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Software Development Outsourcing Trends

Software development outsourcing is growing steadily year by year. According to Statista, it’s actually expected that the entire outsourcing industry will reach 413.7 billion dollars of worth in 2021, which isn’t surprising given the fact that technology advances so quickly.

By Wojciech Baranowski

Published: 28 April, 2021

Last update: 14 December, 2022

What’s more, from CodinGame’s survey we can find out that the shortage of developers is a real deal. HR professionals predict that they will mostly struggle with finding DevOps, back-end developers, and full-stack developers. This leaves the opportunity for outsourcing companies as the market and the need keeps on growing.

But what software development outsourcing trends are dominating the first quarter of 2021 and how will the rest of 2021 look like?

Software Development Outsourcing Trends in 2021

Steady Growth of IT Outsourcing Market in Eastern and Central Europe


Even though India and China still rank the highest when it comes to outsourcing foreign developers, PolandUkraine, and Belarus keep on expanding their offer. These outsourcing countries are becoming a competition to be reckoned with.

It shouldn’t come as a surprise though, as the Polish IT/ICT sector was responsible for 8% of Polish GDP in the year 2018, according to the official statistics. Low living costs combined with highly-skilled professionals make Eastern and Central Europe a very desirable and interesting market. Day by day the number of businesses using outsourced employees grows.

Cloud is the Future


The increasing popularity of cloud technology can be also noticed in the IT sector of outsourcing. As reported by Statista, 77% percent of cloud services used in organizations in 2019 were SaaS services and the prospect is that it will only grow.

Cloud services are known for storing all kinds of data, but unfortunately, they’re prone to various threats that await online. That’s why tech companies are looking for a good, established, and most importantly, secure cloud service.

Cyber Security Need Will Grow

Every now and then you can hear about yet another cyber attack. Someone hacked someone, threatened them, released private information, etc. In 2013 and 2014 the biggest data breach in recorded history happened when the sensitive information of an astonishing number of 3 billion Yahoo users were compromised. It’s no surprise that cyber security is a huge deal in the IT outsourcing industry and security services are much needed.

Statistics show that cyber crime will cost the world 6 trillion dollars annually by 2021, which is quite a sum. Just to compare, in 2015 that cost was estimated at 3 trillion dollars, which is a 50% increase over the course of 6 years.

Also, what appears to be quite scary is that in the year 2020 alone, 30,000 websites have been the victims of cyber attacks per day! That gives us a huge number of 10,980,000 websites attacked in the sole year of 2020.

Even though companies that base their business on the SaaS model have also been affected by the pandemic, it still notices an increase in popularity. Some entrepreneurs may find the SaaS business model appealing as it offers a stable and scalable cash flow. Though these days companies often decide to alter their existing models to meet the needs of customers, for instance, changing subscription plans. Unfortunately, SaaS is no different than any other service, as it also may suffer from online threats or cyber attacks.

Blockchain Services Are On the Rise

Also known as digital ledger technology, Blockchain may not only help the companies with their security and transparency but may also help with fraud prevention, as well as with handling sensitive transactions. Along with the growing demand for the services, grows the need for Blockchain experts.

Companies will try to hire the best of the best, while the market will keep on expanding along with the shortage of Blockchain specialists. It’s projected that by the year 2024, the Blockchain solutions will be worth almost $18 billion.

Artificial Intelligence Will Keep Progressing


Artificial Intelligence is becoming more present in our everyday lives, whether it’s an intelligent car, kitchen appliances, or software, it’s making its presence. When it comes to software outsourcing, the year 2021 is expected to be the year of AI.

It’s nothing new though. The bots or virtual assistants have been with us for a while now, but this time their further expansion is predicted. The plan is for AI to assist businesses in everyday work. What’s more, a working and useful AI on the website can also increase the overall customer experience. These models work accurately and improve customer experience with an annotation tool that trains artificial intelligence models. There is a variety of different software that uses AI on a daily basis, for example, Spotify uses AI to suggest songs that you might also like or Gmail that can make your typing faster by hinting the words.

When it comes to statistics, the AI market is forecasted to reach 190.61 billion of worth by the year 2025.

Python And JavaScript Remain On the Podium

Even though another language called Rust is getting closer and closer to conquering the programming mountain, the top can still be achieved by the mainstream languages, like Python or JavaScript.

According to the survey conducted by Stack Overflow, JavaScript remains the most popular programming language with a score of 67.7%! On the other hand, the title of the most loved language is being held by Rust with a score of 86.1%.

When it comes to JavaScript, it’s a very versatile programming language. Coders use it for programming all sorts of appliances, ranging from smartphones, TVs, fridges, to the website’s front- or back-end.

In that same survey we can find out that 43.3% of respondents are using the jQuery framework, with React.js being in the second position scoring 35.9%, and Angular being the last on the podium with 25.1%.

What Is Rust?

Some of you may also wonder, what is Rust? It’s an open-source programming language that is considered a “fan-favorite” among developers, due to it using low resources and being fast-performing. Rust competes with well-established languages, such as C++ or Java. It’s designed to be a simple, clear, and rewarding programming language once you get to know it.

What’s worth mentioning is that Mozilla was Rust’s first investor, though it had its unfortunate moments. The pandemic forced Mozilla to furlough some of its Rust employees. However, every cloud has a silver lining. The members of the Rust team have launched the Rust Foundation, composed of various personalities from founding companies (such as Mozilla, Huawei, Google, Microsoft, or AWS).

Rust was manufactured to be the hybrid of high-performance, low resource usage, and syntax of high-level languages with a really useful feature – its error messages are clear and as descriptive as it gets. Additionally, Rust-written programs can run on devices without Rust even being installed.

Rust is suitable for coding back-end and front-end, though when it comes to the latter, it requires the usage of WebAssembly.

Further Expansion Of Internet Of Things

Internet of Things (IoT) connects multiple devices into one network, for instance, smart home devices. These days plenty of people possess at least one such device, ranging from activity trackers to home security. In order to function properly, they require really secure software.

Expanding IoT generates the need for developers who can work on the system and provide the most secure solutions. Without the working and safe software, the devices would be an ideal target for cyber attacks.

Of course, IoT is not limited only to such devices. It can be applied to all sorts of software, for example, a fridge that has a built-in screen with an internet connection (that can order you food by itself), beacons at a museum that can guide you all around, or GPS that shows you the ideal path to lead you to your destination.

A variety of programming languages can be used for coding devices that are meant to be a part of the Internet of Things, among them would be:

  • C++;
  • Python;
  • JavaScript;
  • Swift;

And even more! There’s really no guide to which language you should choose.

A Shift In Partnership Approach


The partnership between the hiring and outsourcing company may evolve. The relationships between the two are predicted to become much more “human”, as the outsourcing company won’t be simply recognized as a place for additional employees.

Outsourced employees will have much more to say in terms of decision-making, quality, strategy, and production, compared to how it used to be before.

Software development teams can be outsourced based on various IT outsourcing models, which enables the business to choose which model suits their idea best. Of course, the level of involvement of the software development team will depend on the chosen model, though the relationship between the hiring business and the software development company is predicted to evolve.

Shortage Of Skilled In-House Developers On the Market…

We mentioned it at the beginning of this article, but it has to be stressed again. According to the statistics found on the U.S. Bureau of Labor Statistics website, the need for skilled software developers will increase by 22% in the years 2019-2029, making it the fastest-growing occupation in the United States.

Judging by that fact alone, it’s safe to say that the demand for software engineers and talent shortage will just keep on growing, leaving the outsourcing industry with more opportunities.

Taking this into consideration, we can safely assume that the result of the shortage will be an increased demand for software development outsourcing companies and their employees.

…And More And More Outsourcing.

Last but not least, a result of developer shortage on the local markets – the growing need for IT outsourcing companies. Businesses are predicted to spend more and more money and partner with even larger numbers of software outsourcing companies.

Though the shortage of developers isn’t the only reason. The main priority for the company would be to find someone who can provide their products and services with the finest quality and do their job to the best of their abilities.


Key Takeaways

Despite the obstacles, 2021 is a year of IT progress. Technologies keep advancing no matter what. Knowing the trends is also important, as it can guide towards a certain direction. To sum them up, you should remember that:

  • Cloud services are the future of the IT industry;
  • Focus on security services will grow even more, as even the biggest players suffer from data breaches;
  • AI will keep progressing and IoT will expand;
  • There will be more outsourcing opportunities.


And here are the most important IT outsourcing trends in software development. There are a lot, and I mean a lot of IT outsourcing trends that we didn’t cover because it would be nearly impossible to mention them all in one article, though we chose the most important ones.

Out of all of them, there is one that stands out the most – and yeah, you guessed it – it’s the shortage of experts in IT fields. Different businesses will definitely look for various outsourcing service providers and that alone creates a big enough opportunity for software companies to grow and develop. What you should remember is that the IT outsourcing sector is such a dynamic industry that the trends might change in a blink of an eye.

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Wojciech Baranowski

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