Remote work has significantly boosted the offshore development market, which reached a value of around $100bn in 2019 and is projected to continue growing. Around 60% of IT organisations outsource some of their IT projects, including Software Development, and nearly 70% of these organisations report cost savings as the number one reason. According to forecasts, over the period 2023-2027, global revenue will increase by $66 billion, and the IT outsourcing market will gain at least 42%. The market is anticipated to touch $223.17 billion in revenue by the year 2027.
Offshore development, provided by professional agencies, offers competitive pricing alongside high-quality service. However, the cost of these services can vary significantly based on the region. To make an informed decision, it’s crucial to understand how these costs differ across various countries, which we’ll explore in the following sections.
Software developer hourly rates of offshore development services vary greatly from country to country. For instance, in 2024, hourly rates in India may vary from $20 to $45, and on the North American continent, from $120 to $250. There are also large discrepancies in hourly rates in countries such as Colombia, Ukraine, and Poland.
To make sense of these cost variations, it’s crucial to understand the concepts of offshoring and outsourcing and how they differ. Let’s briefly explore these concepts before diving into the specific cost details.