1. Article introduction

Software outsourcing development is becoming popular as technology develops at a rapid speed. Organizations of all sizes and shapes are looking for partners to help them keep pace with the pace of innovation.

According to a Statista report-one of the world’s largest statistics , the IT market size amounted to slightly more than $120 billion in 2019 and the IT outsourcing industry valued at $92.5 billion.

It is estimated to rise to $413 billion by the end of 2021. Out of this, 70% is expected to come from outsourcing. Software development outsourcing is one of the significant business strategies that make a multi-billion dollar part of the IT marketplace.

Source: Statista Research Department

Information technology outsourcing (ITO) is the outsourcing of IT services which is a practice where a company hires individuals outside their organization to perform its information technology (IT) operations and produce goods. This covers various IT services, from infrastructure, maintenance, and support to software development and programming. ITO contract value worldwide was estimated to be 66.5 billion dollars in 2019.

Business process outsourcing (BPO) Business process outsourcing (BPO) is a type of outsourcing wherein a third-party service provider is employed to carry out one or more business functions in a company. The third party is responsible for carrying out all operations related to the business function. BPO total contract value worldwide was 26bn dollars in 2019.

An other report of Statista in 2019, IT-consulting and implementation services market revenue in the World in 2021 reached to 53.67bn dollars in IT market.

Source: Statista 2019

1.1 What is Software Outsourcing?

First of all, “outsourcing” is basically what the word itself implies: out-sourcing. Basically, it means receiving “sources” from “out” – outside.

Software outsourcing services are the practice that hires the skills and expertise from a third party to handle complex tasks relating to software development from the entirety of the IT function to discrete, easily defined components, such as disaster recovery, network services, software development or QA testing.

The demand for outsourcing software is increasing due to the competitive market and digital transformation needs.

There are several ways to outsource a business process, and depending on the process. There are a few different types based on the distance between the two members of the relationship including:

• Onshoring is the process of sourcing or relocating a business' production operations within domestic national borders which is within their own country.
• Nearshoring is the process of sourcing or relocating a business' production operations to a foreign country geographically nearby which is a neighboring country or one in the same time zone.
• Offshoring is the process of sourcing or relocating a business' production operations to third-party providers overseas which is a more distant country.

Read more: Nearshore vs Offshore vs Onshore: What is The Difference?

1.2 Why we need Outsource?

Choosing a software outsourcing company must be a smart choice. Companies are now using outsourcing strategically for access to specialized skills such as energy, healthcare, pharmaceuticals, travel, transport, telecom, and media. Organizations can focus on solving capacity issues, business management, budgeting, planning and production and the creation of goods and services.

Outsourcing can be apple in many other functions include:

• Content writing.
• SEO, marketing.
• Web designer and programmers.
• Personal assistants.
• Tax preparers.
• Web development.
• Designing mobile applications.
• Drafters.
• Human resources.
• Security guards.
• Call Centers.
• Medical and Computer Professionals.

1.2.1 Save time and money

Using outsourcing services help businesses to reduce and control operating costs. It is expensive to hire and train new staff for short projects, and temporary employees rarely produce high-quality work.

Working with an outsourcing provider, you get instant access to a team of highly qualified customer service who use the latest technology and techniques. It means saving time and having your business run 24/7

1.2.2 Focus on Your Core Business Process

Companies will focus more on core competencies. It’s more efficient to spend your time doing whatever you’re good at.

Take time to develop the company consist of:

• Modernize the operating system.
• Build a high-quality applications.
• Develop improvements and upgrading platforms.
• Update new technology implementations.

1.2.3 Access new talent pool

Outsourcing allows you to expand new external resources instead of relying on the internal talents.

Hiring a new team member often requires expensive recruiting and training. You have to teach them your processes and workflows (or develop special processes just for them).

You may have to invest in their education, so they have the right skills for your business while outsourcing your business provides high skillful expertise and the entire service process.

1.2.4 Risk management

In case of staff resignation, all cost that company has invested on recruiting and training has gone which is called employee turnover. Turnover at the wrong time can interrupt your operations, causing costly problems.

Notably, if some core positions like managers, directors are vacancy suddenly, company should be hurry to fill the position not to affect to the whole business operation.

Besides, the company can also share risk with another third-party. The outsourcing company will share some of the responsibility for completing the tasks that are assigned to them.

1.2.5 Control Cash Flow

When you outsource, you convert a fixed cost (a full-time salary) into a variable cost (a pay-what-you-need service). This frees up your cash flow for investment in other parts of your business.

You could funnel that cash into improving your products or running marketing programs such as launching a new product or reaching into a new business.

2. The potential markets for Software Outsourcing companies

2.1 The North America

2.1.1 The Report

North America countries like The United States, Mexico, Canada,... is one of the most potential markets for software outsourcing companies in the world because of its strong economic growth and big market size for many years.

As Statista reported, total spending on outsourcing in North America amounted to 21.6 billion U.S. dollars. Therein, outsourcing spending almost 20 billion U.S. dollars in the United States in 2019.

The global software development services market is expected to reach $843b by 2021 where approximately 70% of demand for Software Development services and outsourcing come from the U.S. and Western Europe.

Source: Statista Research Department

Besides, A.T. Kearney has ranked Mexico in fourth place out of 20 in its Rising Stars of IT Outsourcing Index. The consultancy says most US IT firms have already established delivery centres in Mexico, with HP and IBM the leaders. The U.S., Mexico, and Canada wanted to build long term international partnerships, outsource business processes to help companies operate efficiently.

2.1.2 Characteristics

• North America has become a continent with a consumerist economy where manufacturers, retailers, and service providers compete fiercely for customers.
• Labor force in North America has a high level of quality but high wages so almost all North America companies outsource software development to lower-wage regions such as Eastern Europe, South America, and Southeast Asia to reduce costs.
• Some countries in North America face difficulties in applying for Visa. For instance, The United States’ ITO industry is threatened by changes in US immigration policies so IT services providers are increasingly locating in Canada or Mexico to reduce their dependence on American visas. Some companies have plans to use its center in Mexico or Canada for work with US clients.

2.2 The Eastern Europe

Eastern Europe is also one of the dynamic markets for software outsourcing companies, especially the North America countries.

There are numerous countries in Eastern Europe that belong to the top 30 global outsourcing destinations and are recognized as one of the top IT outsourcing markets such as Ukraine, Poland, Belarus, Hungary, Romania, Czech Republic, Bulgaria.

Besides, in Eastern Europe, the supply of outsourcing companies meets and in some countries such as Ukraine and Belarus even exceeds the demand.

2.2.1 The Report

Eastern Europe is now rapidly becoming the most attractive location for offshore software development and BPO service.

In a highly competitive and dynamic business environment, most entrepreneurs consider outsourcing to Eastern Europe to create a fresh push by accessing skilled labor, reducing costs, high-quality product and pursuing new growth opportunities.

As Clutch, there are between 4,000 and 6,000 vendors that specialize in software outsourcing in Eastern Europe. Clutch lists 4,650+ vendors that provide IT outsourcing services.

Source: Clutch ans N-iX

Croatia in Eatern Europe is one of the favorite locations for software development companies. The state’s government is dedicated to supporting IT development. Their BPO market for tech services is valued at $56 million.

A.T. Kearney and Tholons consulting companies highly rate the Eastern European countries as preferable outsourcing destinations.

2.2.2 Characteristics

• Eastern European developers are considered the most experienced and qualified IT experts in the world, and at the same time, their services are pretty affordable.
• Wide talent pool of skilled graduates from almost 50 cities in Eastern Europe have large universities. The highly educated developers and fair labor costs are beneficial for BPO support.
• Time zone is similar with countries nearby which is convenient in working along with high-quality services.
• Strategic location in Europe area. Eastern European countries are becoming a leading factor for outsourcing leads and bringing good communication.
• Using multilingual languages. East Europeans have great language skills. For instance, 85% of Bulgarian students study English and another European language. It is compatible language capabilities in nations like Hungary and Poland.

2.3 The South America

South America is the fourth largest of the world’s continents. It is the southern portion of the landmass generally referred to as the New World, the Western Hemisphere, or simply the Americas.

In recent years, IT outsourcing in South America has become more popular. A lot of US-based businesses turn to South America countries like Brazil, Argentina,..for outsourcing software development for higher quality and time-zone congruence.

2.3.1 The Report

In recent years, IT outsourcing in South America has become more well-known. It offers strategic opportunities as a nearshoring destination. As Statitas reported, Brazil outsourcing spending around 731 millions dollars in 2019 and to continue expanding.

Brazil is considered the "king" of outsourcing in South America. According to Gartner Research, "Brazil's economic footprint, combined with the largest domestic IT consumption in Latin America, makes it a natural destination for IT services." Furthermore, there is a minimal time difference with the United States making it a prime location for companies to outsource their services.

Source: Statista Research Department

2.3.2 Characteristics

• The labour cost is competitive compared with other areas like Eatern Europe and North America. The average hiring rate is approximately $30 - $50 per hour.
• Time-zone congruence. It means the minimum time difference between North America and South America helps to easy work with Agile development and travel conveniently.
• Spanish language skills. South America is probably the only region in the world that offers the combination of Spanish and Portuguese language skills. This works in the US markets due to the huge Spanish population present in the US.
• Domestic opportunities: Global companies gain several regional and business opportunities, especially in large countries like Brazil and Argentina where the domestic market is also fairly large (nearly 60-70%).

2.4 Asia

2.4.1 The Report

From Europe to the Americas and Asia, more and more countries all over the world are becoming hotspots in providing various BPO services.

Asia can not be missed in the list of potential markets for software outsourcing companies. Software companies in the United States, the United Kingdom, and Western Europe preferred outsourcing development services to India or the Philippines some time ago.

Asia countries undertake most outsourcing business which occupies 45% of the international outsourcing business. Australia, Japan, China, India, Vietnam and some other countries are the main competitors of the international outsourcing markets.

According to Statista, Australian outsourcing market spending reached 2,810 million U.S dollars in 2019 while Japan was 2,700 million U.S. dollars.

Countries with the largest outsourcing market spending in Asia Pacific in 2019 Source: Statista Research Department

Many Asian countries are continuously providing outsourcing support in many fields including on-shoring, nearshoring or offshoring. China, Vietnam, Thailand, Bangladesh,... are among the top outsourcing countries in the world providing a wide range of assistance to businesses all over the world.

Moreover, AT Kearney states that Asian countries are continually leading IT services firms to expand their traditional offers to include research and development, product development and other niche services, drawing on their extensive experience and highly skilled workforces.

2.4.2 Characteristics

• Low labour cost and profuse workforce. Asian countries' labour cost is much lower than that of European countries, making it the prime benefit of offshore outsourcing. In many cases, outsourcing IT services in Asia would save you up to 30%-60% of the expenditures.
• Stability in Socio-economy, Ethnic, Religion and Politics.
• Policies encourage for foreign investment.
• In terms of work quality and managerial control, Asian businesses can deliver these according to your set standards. This is the exact reason Asia became the best outsourcing destination in the first place.

3. Where are providing Software Outsourcing Service?

3.1 The European Eastern

In most East European countries, the IT industry is one of the top sectors in their economies. Because of this, Eastern European developers are some of the most experienced and qualified IT experts, and at the same time, their services are pretty affordable.

3.1.1 The Characteristics

Although outsourcing companies in Eastern Europe can’t offer rates that are as low as those from the Asian region, they are still reasonable because of high quality services.

3.1.1.1 Ukraine

According to research, 90% of Ukraine's IT services are outsourced to other countries. Ukraine is becoming a leading IT outsourcing destination in Europe due to its booming tech ecosystem, which is predicted to reach US$8.4 billion of industry export volume in 2025, a large talent pool of 200,000 IT professionals, and strong tech education. Ukraine ranks second after India in terms of growth of this segment of IT in the world.

Ukrainian software developers are recognized among the 5th strongest IT professionals globally thanks to their solid technical expertise, high English proficiency level (70% speak English at an upper-intermediate level), and knowledge of emerging disciplines (Go, AI, big data, blockchain, etc.)

No wonder the likes of Microsoft, Samsung Electronics, and Apple prefer outsourcing to Ukraine to build cutting-edge software solutions.

3.1.1.2 Poland

Poland is another very popular spot for Western entrepreneurs to outsource IT activities. Developers have not only solid technical skills, but also the western mindset and great command of the English language, which makes US and European business owners consider hiring Polish devs in the first place.

Being a member of the EU, Poland is one of Eastern European fastest growing economies, which makes it an attractive software development destination for various organizations overseas. The country has an impressive tech talent pool of 295,300 IT professionals. However, only 32% of the tech experts work for IT outsourcing companies.

3.1.1.3 Romania

Romania is the second-largest country in Central and Eastern Europe. It has almost 120.000 professional developers and the most common languages spoken are English, French, German and Spanish.

According to The State of European Tech 2020 report, 3.311 in 1.000 inhabitants is a software engineer here. These figures place Romania in the top 10 countries with the highest number of professional developers in Europe which is higher than in Austria, Czech Republic, Denmark, Bulgaria, Hungary, or Croatia.

Also, the export of software and IT services makes 1.9% of Romanian GDP. Therefore, it has one of the most dynamic IT industries in Europe. This makes it an ideal nearshore and offshore software outsourcing location.

3.1.2 The Advantages

3.1.2.1 Good Education and skill professionals

Eastern European countries are well known for their high-quality educational systems, especially regarding IT training.

Eastern Europeans are passionate about IT, motivated, talented and knowledgeable special focus is given to math, science, technology and engineering disciplines. Young people always stay up to date with the current trends in the world of technology and innovation.

3.1.2.2 Cost reduced

Advanced skills at favorable prices. Software engineers in Eastern Europe may charge more than developers in Asia. But their rates are almost two times lower than those in the US. Low rates do not impact the quality of work.

Customers can substantially cut their budgets without compromising quality.

3.1.2.3 English Proficiency

The majority of Eastern European engineers are highly proficient in English and other European languages This crucial benefit helps mitigate many issues.

3.1.2.4 Data Security

In Eastern Europe, software outsourcing companies are protected by strict data protection legislation, such as General Data Protection Regulation (GDPR) and others. This ensures enhanced confidentiality and protection of clients’ confidential information.

There’s a law about Intellectual Protection in Ukraine that protects the copyright for databases and computer programs. It means that no pieces of the code can ever be transferred to third parties, so outsourcing in Eastern Europe is quite secure.

3.1.2.5 Cultural similarity

Neighboring countries share similar cultural traditions, business values and personal qualities that allow vendors and their clients to work in an atmosphere of mutual understanding. It helps to avoid misunderstandings during working together.

3.1.2.6 Time Zones

A three-hour difference between European countries helps to save time and allows companies to arrange real-time meetings, which leads to more effective collaboration with nearshoring companies. Traveling to your partners for personal meetings is also not difficult or time consuming.

3.1.3 The Disadvantages

3.1.3.1 Tax confusing

The taxation system in some countries of Eastern Europe may confuse offshore clients. Therefore, businesses should check the outsourcing company’s entity to which you issue the payments. Besides, Ukraine has one of the lowest tax rates in Europe.

3.1.3.2 High competitive

Because of the highly competitive offshore software development market in Eastern Europe, the local software agencies get trouble in retaining the developers in the project for the team.

3.2 The Asia

3.2.1 The Characteristics

3.2.1.1 India

India has a 25 years history focusing on BPO and over 3.7m specialist BPO employees. A report cited by researchers says that among 80% of Europeans and US outsourcing firms ranked India as their number one outsourcing destination.

India is still the top IT/Outsourcing destination especially in Bangalore being the leading IT exporter in India and Asia with many well-educated technology workers. There is no limitation caused by language barrier since the country has over 100 million English speaking people, the second largest after the USA. Every year, there are more than 150,000 engineering graduates that join the IT industry, and this ensures unlimited availability of services.

Labour costs in India are lower than in developed countries. For example, the pay rate for software developers is between $14 and $40 per hour compared to the $83-per-hour rate in the United States.

3.2.1.2 Vietnam

In 2019, Vietnam's software outsourcing industry ranked 9th in the top outsourcing countries in the globe. Vietnam is another really affordable destination for the IT sector.

An IT specialist can be hired for anything between $15 - $40 per hour depending on the expertise of the professional.

With labor costing 90% less than the US, the labour force in Vietnam is eager, hard-working and quick to adapt to technological change and high proficiency in English. Notably, 60% of its population of 90 million is aged under 30 who are well-educated and developing in the artificial intelligence field.

3.2.1.3 Philippines

Outsourcing to Philippines has seen a 30% growth as compared to the previous year and the future looks extremely promising as Deloitte predicted that Philippines may increase its share of the BPO pie to 20% of the entire global market generating more than $50 billion in revenue.

There are more than 200 offshore software companies and around 95,000 technical specialists in the country. Moreover, there are more than 130,000 IT graduating students each year.

The country is the third-largest English-speaking nation with a 94% English literacy rate which is ideal when outsourcing. The cost of hiring a software developer from the Philippines costs a fifth of what developers in the western world charge yet the quality of work is fairly equivalent.

A decent developer from the Philippines can cost you anywhere from $10 to $50 per hour.

3.2.2 Advantages

3.2.2.1 Lower cost

The truth is, labour cost in Asian countries is much lower than that of European countries, making it the prime benefit of offshore outsourcing. In many cases, outsourcing IT services would save you up to 30%-60% of the expenditures.

According to outsourcing advisory firm Accelerance, Asian countries provide the cheapest IT outsourcing services, with average hourly rates ranging from $20 to $50 (as a comparison, the figure is $22–$67 in Eastern Europe).

3.2.2.2 Skilled employees

Instead of having to spend time training new employees, you can find talented and skilled ones from overseas, and again, at lower costs. Take Vietnam as an example to understand why Asia is ideal for software outsourcing: a survey by the Tholons – Global Services Group listed Vietnam as one of the ten most ideal countries for software outsourcing service.

And in spite of the economic crisis, Vietnam software companies are still growing enough to satisfy demanding customers. With low labour cost and high standards in the IT sector, Vietnamese software engineers are capable of joining high-quality projects with complicated techniques and knowledge.

3.2.2.3 Time-zone difference

Another benefit that offshore outsourcing offers is time-zone difference. Due to hours of variation between Asia and Europe, you can get your work done even when you’re sleeping.

3.2.3 The Disadvantages

3.2.3.1 Legal issues

Legal issues and contracts are often complicated, especially when it comes to offshore outsourcing. Make sure you protect your intellectual property by signing an NDA. Prepare your own contracts with consultancy from professional lawyers to assure customers rights as well as the service provider’s duties.

3.2.3.2 Communication

Due to differences in languages and cultures, misunderstanding is highly possible. You may lose control of your projects if your employees are vague about their roles and customers demands. That means transparent communication is a must in any offshore outsourcing project.

3.2.3.3 Data security

Outsourcing to India or China, on the contrary, may bring many problems with data security, since laws in those countries differ tremendously. There’s always the risk of confidential data leakage, which is why you need to take appropriate administrative and legal measures and discuss these with your outsourcing partner.

3.3 The South of America

3.3.1 The Characteristics

Owing to time-zone compatibility, cultural similarities, and a tech-savvy workforce, South America offers high-quality development services to the companies outsourcing in the region.

South America has created an ever-growing pool of IT talent which can then be deployed by companies to achieve low-cost development services. Today, many top US based companies and many more are looking at South America as a potential offshore center for their future development projects.

3.3.2 The Advantages

3.3.2.1 Tech giants destinations

Investment on the rise in countries like Argentina, Colombia, Brazil and others makes fast growing outsourcing market.

Many tech giants, including Google, Facebook, Amazon, and Instagram, have established offices in South America countries which is evidence that technology is expanding the region, it’s no wonder that many businesses are outsourcing to South America.

3.3.2.2 Strong talent pool

South America countries are producing a well-educated workforce and thousands of high quality programmers from countries such as Peru, Argentina, Brazil, Chile, Colombia and many more.

Argentina, for instance, offers free public university education. This and other factors have led to a rise in talent in the region and allows companies to expand their search to approach abundant technical talent as the number of qualified and experienced developers.

3.3.2.3 High Efficiency

South American countries are not only known for offering some of the world’s best skills when it comes to technology, but they also tend to be efficient with cost effectiveness. The hiring rates for quality developers and other similar professionals are much lower than the USA.

Because they’re focusing on the product quality, rather than dealing with other aspects of your business, they can often complete your project quickly and enable you to release it sooner than you might if you rely on an in-house team.

3.3.2.4 Culture and language

The South America developers seem to be more creative and assertive, viewing the business relationships more as the partnerships instead of hierarchical worker/client relationships. On the other hand, the Asian countries work in an opposite manner.

Additionally, most countries in the region share similar cultures and work styles with the U.S. That means you can be confident that you can collaborate effectively, achieve better results, develop sustainable relationships and won’t encounter cultural barriers.

Besides, being primarily comprised of English speaking nations, South America countries surpass India and China is also one of the most prominent reasons for outsourcing to South America.

3.3.2.5 Similar Time Zones

One of the biggest disadvantages that businesses in the USA face while outsourcing to Asia countries is the large time zone difference. On the other hand, the time zone difference between USA and South America countries is negligible.

It means reducing time difference allows much lesser response times between the teams and highly synchronous communication, solving the problem quickly.

3.3.2.6 Free Trade Is Encouraged

In South America, free trade agreements which have been signed in the last decade, helps to reduce or eliminate barriers to trade across international borders and aims at liberalizing the movement of goods, services, people and capital among participating countries.

It means the countries that are included in this list are Brazil, Argentina, Chile,...with favorable business policies and political stability, can be chosen as your next offshoring option to gain further business benefits thanks to suitable business environments.

3.3.3 The Disadvantages

3.3.3.1 Price

The labour cost in South America can be cheaper than nearshore places to the US but still more expensive than outsourcing to offshore destinations like Asia.

It’s important to keep in mind that you may sacrifice other nearshore advantages if you choose offshore providers, such as streamlined communication.

3.3.3.2 Impact on business

Some businesses might be under criticism for employing employees overseas instead of in their country. The rate of job loss in the country may increase sometimes.

Besides, using an outsource workforce will affect the in-house team. Employees may worry about being replaced. It can also be a challenge for your full-time team to work closely with a remote team.

3.3.3.3 Access limited

Outsourcing to South America also means you’ll have less access to your providers than you would with onshore services.

When facing some problems that need to be solved while it’s not impossible to meet with them face to face this also means potentially fewer on-site visits. It might affect work quality and effectiveness.

3.3.3.4 Law difference

When outsourcing software development overseas like to South America, you’ll be working with professionals who aren’t as familiar with the legal requirements of your own country, such as intellectual property. This means you’ll need to keep a closer eye on the products they build and consult legal experts to make sure you’re following the laws to the letter.

4. The most Programming Languages in Outsourcing

Programming Language is the most important requirement for Web Development, Machine Learning, Data Science, or any other. It is a formal language comprising a set of strings that produce various kinds of machine code output and used in computer programming to implement algorithms. Most programming languages consist of instructions for computers.

When developing software, development teams must move swiftly for their company to remain relevant in the market. Regardless of the diverse applications available, every product shares the popularity of using specific coding languages.

In today’s digital world, Javascript, Java, and Python are three of the top programming languages for developing software, and each language offers its unique advantages.

4.1 Java

Java is one of the most common, in-demand computer programming languages used today with a 24-year-old language. It is a high-level, class-based, object-oriented programming language that is designed to have as few implementation dependencies as possible.

Application developers just write once, run anywhere meaning that compiled Java code can run on all platforms that support Java without the need for recompilation.

In the technology blooming area, among programming languages universal, Java is also a highly adaptable option that is applicable to almost anything, including both game and app development.

4.2 JavaScript

JavaScript is a scripting or programming language that allows you to implement complex features on web pages. It is a follow-up to Java that also makes it on the list of the most popular programming languages. This is a perfect language for web applications.

JavaScript (JS) is one of the most popular programming languages for web development. Alongside HTML and CSS, JavaScript is one of the core technologies of the World Wide Web. Over 97% of websites use it client-side for web page behavior, often incorporating third-party libraries. All major web browsers have a dedicated JavaScript engine to execute the code on the user's device.

4.3 Python

Python is a high-level, general-purpose and a very popular programming language. Python programming language is being used in web development, Machine Learning applications in Software Industry.

Python Programming Language is very well suited for Beginners, also for experienced programmers with other programming languages like C++ and Java.

This open-source language is used to bridge the gaps between the components of larger software products. It is also a popular language because of the versatility it offers. That is why Python is one of the top used programming languages.

5. Vietnam - promising destination for outsourcing

5.1 Reports of Vietnam software outsourcing market

Many years ago, Vietnam was considered as an attractive destination in the field of software outsourcing development in Asia

5.1.1 Tholons Services Globalization report

Tholons - a leading full-service Strategic Advisory firm for Global Outsourcing and Investments has reported in the latest research report of Tholons Services Globalization IndexTM (TSGI) 2020, Vietnam IT Outsourcing ranked ninth position in the top 50 digital nations.

Source: Tholons 2020

Compared to 2019, the position seems to move up and become a new member of the top 10 digital nations. By ranking in the ninth position, Vietnam proved that it is a wise choice for outsourcing software, especially in the pandemic COVID-19 in 2021.

Many foreign companies such as Intel, Samsung, LG, and Microsoft continue to invest in Vietnam, especially the participation of Apple in the future probably will continue to strengthen.

Vietnam has a young labor force with the ability of logic and mathematics of students are very well be a favorable condition for development. Hiring a top software outsourcing company in Vietnam can save 90% of the cost of operation compared to outsourcing in the US. Compared to China the saving would be 50%, and 30%, if compared to India IT workers.

5.1.2 A.T. Kearney report

According to A.T. Kearney lists, Vietnam moved up to top 05 the Global Services Location Index in A.T. Kearney Outsourcing Location Report 2019.

The report focuses on lower-cost countries that are taking the large market shares of the current global outsourcing market.

Source: A.T. Kearney 2019

Vietnam has recently become a tech hub for anyone concerned with technology, such as the Internet of Things(IoT), Big Data, Artificial Intelligence(AI), Machine Learning (ML), Blockchain, Cloud Computer, etc.

5.1.3 More investments

As Ministry of Planning and Investment reported, in the past 9 months of 2019, Vietnam has attracted a total of US$ 26.16 million of FDI which brought Vietnam to the 8th position among the 20 best countries to invest in according to US News & World Report on new transformations in Vietnam. This made Vietnam become one of the most attractive countries for investment.

In 2021, Vietnam and other countries in the novel coronavirus pandemic will focus on developing software for on-demand delivery, food and beverage orders, healthcare, and even travel and tourism.

Read more: A Report for Software Outsourcing Market-Vietnam market

5.2 Two famous cities for Vietnam Software Development Outsourcing Services

Vietnam technology has a big pool of talented developers and it is a great place to develop and boost your business for the best business outcomes. The following two famous cities will provide the top software outsourcing companies as they play a big role in Vietnam's economy generally and Vietnam software outsourcing particularly. They are Ha Noi and Ho Chi Minh City.

5.2.1 Ha Noi

Ha Noi city is the capital of Vietnam and it is in the north of Vietnam. The famous university in Hanoi is the Hanoi University of Science and Technology. The average graduated software developers each year is around 10,000 students.

5.2.2 Ho Chi Minh

Ho Chi Minh city is in the south of Vietnam and plays a significant role in the economy of Vietnam. This is the most attractive place not only for investors where they can find the top software outsourcing companies in Vietnam but also for software developers where they can live and build their career paths.

The Ho Chi Minh City University of Science - one of the most famous universities in Vietnam listed in the top three universities that have the best coders in the world.

According to Tholons Services Globalization Index, Ho Chi Minh City was ranked #18th in the Top 100 Outsourcing Destinations in 2016.

Source: Tholons 2016

Conclusion

Vietnam outsourcing software development is well-known as a cost-effective destination for software outsourcing services. Even though there are still a lot of challenges, Vietnam is striving day by day to become a leading country in the field of technology, notably in software outsourcing services.

Investing in the Vietnam software market is a wise financial decision.