Remote development centers are here to stay. This became especially obvious after the first lockdown, when even the most conservative tech nations had to face the undeniable truth — remote development is safe, productive, and cost-efficient.
- Offshore development center trends
- The definition of offshore development center (ODC)
- A tour of an offshore development center
- Major functions of and benefits of offshore development centers of offshore development centers
- The best countries for opening a remote development center
What Trends Make Offshore Development Centers So Common?
A growing talent shortage and an increasing demand for high-tech skills in fast-developing tech markets are the two major trends that fuel the rapid growth of offshore development centers.
In 2020, there were only 400,000 CS graduates to match a staggering 1.4 million open tech vacancies, according to the US labor statistics.
As a result, the US is expected to lose approximately $162 billion of unrealized output in 2021.
While in 2020, there were 40 million unfilled jobs globally, specialists predict that the world will be 85.2 million workers short in 2030.
In a decade, companies all around the world will lose up to $8.4 trillion due to skill shortages.
Research by McKinsey shows that 87% of tech companies are already experiencing a talent shortage.
Sweden isn’t an exception — its tech industry will be unable to fill 70,000 developer vacancies by 2022.
The same situation is seen in Israel, where 15% of tech companies experience a severe lack of programmers.
These two trends launch an avalanche of side effects, such as inflated salaries of software developers, an overheated employment market, and a shortage of skills available locally.
Consequently, many tech businesses try to tap into remote tech talent, found in countries such as Ukraine, by working with offshore vendors that provide offshore development center services.
What Is an Offshore Development Center (ODC)?
An offshore development center is a tech company located in a foreign country that provides software development services. The services can vary depending on the client’s needs:
What is an offshore development center?
An ODC can offer you the following services:
- Building a remote team of developers according to your requirements who will be fully dedicated to your project.
- Setting up an entire software development center for your company, hiring the core team, and functioning under your brand.
- Taking on the full scope of development for your project and staffing it with their existing developers.
- Providing added value services such as quality assurance, DevOps engineering, security testing, process consulting, tech talent relocation, and other.
What Does a Remote Development Office Look Like?
In Ukraine, one of the most popular destinations for building offshore development centers, ODCs are placed in comfortable and modern offices with all the necessary utilities.In many IT outsourcing companies, developers who work on different projects share the same open space.
Tech companies that specialize in building remote development centers and remote development offices traditionally ensure data security so you’ll see that:
- Each team is placed in a separate room or space.
- The office can be accessed through fingerprint locks or passcards.
- Developers can book meeting rooms that are allocated for each team.
- The vendor ensures data security through physical and software security systems.
Who Needs a Remote Development Office?
Opening an outsourced development center is most common among middle-sized and large tech companies. So, when should you consider opening a remote development center:
- You plan to hire more than 30 employees in a remote location.
- You want to expand the presence of your brand to countries with a large number of tech specialists.
- You want to optimize your development costs.
- You want to have your products developed under your own brand name.
But what if you don’t need a large development team and are only looking to hire eight to ten engineers instead?
Those who aim to build teams of twenty or fewer people can try working with an outstaffing vendor. The vendor will build a dedicated team of remote developers whom you’ll manage directly.
What Functions Do Outsourced Development Centers Cover?
Your tech vendor can provide you with the most basic functions, such as hiring the core team and finding an office, as well as more advanced ones, which may include but aren’t limited to:
- Hiring account managers, project managers, quality assurance engineers, software developers, designers, marketing specialists, etc.
- Setting up HR processes aimed at attracting new talent and retaining the existing employees.
- Enabling proper functioning of an ODC by providing infrastructure and hosting services.
- Empowering your development processes with big data, cloud computing, and data migration services.
- Providing 24/7 support and maintenance of your product.
What Are the Major Benefits of Building an Offshore Development Center?
The three major advantages of working with a tech vendor that provides offshore development center services are:
- Direct access to top tech talent, which enables you to hire qualified specialists at a reasonable cost, scale up and down fast, and choose people that match your business goals.
- Saving up on infrastructure by using the virtual office space, IT infrastructure, and equipment of your offshore provider. This sufficiently shortens product development time.
- Changing team composition with ease by adding and releasing employees according to the required work capacity. Hire and release technical specialists when changes are necessary.
What Are the Best Offshore Development Countries for Building a Remote Development Center?
In the last decade, large tech businesses have been gradually moving away from building remote development centers in such once-popular offshore destinations as India, the Philippines, and China.
Countries of the Eastern European region including Ukraine, the Czech Republic, Romania, and Belarus have joined the list of the best offshore development countries in the world for building remote development centers.
Ukraine - One of the Best Offshore Development Countries for Building a Remote Development Center
Ukraine has been gaining momentum in the last five years, growing its tech industry by 26% each year since 2016. Currently, there are more than 200,000 tech experts in Ukraine’s tech industry.
Ukraine’s capital city Kyiv has gotten into the list of the top 20 cities for remote work according to the Big 7 Travel report. What’s so great about Kyiv? It has one of the best co-workings and strongest professional communities in the world, the living expenses are moderate, and the country offers special visas for digital nomads.
Build a Remote Development Center with Daxx
Daxx has helped more than 300 clients from around the world to set up their own remote development centers staffed with Ukrainian developers.
We conduct regular interviews with our clients to share their experience of setting up remote development centers with Daxx.
Our company has enough capacity to help clients build cross-functional dedicated development teams as well as a strong employer brand that attracts experienced Ukrainian programmers.
Contact our sales representatives, share your needs, and find a suitable solution for your business.