Software Development Statistics: Market, Tools, and Companies

Yes, cloud migration is a demanding and costly process, but more and more businesses are planning to switch from on-premise to cloud-based data storing. The global tech talent shortage amounted to 40 million unfilled jobs in 2020. By 2030, the shortage is predicted to reach 85.2 million workers. During these 10 years, the skill shortage will cause an $8.4 trillion loss in revenue for companies worldwide. And the value of the IT outsourcing market is expected to grow by about 5% each year in the years 2020–2024, according to the Global Industry Analytics report.

Across sectors, an average of almost 60% of organisations outsource app development. In the financial services sector, that rises to 72%, followed by retail/wholesale companies at 60%. Further down the list are companies in the healthcare sector at a relatively modest 31%.

  • This would give India the opportunity to take the lead as the world’s most technologically capable nation, with an expected 1 million IT professionals by 2030.
  • Deloitte holds second place, with a $47.6 billion revenue and 330,000 employees.
  • 29% of software developers contribute to open-source software to improve their coding skills.
  • However, help desk outsourcing trends suggest that help desk outsourcing is not that frequent in the IT sector.
  • This idea of tinkering with code is what many software developers find attractive.

Given that experts predict that this number should grow to 28.4 million by 2024, there are an estimated 24 million developers globally in 2020. Outsourcing can be an excellent way for companies to get software developers they can afford and rely on for quality results. The majority of software developers use JIRA as their leading project management system. It’s comprehensive and flexible, which many of its users appreciate.

The Ultimate List of Outsourcing Statistics for 2022

Due to the large talent pool available and the high-cost savings, India is still dominating the outsourcing market. According to a review of multiple studies done in 2021, India was the top choice for outsourcing offshore for companies around the world. Outsourcing industry statistics show that the number of companies that outsource essential processes and tasks in 2022 and beyond will significantly increase.

Next to India, the Philippines is another leading outsourcing destination. The country, though considered a late bloomer, has held the title “The BPO Capital of the World” since 2010. Despite the challenges brought by the pandemic, the country still managed to place second in the Tholons Top 50 Digital Nations and 17th in the Kearney Global Services Location Index this year. The country also has 14 super cities listed in the Tholons report. In terms of IT outsourcing efforts, companies will continue to utilize cloud solutions which are expected to reach “a monumental $760 billion” by 2027.

Eventually, China’s human resources outsourcing market will probably reach an $8.2 billion size by 2027. Japan and Canada are another two HR outsourcing markets that will grow at a 4.4% and 4.2% rate during the same period. Legal process outsourcing trends estimate that the worldwide LPO market size will reach $40 billion by 2024. IT outsourcing statistics show it’s one of the industries most affected by outsourcing business processes.

The types of business process outsourcing services that are constantly growing and in high demand include IT, marketing, and sales. In this blog, we’re going to break down key outsourcing statistics to know, along with some of the most popular trends and how many jobs there are in the outsourcing market in 2022. Despite the pandemic, some tech businesses even decided to increase their IT budgets, outsourcing statistics from 2020 show. Others collaborated with their offshore and nearshore IT outsourcing partners.

24.5% of all organizations are going to increase outsourcing efforts or outsource for the first time in 2021.

Considering that this market size was $3 billion a few years ago, we can imagine how high this increase will be. Application development is one of the most frequently outsourced IT functions in 2021. More than 60% of tech companies are outsourcing at least a part of their application development. The tech talent shortage is the major long-lasting trend that has been fueling the IT outsourcing sector for the last decade.

software outsourcing statistics

With more than 240,000 developers in the country, Ukraine is one of the biggest European talent pools and arguably the best one when it comes to quality and hourly rates. The same goes for many Central and Eastern European countries, especially Ukraine. This is one of the top outsourcing destinations in Europe thanks to its vast talent pool, low hourly rates, and consistent quality across the board. This also touches software developers who operate at much lower hourly rates. It makes sense for US-based companies to outsource their projects to developing countries nearby. Mexico, Argentine, Chile, and Columbia are the perfect fits here.

The most popular software outsourcing services are software development, application development, and IT services. Software outsourcing is the practice of hiring a third-party company to develop and maintain software applications for a business. This is often done to reduce costs, increase efficiency, and access specialized skills, resources, and new markets. Outsourced IT services vary from programming and application development to technical support. In fact, it is possible to outsource entire IT departments, often to large companies, allowing organizations to reduce operational costs and focus on their core tasks. Oftentimes, the teams of such skilled experts come from the outside, as the Agile companies are more likely to cooperate with outsourced developers.

How much has outsourcing increased?

Software application development is the most frequently outsourced IT services function, with around 60% of companies outsourcing this function in part or in full (US & CA). This year, the USA managed to rank first out of 50 countries in Tholons Digital Nations, followed by India. The country is popular in tech support and IT-related services. Below are the remarkable US outsourcing statistics for this year. Yearly, different research institutions list the top countries acquiring outsourced services. They usually base this on aspects such as workforce population, literacy rate, and access to the latest technology.

software outsourcing statistics

The largest export countries of information & communications technologies are large or well-developed economies like India, USA, China, UK, Ireland and Germany. However, the graphic below shows how important IT exports are for Eastern European countries, for whom IT services account for a disproportionate share of overall service exports. The majority of outsourcing market transactions are digital-focused, while only around 30% are pure traditional services.

Outsourcing in the Philippines can reduce costs by 70-90%

In most cases, project management and quality assurance take up 15% each. As we can see from the 2020 software development jobs statistics, the it outsourcing trends number of software developer job postings decreased by 8%. Senior software developer postings suffered a little more, slimming down by 11%.

software outsourcing statistics

The US has the most percentage of outsourced jobs in the world, with almost 68% of companies delegating their services. The UK, meanwhile, has around 48% of companies offshoring business functions with talent shortage as the main factor. Freeing up resources to focus on core business is the most widely cited reason for outsourcing IT functions, at 49%. About 45% of companies outsourcing IT functions say that their information technology outsource projects are meant to save money. About 46% say outsourcing lets them access skillsets that aren’t available in-house.

IT functions outsourced worldwide 2017

Software developer job growth outpaces many other professions by miles. The average growth rate of all occupations in the U.S. economy from 2019 to 2029 is around 4%. Walmart is one of the top five US companies that outsource jobs overseas.

Functions with the greatest potential for improving service through IT outsourcing are IT security and disaster recovery (US & CA). The next most common IT outsourcing functions are Network operations at 27% (US & CA). In fact, 83% of IT leaders with in-house security teams are now considering outsourcing their security efforts to an specialist provider .

Almost 60% of US marketers didn’t see any COVID-related changes in the outsourcing marketing activities

Research tells us that the Philippines has a much lower cost of living than other countries. So, foreign companies can cut their labor costs by outsourcing to the Philippines and still have well-paid workers. By examining and comparing data, we’ve been able to identify why companies in the US decide to use outsourcing as a business strategy. Again, we’ve covered data on outsourcing in some other countries for the sake of comparison. Software development market statistics of the tech countries — Poland, Ukraine, Romania, Czech Republic, Hungary, Bulgaria, Belarus, and Croatia.

Why is outsourcing popular now?

However, the state of the matter shows us that the vast majority of companies still use it, even though US citizens might disapprove of outsourcing. Check out what happens with outsourcing in the US and worldwide. However, almost a fifth of the marketers have noticed an increase in the same activities. Network operations dropped in IT outsourcing volume from 34% in 2019 to 27% in 2021. The World Economic Forum claims that the number of permanent remote workers is set to double in 2021. 51% are planning to hire a full-time cybersecurity team during 2021.

Asia-Pacific software outsourcing statistics

The MSP market is to reach $41 billion by 2022 due to outsourcing security functions. It’s expected that it will register a CAGR of 4.5% between 2021 and 2026. When it comes to market shares, India will be one of the leading countries.