Top 10 Offshore Software Development Trends for 2022 You Don’t Want to Miss
As the software world becomes increasingly globalized, the trend of leveraging offshore development talent is likely to move from a “trend” to a “norm.”. Offshoring software development allows startups and high growth companies to increase their competitive edge through the reduction of operational costs and staff flexibility while allowing for quicker speed to market.
All of these factors are fueling offshore software development trends. The global market for tech offshoring was around $526.6 billion in 2021, and it is expected to reach $682.3 billion by 2027–that’s a lot of software!
This article will look at the major trends in the offshore software market so you can stay on the cutting edge and beat your competitors to the punch.
Here is the list of the current offshoring and nearshoring trends we will examine:
- Offshore Partners Must Provide Value-Added Services
- Metaverse and Web3 Adoption
- AI and ML Skills Will Continue to Be in High Demand
- New Hotspots for Offshore Software Development
- Collaboration is King
- Cyber-Security Is Priority #1
- Agile and Continuous Delivery is the Norm
- Outsource Bureaucracy to Someone Else
- Quality Still Wins
- How Can TurnKey Help You Keep Up With Trends?
Ready to dive right in? Let’s go!
Offshore Partners Must Provide Value-Added Services
Once upon a time, an offshore software development firm was merely responsible for providing clients with quality developers. But client needs have evolved beyond just developers alone.
Top level offshore agencies (like TurnKey!) now must provide valuable services that help the client grow and scale their team in the most effective way possible.
This includes custom recruiting to make sure the team is being built with developers who not only have the right skills but also the right temperament to fit perfectly into the client’s culture; a talent management division that is in continual dialogue with the team and helps prevent churn; and a consultative arm that can provide clients with market intelligence about compensation and broader trends in software development.
Metaverse and Web3 Adoption
The emergence of Metaverse and Web3 has meant even higher demand for software developers who can code in these brave new worlds.
The metaverse reached an all-time high of 400 million monthly active users in 2022, according to Metaversed. By 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social and/or entertainment, according to Gartner.
The metaverse exists entirely online, where users can meet, interact and perform tasks virtually. It promises to bring new levels of social connection, mobility, and collaboration to a world of virtual work.
And importantly, both the Metaverse and Web3 may change how developers work within a product team.
Here’s what we mean: by introducing elements of adventure, spontaneity, and surprise, startups can create an immersive and engaging work experience that helps offshore employees stay focused and motivated. In addition, the metaverse provides a unique platform for business networking and collaboration.
With its infinite potential, the metaverse is poised to revolutionize the way we work. There will be challenges to overcome—such as ensuring data security and privacy—but the potential benefits are too great to ignore.
AI and ML Skills Will Continue to Be in High Demand
As automation technologies become more prevalent, the demand for engineers with artificial intelligence and machine learning skills is rising rapidly. However, these skills are in very short supply.
According to a recent report, there are more than four times as many job openings in AI as there are qualified candidates. This shortage is expected to continue to grow in the coming years.
AI and machine learning solutions are popular due to many businesses wanting to automate as much of their business operations as they can.
Moreover, many startups are turning to AI and machine learning to help them with their hiring needs. AI tools can help identify potential candidates and assess their skill sets. In addition, they can also help to identify gaps in a company’s current workforce and make recommendations for how to fill those gaps. As the demand for AI and machine learning skills continues to grow, so will the need for recruiting automation tools.
New Hotspots for Offshore Software Development
With the rise of the internet and globalization, startups have been able to tap into whole new worlds of development talent and opportunity. Offshore destinations that have been popular for a long time – such as Eastern Europe and India – have been joined by relative newcomers on software’s global stage, such as Brazil, Argentina, Mexico and Colombia.
Some new locations –particularly the true up-and-comers like Africa – may not have the same reputation as more popular offshoring hubs, but they offer a number of advantages that make them appealing. For example, they often have lower labor costs and can provide access to a large pool of often untapped skilled workers.
So if you’re considering offshoring for your business, don’t discount these newer destinations—they may just be the perfect fit for your needs.
Collaboration is King
Without clear and reliable channels of communication, it can be difficult to manage an offshore development team effectively. This is where collaborative tools come in.
By using tools like Miro, GSuite, Trello, GitHub, Zoom, and Notion, startups can manage their offshore outsourcing teams more efficiently and stay organized even when working across time zones. These tools can help to improve communication between team members and reduce the likelihood of misunderstandings, mistakes, wasted effort, and lack of morale.
Cyber-Security Is Priority #1
Though building great software has always been the core objective for product leaders, data security has now become equally top of mind. To this end, some startups may worry that the offshoring market could make them vulnerable to data thieves or compromise their trade secrets or core intellectual property.
The good news is that as long as you do an ounce of diligence, you can find skilled and reliable offshoring partners (like TurnKey!) that provide legal and technical support to ensure full data security. This dramatically reduces the security risks associated with offshore software development.
Agile and Continuous Delivery is the Norm
One of the main advantages of offshore development is that it allows startups to make the most of working in different time zones.
For example, suppose your main office in the United States outsources its software development to a provider in Eastern Europe. In that case, the team there will work on the code while the local team is asleep, with only 3-4 hours of overlap for online meetings and communication. This can actually help speed up the development process and make it more cost-effective since teams are working on the product continuously.
On the other hand, Latin America doesn’t have a time difference compared to the U.S., so if synchronous work is what keeps your workstream flowing, no problem—you’ve got the agility to choose the model that best fits your software development goals and objectives.
Additionally, offshore development can help improve the product because it brings together a more varied perspective. Such diversity of thought improves your team’s overall efficiency and creativity, and can help drive down costs by coming to solutions more quickly.
Outsource Bureaucracy to Someone Else
Establishing a legal presence in many countries can often be a daunting task, as each country has its own unique set of regulations and tax laws.
One way to overcome these challenges is to use a strategic offshore partner. By collaborating with an established offshoring provider like TurnKey, your startup can get easy access to the necessary resources and expertise to successfully expand your development team into new regions. Offshoring providers can also help startups navigate the complex regulatory landscape and navigate the labyrinthine tax code.
Trying to do it yourself is too much brain damage–you are better off spending the mental energy plotting your roadmap or selling your product.
Quality Still Wins
While diving into the offshoring market can be a great way to optimize costs on tech talent, it also comes with certain risks. One of the biggest is that product quality could drop if you aren’t using an offshore partner you can trust.
As a result, it is important for companies to carefully consider how they are going to ensure quality before offshoring any work. This includes setting up a clear development process, establishing product delivery milestones, and creating and tracking development metrics.
For many startups, the best solution is to partner with an experienced vendor (such as TurnKey) who can custom recruit the highest quality developers for the job.
How Can TurnKey Help You Keep Up With Offshore Software Development Trends?
We understand the current offshoring and nearshoring trends –as well as the challenges that come with offshore software development – which is why we created a different, better and more effective model called YOURshoring.
YOURshoring allows you to hire a fully dedicated development team that is tailored to your specific needs and committed to your success. This is YOUR team working on YOUR roadmap within YOUR culture and YOUR rules.
TurnKey’s YOURshoring model is the best way to achieve your desired outcomes and avoid the mistakes that are frequently made with offshoring. Take it from us: we used to run software startups and stepped on all these landmines ourselves.
We built YOURshoring to encapsulate the best that offshoring has to offer with none of the negative traits that pop up when you don’t know what to look out for.
Offshoring is the practice of hiring highly skilled developers in countries with lower labor and production costs. For US-based startups and high growth companies, offshoring your software development can provide a significant competitive advantage, accelerate your speed to market and save money that can be redeployed elsewhere.
By hiring individual software developers –or a development team – in a country with lower labor costs, startups and high growth companies can save significant money on labor expenses. Additionally, offshoring can help them gain access to a much wider pool of development talent than can be found locally. In many cases, these developers are able to equal or exceed the productivity level of developers in America and Western Europe.
One of the current offshoring and nearshoring trends is the increasing use of automation. Startups are using technology to carry out tasks that would traditionally be done by human workers, which helps reduce labor costs and improve efficiency. But in order to create automation software, companies need to find developers that are highly skilled in artificial intelligence and machine learning; this means companies must look to offshore locations where there are many developers with this type of expertise, such as Ukraine and Romania.
The most popular trend has been American companies’ use of nearshore destinations, such as Mexico or Colombia, for their offshore software development. These locations offer many of the same benefits as traditional offshore destinations like India, but they are closer to the markets where (U.S.-based) startups are located. As a result, they can be more convenient to collaborate yet still incredibly cost-effective.