What is Software Outsourcing and How Much Does it Cost?


Are you looking for a software development company to build your software? Then, thanks to software outsourcing service, you can get the development skills and expertise at your disposal and relatively at lower costs as compared to the ones that you need to bear when you hire an in-house development team. When it comes to software development, you can always opt for local software development companies and may also choose from the variety available in nearshore or offshore software development services provider. Nonetheless, whatever decision you make, you will soon find out that every region and country has its own defined set of rules and criteria that it follows, and these difference usually lead to significant cost and price variance. Differences in costs are mainly due to the economic situations within the region, average wage rate within the country/region and also level of skill and expertise that the developers possess.

In addition, there are many outsourcing models: nearshore development, offshore development and staff augmentation. Sounds confusing, doesn’t it? Not sure which option is right for you? But, you don’t need to worry about it because we will try explaining you all the important things that you may know while costing software development.

How Much Does Software Development Companies Charge Hourly?

To keep it simple, let’s just classify the world into 4 different regions i.e. Europe, North America, South America and Asia. These are the four main regions that anybody will be looking today, in order to get software development services, development skills or expertise. So, let’s have a look at each of regions and the hourly rate that their developers charge for an hour.

How Much Do European Software Developers Charge Per Hour?

In Europe, the price is typically between $ 20 and $ 170 an hour. If we compare Western Europe with Eastern Europe and Central Europe, we will find that Western Europe is way costlier that the other two, whereas the developers from Eastern and Central Europe are also easily accessible. But off course, you can still not find prices, because the costs among the European regions may also vary. Language barriers are usually not a problem as English is taught to a high standard in most European countries and software companies usually expect their developers to have a high level of professional English in order not to limit themselves to theirs. Borders of the country.

How Much Asian Developers Charge For Software Development?

Asia is globally known for being a great outsourcing hub for all type of skilled and less skilled employees, mainly due to the low cost of production and low wage rate. In fact, Asia is one of the first region when people talk about outsourcing. Hourly developer rates start at an incredibly cheap $ 10, sometimes as high as $ 60-70, and in some extreme cases even $ 150 per hour. Since the prices are very attractive, they easily attract client companies from worldwide, and this is also the primary reason why project outsourcing to countries like India and Pakistan are so muc in trend these day.

However, while working with Asian developers, one of the biggest issues is to find authentic vendors with good credibility and market strength and also that the services they offer are usually very limited. Finding a reliable and trust worthy software development partner is quite hectic task. But it is certainly not impossible, because there are many reliable software companies with credible profiles too that you can easily find on LinkedIn. Given the huge difference in experience, skills and professionalism, finding really good Asian development agencies will be more of a luck than a great due diligence.

Although it is a real struggle to find credible software development companies who at least do not distress you with outdated libraries, poor codes and unorganized documentation. On contrary, there are multiple highly reliable and reputed companies such as Viftech Solutions, etc. that are providing very consistent and satisfactory software development services in Asia.

Also Read → Why ERP Software is Important For Business or Organization

How Much Do Latin American Software Developers Charge Per Hour?

It may seem that Asian providers offer the cheapest hourly rates, but in reality, Latin American companies may offer even cheaper IT services. Hourly wages range from $20 to $50, or around $60 in Mexico, which tends to be slightly more expensive than other countries in the region. When it comes to this region, communication turns out to be a significant problem. Because people in Latin America are more fluent in Spanish and communicating in their native language and precisely delivering the instructions is often very challenging.

In addition, this region has never been known for its great developers, which may change in the future. Dealing with Latin American suppliers can be challenging right now and chances are it won’t bring the results you want.

How Much Do North American Software Developers Charge Per Hour?

We mentioned North America, but let’s focus on the US. Being the biggest and the most advanced technology hub, it always remains the first choice of every company when it comes to software development services. Undoubtedly, the hourly rates that you will find her will surely be the highest in the world. Average US prices start at $ 50 to $ 100 per hour for junior developers and can range from $ 140 to $ 200 per hour for senior developers. Average software development cost in America can simple be double of Europe and may be tripled of Asia. This is why so many companies choose offshoring and work with European and Asian Developer and service providers.

So, What Costs Factors You Must Consider While Costing Software Development?

In sum, the cost of developing custom software can vary significantly and depend on many factors, such as: For example, in which part of the world you outsource, or will you hire an in-house software development team, or do you just need a particular part or a module to be outsourced, or is that the entire project that you would like to outsource. Equally, what set of skills, expertise and experience do you need for your software development project. Junior developers are found to be less costly as compared to experienced software developer. Often, the more experience the software developer will uphold, the higher will be his hourly rate. Not only is seniority a reason to ask for more, but the experience of older developers allows them to be faster, more productive and more economical in the long run than a team of young people.