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Home Blog Trends Why Will 79% of Software Development Companies in the Netherlands Outsource More in 2020?

Why Will 79% of Software Development Companies in the Netherlands Outsource More in 2020?

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Dutch IT companies are outsourcing software development in order to optimize costs and combat local tech talent shortage. 79% of software development companies in the Netherlands confirmed that they will continue to outsource ICT services at the same or at an increased pace in 2020.

Due to remote work, the usage of digital services has increased sharply — online education platforms (+68.7%), video conferencing (+65%), virtual desktops (+63%), and electronic signing (55.7%) are now used more. Naturally, this entails the expansion of the software development scope for companies in these domains turning the software industry into a driving force for an increasing number of Dutch IT companies.

Topics covered in this article:

  1. Which Industries in Dutch Software Development Are the Most Popular?
  2. Talent Shortage: 54,000 Unfilled ICT Vacancies in 2020
  3. Reasons Why Will Dutch Companies Outsource IT services in 2020
  4. 5 Compelling Reasons to Build Extended Development Teams with Daxx

The Dutch IT tech scene is considered as one of the strongest in Europe. According to Holland Trade and Invest, the Netherlands has generated globally-competitive software programmers and IT consulting in a variety of sectors including business, simulation, mobility, healthcare, and safety. 

No wonder that in such a fast-growing and constantly evolving environment, the Netherlands is considered as one of the four largest IT service providers in the world. 60% of the companies mentioned on the Forbes 2000 list are located in the Netherlands. These companies include Cisco, Oracle, Google, Microsoft, IBM, Intel, Verizon, Huawei, and many other global players. Amsterdam alone is home to more than 800 startups and 170 different IT companies.

Which Software Development Industries in the Netherlands Are the Most Popular?

Software development sectors in the Netherlands are characterized by the development of cloud computing and the digitization of the economy.

The Dutch IT sector is growing at an accelerating speed. Software development companies in the Netherlands specialized in producing application software (67%) and system software (33%).

software development sector in the netherlands

Software development sector in the Netherlands (application and system software)

Additionally, there is a strong need to focus more on core business principles, improve service quality, reduce costs, get access to resources and innovations, etc. Well-trained specialists in information and communication technology are in great demand with annual job vacancy growth of 1.2%.

Employees are sought after in all types of ICT positions. Any combination of ICT with other skills (in health, security, and education) will be a viable plus.

Another fast-growing sector that is attractive to software development companies in the Netherlands is security software. This tendency can be partially explained by the rising software complexity and an increasing number of technological threats. Starting in January 2016, Dutch IT companies are required to report data about leaks and hacks that could affect other users. The Netherlands plays a leading role in the recently adopted EU Data Protection and ICT Security Directive.

The software development sector in the Netherlands is divided into corporate and local software development. Software development companies in the business sector generally provide services in data analysis and information sharing. As a result, this facilitates the growth and usage of software development in the governmental and financial sectors. In comparison, local software development concentrates on business applications and custom products.

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What Are The Most Common Challenges for Software Development Companies in the Netherlands?

Finding the right staff under conditions of shortage of technically skilled talent remains the most time-consuming challenge when it comes to growing your software development company. In 2018, 46% of all vacancies for software developers in the Netherlands were difficult to fill.

In 2019, 40% of Dutch entrepreneurs mentioned a shortage of talent as an obstacle to the expansion and development of their software development company. That number is expected to increase by 54,000 in 2020.

shortage growth in the netherlands

Talent shortage growth is the main challenge for Dutch IT companies

Due to the fast pace of the software development industry and labor shortages, a growing number of medium-sized companies continue to outsource their ICT work. Other factors also contribute to this hunger for IT outsourcing: there is a strong need to pay more attention to core business principles, improve service quality, reduce costs, and have access to resources and innovation.

Why Will Dutch IT Companies Outsource More?

In general, businesses are satisfied with their ICT service providers: 86% of all 405 ICT outsourcing relationships are considered to be satisfactory, 8% are somewhat unsatisfactory, 4% are dissatisfied and only 2% are very dissatisfied.

The main reasons why Dutch companies outsource:

  1. Focus on core business(63%)
  2. Improve service quality(53%)
  3. Reduce Costs (49%)
  4. Drive innovations(41%)
  5. Access to tech talents(41%)
  6. Add more financial flexibility(28%)

why dutch companies outsource

Reasons why Dutch companies outsource

Companies such as Vida XL, Widget Brain, and Carerix saw software developer shortage in the Netherlands at an early stage and opted for outsourcing their software development to Ukraine with Daxx.

Lex de Groot, Software Development Manager at Vida XL says: "Now that we all work remotely, we see that our Daxx employees are an equal part of our development team."

According to the Dutch IT Sourcing Study 2020, 79% of companies confirmed that they will continue to outsource IT services at the same or at an increased pace. Cost-saving is the main motivation when scalability is also an important consideration for many companies.

Companies that opted for outsourcing in Ukraine at an early stage gained the upper hand among competitors. Arco Westbroek, Head of Products at Carerix says: "I'm really happy with Ukrainian developers. We are satisfied with the level of tech expertise, the approach, and proactiveness of our Daxx developers. "

Reinier Meerwaldt, CTO at Widget Brain, also sees the benefits of working with Daxx: "In these disruptive times, Daxx is doing a good job in maintaining the team spirit within our development team, from yoga classes to setting up home offices. The efficiency and morale of our team remain high."

Extended Development Teams with Daxx

Daxx is a Dutch software development company with nearly 20 years of industry experience. It helps companies build dedicated software development teams in Ukraine. Moreover, Daxx assists businesses in selecting the right technology, conducting code reviews, discovering security issues, and other value-added services.

Guide to Nearshore Software Development in Eastern Europe

Software development market statistics of the tech countries — Poland, Ukraine, Romania, Czech Republic, Hungary, Bulgaria, Belarus, and Croatia.


How to Build a Nearshore Development Team with Daxx:

  1. Share your preferences. First, Daxx recruiters gather all the information and requirements for your project in order to understand your business needs, and find suitable candidates that are proficient in required technologies, have the necessary background and experience.
  2. Recruitment stage. Once we clearly understand what type of candidate you need, we carefully examine our database in order to choose ideal developers for you.
  3. Interviewing the candidates. Next, the client personally interviews all of the suitable candidates. The good news is that you are not limited to a certain number of interviews — we will not stop until we find the best candidate for your project.
  4. Start working. Immediately after the candidate has signed the offer, you are able to start working. We will handle all of the administrative and legal issues, paperwork, employee retention, and provide well-equipped working spaces, while you are able to focus more on your business.

5 Main Advantages of the Daxx Model:

1) Transparency. The extended team model, which is used by Daxx, is clear and simple.

  • You manage your development team directly, without third-party interference using the tools and methods you know and love.
  • You personally interview the potential candidates and choose the best fit ones.
  • You are able to hire a single programmer or an entire development team depending on your needs.

2) No upfront costs. You only pay for the services you actually use. According to the Daxx model, you are not required to pay any upfront costs. You pay only a fixed monthly fee after you sign the contract and start working with the software developers you have chosen.

3) No fees required in order to terminate your contract. It is easy to scale up or down your software development team. Thanks to our model you can easily terminate the contract — just notify us 1 month in advance.

4) Professional candidates. The team at Daxx carefully pre-selects the candidates for you, taking into account all of the requirements that you have provided. You will save time by interviewing only the top candidates. Ukrainian developers are known for their diligent work ethic, strong programming skills, and English language skills.

5) Value-added services. If you need assistance in selecting the right model or technology for your business, have security concerns, or simply want to conduct a profound analysis of your business, don’t hesitate to get in touch with Daxx team.

We provide the following services:

As a Dutch legal entity, Daxx simplifies the contract process for Dutch clients. Additionally, Daxx is a member of the American Chamber of Commerce in Ukraine and the IT Association of Ukraine. It has been awarded the “Orange Carpet Treatment” by the Dutch embassy. In 2020 Daxx was certified by TÜV SÜD according to ISO 27001.

Drop us a line to learn how you can handle the tech talent shortage in the Netherlands, receive benefits, and extend your tech expertise.

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Juliya Mankovskaya

Juliya Mankovskaya is an avid Outreach Specialist at Daxx. She is passionate about Digital Marketing, IT and modern technologies. Juliya is responsible for Daxx social media promotion and external publications.

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