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There are four main categories for software development industry, known as programming services, open source, system source and software as a service. Programming services is perhaps the longest existing software industry. Microsoft, IBM and Oracle were too once upon a time simply programming companies. Open source is the newer version of this industry, including cloud systems and more and better operating systems. System services, as the name tells, is the segment of the industry that relates to the processes necessary for the functioning of both older and newer software systems. Finally, software as a service can be understood by the software that is created and kept on the creator’s server and its access is allowed to clients through the internet or the cloud.


According to the report “Decoded: An Insider’s Guide to the Software Outsourcing Industry” released by SourceSeek in 2018, the average hourly prices across the software outsourcing industry were $32.33. Although it is notable that region and demand of a particular software can notably impact the rates for outsourcing.

Outsourcing industry on its own is gaining popularity rapidly and big and small businesses are realizing the benefits of outsourcing for efficiency, productivity, and profitability. Software outsourcing industry is no different. A study by Computer Economics in 2018 showed that larger organizations have increased their IT budgets spent to 8.7% and medium sized businesses spent approximately 6.5% of their budget on IT. Smaller businesses are often not that well documented, therefore it is difficult to determine the exact IT budget, but a glance around the business industry will show that smaller businesses are not immune from the allure of the outsourcing when it comes to achieving targets of efficiency.

  • Application development is one of the key areas where both large and small businesses are increasingly relying on outsourcing. The fact that app downloads have almost doubled from approximately 167 billion in 2015 to around 254 billion by the end of 2017 only means that this segment of outsourcing is nowhere near a slow down or decrease.
  • Security of software and computer programs is becoming an increasingly significant concern for businesses. This means that hiring external companies for software development has become all the more attractive for businesses that wish to keep their secrets even from their own workforce.
  • Internet of Things (IoT), the hot concept of modern IT industry, neared an investment figure of $737 billion in 2016, according to some estimates, and is likely to touch $1.2 trillion by 2020. Although IoT is gaining popularity unhindered, the qualified personnel to build and operate the software are not increasing comparatively, making the hiring of such professionals extremely expensive, that is if they are available. This is also why businesses are moving towards outsourcing than hiring in-house experts.

Need more reasons than the ones mentioned above? It is not just the industry dynamics or a trend that is making businesses move towards outsourcing. There are tangible and real benefits attached to outsourcing software development, for every industry and business sector.

Cost Cuttings

It goes without saying that when you let an external partner take care of any of your business segment, that being a part of business for you and core activity for your outsourcing partner means you will be paying much less for the exact same work. According to an independent study carried out in 2017, outsourcing can reduce up to 70% development costs.

Reduce Dependency on Support and Time Expense

Software is not something that can be created once and be done and dusted with. It needs to be constantly updated, cleaned of possible errors and viruses, and also be infused with any new developments leading to its higher operational efficiency. This means that even if it is costing you less initially to build software in-house, eventually the maintenance will become more expensive for you. Outsource this segment and remove all worries and responsibilities of management and up gradation.

Access to Experienced Developers and Latest Tech

As explained earlier, the speed of technological advancement is faster than the resources qualified to deal with this advancement. Instead of worrying about finding and hiring the appropriate, and very expensive resource yourself, let your outsourcing partner take care of it. Same goes with technology availability. Since BPO companies are handling software development as a business and not as a means to a business, they are almost always likely to have better technology enabling better software for you.