Several parameters have to be met before setting up an industry. The same is true with a software development company. These industries not only need a highly talented pool of skilled technicians, but also the favorable climate to run the business smoothly. By favorable climate, we mean government policies and investment required to set up a world-class software development company. However, the path is not as easy as it seems to be.
Most of the on-site software development company has their branches in USA or in European states. Though these countries are equipped with latest technologies and highly skilled professionals, the cost of operation is quite high. A survey reported that a company has to pay approx. $ 70,000 per annum to harness the skills of tech savvy, which is quite expensive when compared to India, where the same class of talented tech savvy are available at just $13,000 per annum. This is the reason that major software giant companies favors for offshore software development.
Offshore software development is the practice of moving software development process from developed nations to developing nations. According to a recent research conducted by Gartner group, India occupies the top slot as the market leader in offshore software development, primarily because of favorable government policies and a pool of talented IT professionals. After India, its Philippines, which retains the major market share in offshore software development. Together they have a joint market share of 50 percent. Many new players are emerging in this race. The most prominent of these are China, Brazil, and Ireland.
BENEFITS OF OFFSHORE SOFTWARE DEVELOPMENT:
Most of the fortune 500 companies use offshore development services. Major IT giants like IBM, Microsoft, Apple, Samsung, and Siemens prefer offshore operations. It would not be incorrect to say that offshore software development is the need of today’s IT sectors. Its future is promising as many new ventures are planning to set their offshore development projects in near future.
Most of the on-site software development company has their branches in USA or in European states. Though these countries are equipped with latest technologies and highly skilled professionals, the cost of operation is quite high. A survey reported that a company has to pay approx. $ 70,000 per annum to harness the skills of tech savvy, which is quite expensive when compared to India, where the same class of talented tech savvy are available at just $13,000 per annum. This is the reason that major software giant companies favors for offshore software development.
Offshore software development is the practice of moving software development process from developed nations to developing nations. According to a recent research conducted by Gartner group, India occupies the top slot as the market leader in offshore software development, primarily because of favorable government policies and a pool of talented IT professionals. After India, its Philippines, which retains the major market share in offshore software development. Together they have a joint market share of 50 percent. Many new players are emerging in this race. The most prominent of these are China, Brazil, and Ireland.
BENEFITS OF OFFSHORE SOFTWARE DEVELOPMENT:
- Cost Savings: Companies prefer offshore software development because of lower labor costs. They get skilled employees at a very cheap rate, which helps in getting quality service at an affordable rate.
- Tax Savings: Nations like India, China, and the Philippines offer tax saving incentives which attract many software companies to set their offshore base in these countries.
- Quality of Service: Quality of service supplied by IT professionals from offshore locations is at par with on-site locations.
- Price Stability: Outsourcing helps in budget stability. Companies don’t have to bear the financial wrath, even in an economic downturn at times of recession.
- 24*7 Work Continuity: Most of the on-site companies collaborate with offshore software developers to perform software development 24 hours a day. Offshore Clients start working on a project where on-site team developers left it before finishing their day. This provides a continuous software development cycle 24 hours a day.
Though offshore software development has played an important role in placing IT industries over the top of other market segments, it also suffers from some drawback. Most common is language problem. Differences in languages lead to miscommunication. Countries like China, where English is not popular among the common masses, is not preferred as an offshore destination by many IT companies.
Most of the fortune 500 companies use offshore development services. Major IT giants like IBM, Microsoft, Apple, Samsung, and Siemens prefer offshore operations. It would not be incorrect to say that offshore software development is the need of today’s IT sectors. Its future is promising as many new ventures are planning to set their offshore development projects in near future.
