offshore development project such as its offshore software development rates, highly skilled and well-educated talent pool, favorable trade treaties, better infrastructure, proximity to the target market, and more.
One of the outstanding reasons here is the similarity in time zones. Mexico and the US are in the same time zone. This means that there is no significant difference in working hours. If anyone in the US is considering nearshore software development, Mexico would be the best option. Thus, time zone differences don’t hinder productivity. The hourly offshore software development rates start from $20 to $55.
Argentina
Argentina is also a renowned destination for offshore development. If you are looking for high-end communication, and exceptional services simultaneously, consider offshore software developers from Argentina.
Why Argentina? The country is only two hours ahead of the East Coast and five hours ahead of the West Coast during Daylight Savings Time. The hourly development rates range from $25 to $65.
2.3 Africa
Did you know that South Africa received the title of “Offshoring Destination of the Year” in both 2016 and 2018? Apart from India and the Philippines, South Africa has proven itself as a top outsourcing destination across the globe.
And since they have a lower cost of living, the offshore development rates can be relatively low. South Africa’s high adoption of next-gen technology positions it well for global competition. Offshore software development rates in Africa range between $25 to $50.
2.4 Asia
Asia is known for offering the best offshore software development rates. It provides the best of both worlds: quality and low development costs.
When companies hire offshore software developers from here, they can save up to 60% on their labor costs. It’s a fact!
Some Asian software development outsourcing countries.
- Philippines
- India
- China
- Thailand
- Vietnam
Each of these offers competitive offshore software development rates. By hiring software developers from Asian countries, businesses can find cost-effective offshore developer rates. The hourly development rates start from $20 to $45.
India
If you are considering going for an outsourcing company, ensure it is from India. One of the reasons is that India offers competitive rates for offshore development services in Asia. Based on a survey conducted by Deloitte, India remains the top destination for outsourcing jobs. Now, why prefer India for hiring offshore developers?
Receiving high-end services with a quick turnaround time is the pure magic offered by India. Apart from this, the favorable government policies, ever-growing economy and infrastructure, and an immensely large population make it a preferred choice for those seeking an offshore development team.
Moreover, India has a population of over 1.4 billion people, and yearly, the scope of a talented offshore developer continues to increase.
Also, here you won’t face any language or communication barriers. Indian developers excel in various languages, including English. The hourly offshore software development rates range from $18 to $40.
China
Another country to succeed as a world-class software outsourcing destination is China. Moreover, the country offers some of the lowest offshore software development rates.
The Asian country has made massive innovative strides like Alibaba, widely known to all. Located near the Asian and European markets, China is the prime location with numerous outsourcing companies. The hourly development rates range from $25 to $45.
Philippines
If you are searching for one of the leading destinations in the world for outsourcing software development, the Philippines is a prime choice. Today, you will come across several companies whose onshore offices are elsewhere that conduct offshore activities from the Philippines. These outsourcing companies come from various industries, from manufacturing to technology. The hourly development rates range from $20 to $35. Why the Philippines, you may ask?
- Cost-efficient
- English Fluency
- Better Quality of life
Singapore
Outsourcing to Singapore when it comes to software development, is quite interesting. A lot of people outsource their software development services to cut development costs, and it is a very smart move. The hourly offshore software development rates start from $20 to $50.
2.5 America
Many of you still debating whether to outsource software development in America or not. Fret not, here’s your answer! First and foremost, the price for certain offshore labor has gone up. But at the same time, both North American and South American web developers attract businesses from different parts of the world.
To be precise they offer a price between $50-$150.
2.6 Australia
Last but not least, Australia has the highest development rates among countries. Despite being a continent, there are Cities like Sydney, Melbourne, and Perth that are considered as best destinations for offshore software development.
Here the average software development rates range from $100-$150.
3. Factors Affecting Offshore Software Development Costs
Before estimating offshore software development costs, it is very crucial to consider two aspects: affordability and feasibility within the predetermined time. Other than these, certain factors affect the offshore software development cost in one way or the other. Let us go through those.
3.1 Offshore Development Location
Pay rates for software engineers differ greatly depending on location. The total cost of software development is significantly affected by the cost of labor, which relies on the skill level in a tech stack.
3.2 Which Platform is Being Used?
The first and foremost factor worth considering while offshore development is the choice of the platform. There are many options available, including Android to iOS, Microsoft Azure, Nodejs, Amazon Web Services, and Twilio. Choosing the right platform for the software development process is a crucial move, as it can significantly impact the cost.
3.3 Size of the Project
The next factor affecting the offshore software development cost is the size of the project. In the software development realm, a project is divided into 4 categories such as:
Small – If you just want to have certain minor changes like bug fixing.
Medium -This requires work up to an extent. For example, Third-party integrations
Large – As the name implies, this one might require integration with multiple systems or a complex business system
Enterprise – From developing an app from scratch to incorporating several third-party integrations.
3.4 Skills and Expertise of the Team
The expertise, background, and experience of your offshore team of developers have a direct impact on the final rates. A competent staff of senior developers is essential for complicated projects, but their fees could also raise the total cost.
3.5 Development & Testing
Avoiding rigorous testing and quality control might lead to headaches down the road. To avoid expensive rework and minimize the likelihood of post-launch errors, it is important to find and address issues early on in the development process.
If you want a better product, invest in thorough testing and regular quality assurance. Doing this will save you funds in the long term by avoiding costly maintenance.
4. Conclusion
Many factors affect the cost of offshore software development, such as geographic location, business profile, level of technical skill, applicable taxes, and nature of the partnership. Considering all of these factors will help you find the most suitable software development outsourcing solution for your demands and budget.
To succeed in the competitive international marketplace through outsourcing, companies need to carefully select the proper outsourcing provider. So, if you’re looking for an outsourcing provider, consider TatvaSoft. Contact us today!
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