The state of the economy and technologydictates the characteristics of software development services and their costs.Customers intending to sub-contract IT services have classified the outsourcingregions as onshore, near-shore, and offshore zones. Classification is donebased on the distance between the clients and the service providers. Onshoreservices providers are those within the same country with the client, whilenear-shore providers are located in bordering countries. Offshore are providersin countries with four time zones away from the client.
1. North America
USA and Canada have the leading softwaredevelopment companies in North America. Differences such as locality, task andtech load dictates the payment rates usually ranging $77 to $300 hourly.Silicon-Valley in San Francisco is the most popular high-tech hub in theUSA. Dominant companies in the industryincluding Apple, Google and Facebook are headquartered here. Highest hourlyrates for software expertise are paid here. As such Canada is set to lose200,000 IT professionals to the United States by 2020.
These trends are brought about by theexperience of the US in IT industry globally, economic stability, high wagesand preference of most clients to sub-contract within the country.
2. Australia and Oceania
Though a worthy player, contracting-out ofIT in this region is smaller compared to North America. Its worthiness isattributed to the smaller size of the market which attracts technologicalstartups and innovation. Experience determines the pay in this market, oftenranging $35 to $150 per hour. Although the geographical location of Australiaand Oceania translates into high travel and software development costs, theyare bursting of creative software developers with non-standard ideas. They alsoboast of transparent economic and political conditions.
3. Western Europe
Economic prosperity and high levels ofdevelopment in these countries make software development services costly.Averagely, Western Europe IT specialists pocket $35 to $175 per hour. Most oftheir work is onshore since their remuneration contradicts cost-effectivenesswhich is the leading reason for sub-contracting. Specialization of the industry on localneeds, high level of well-being amongst residents and favorable governmentregulations on the sector propels it. Pricey software development expertiseworks against the industry.
4. Latin America
By 2019, Latin America IT industry will be at 5.8% CAGR signifying a rapid growth. Mexico, Argentina, Brazil, Colombia, and Chile are leading the pack. Large workforce charging comparatively low hourly rates of $40 to $70 makes it a likely outsourcing destination. Government support and little time zone differences with the Western part of the world works for it.
The two major downsides of IT outsourcing to Latin America are the lack of political stability and the language and cultural barrier that must be overcome.
5. Eastern Europe
Entrepreneurs from the US and Western Europe have relocated here making the region an attractive outsourcing destination. Poland, Ukraine, and Romania are leading the pack. Hourly charges stand between $20 and $110. Biased prejudice, language barrier and dissimilar work ethic have not disadvantaged the industry. Most of their clients are in the United States and the UK. Skilled workers, cost efficiency, focus towards Western countries, many IT outsourcing companies recognized globally has spurred the growth
Eastern Europe has become an attractive location for offshore software development mainly due to the affordable prices, high-quality services, wide talent pools, convenient time zones, and effortless communication.
Low labor cost and a large number of software developers make India a major IT outsourcing market. Hourly rates here are at $20 to $35. Indian companies’ failure to incorporate new technologies in their development routine and post-production support disadvantages her.
Another common argument that is against working with Indian engineers is all about the difference between the time zones.
China, Malaysia, and Indonesia lead the pack. China and Malaysia come in second and third respectively in the ranking of most accepted business process outsourcing spots. Malaysia specializes in animation and gaming. China, on the other hand, boasts of cheap labor and low production costs ranging from $50 to $100 hourly. Malaysia and Indonesia charge $30-$40 hourly.
The main drawbacks of Asia are the fact that it is more expensive relative to offshore rivals such as India or the Philippines and the low quality of English skills, even in large cities like