As Jean-Paul Sartre once said, "We are our choices". Bet you didn’t see this coming. In terms of choosing the most winning destination for software development outsourcing, Sartre’s wisdom is definitely not the first thought that springs to one’s mind. However, as far as the decision-making process goes his words are suitable. Sometimes the success of the whole company depends on one decision. From this perspective, the right choice of a reliable software development company should be thought-through. It goes without saying that Ukraine is a good choice as a software development partner. The question is, "Is it the best?". Before we dive deeper into the reasons in favor of outsourcing software development to Ukraine, take this.
Being one of the key players in the global tech arena, Ukraine takes the leading position in Central and Eastern Europe when it comes to software engineering. The country is facing the best time for realizing its potential in the IT industry. The Ukrainian IT talent pool is constantly increasing, reaching the mark of 200,000 qualified software developers. Ukrainian specialists have broad tech skills that are recognized across many world-famous companies. The number of startups and R&D departments is growing in Ukraine. More than one hundred global companies have chosen Ukraine for opening their R&D facilities. Hold up, that’s not all. The best is yet to come.
Outsourcing software engineering to Ukraine: facts, figures, and stats
- As of 2020, the number of qualified IT professionals has reached more than 200,000.
- Ukraine is home to 1,600+ IT services companies and 4000+ tech companies.
- The Ukrainian tech pool is located in main cities such as Kyiv, Kharkiv, Lviv, Odesa, and Dnipro.
- 30,000+ tech specialists graduate in Ukraine annually.
- The average rate for the services of a software developer is $34-64/hour.
- The IT industry export volume of Ukraine is about $4.5 billion.
- More than 80% of IT specialists are proficient in English.
- There are more than 100 multinational R&D centers in Ukraine.
- Ukraine holds the 20th place among the 50 most attractive outsourcing destinations in the Global Services Location Index by A.T. Kearney.
- The industry of software development outsourcing of Ukraine is now 40 times bigger than it was in 2003.
- Outsourcing Journal has named the Ukrainian outsourcing market as the 1st in Eastern Europe.
Reasons why the world's tech giants outsource software development to Ukraine
Let’s take a shift from the general to the specific. You definitely want to know more about Ukraine software outsourcing and the reasons for going this way.
Among the best
Ukrainian developers are among the best and brightest in the world taking up the 5th place only behind Slovakia, Mexico, Poland, and Hungary. Their average score index is 93,17%. In the software development arena of Europe, Ukraine ranks 4th among the best. Gartner has included Ukraine in the list of the top 30 World Outsourcing Destinations in 2010-2014. Colliers International has awarded Ukraine with 1st place by the number of software engineers in CEE.
Literacy and education
Ukraine encourages youth to study Computer Science. Thanks to the availability of educational institutions (there are over 400 universities and colleges), students have lots of opportunities in the information technology industry. On average, 30,000+ students graduate from local universities and colleges with tech degrees annually. On top of that, Ukraine has been included in the top 10 countries with the biggest number of engineering, construction, and manufacturing graduates with an annual number of 130,000 specialists. Ukraine sees the bright future of innovative technology. Thus, the country encourages launching various educational tech programs at schools to make students interested in the IT industry.
As for the overall literacy of Ukrainian people, the rate is among the highest in the world having reached 99.8% as of 2015.
A growing number of software development companies
Taking into account all of the aspects mentioned above, it doesn’t come as a surprise that the number of Ukrainian companies engaged in software development has grown almost two times since 2011. As of 2020, there are more than 1500 software development companies in Ukraine. These companies provide all kinds of IT services, from web design and development to app development and QA testing. In case you are not used to taking the quantity as worthy proof, there are 100+ businesses out of Fortune 500 that apply for the services of IT companies from Ukraine. 18 outsourcing companies in Ukraine have made it to the list of the top 100 best outsourcing companies in the world.
World-famous Ukrainian startups
The bright minds from Ukraine have received worldwide recognition thanks to the innovative startups. GitLab, Grammarly, Jooble, TemplateMonster, to name a few, are all successful startups from Ukraine. A lot of global market leaders have taken advantage of the local startup scene. For example, Looksery, which is a real-time face modification app, has been acquired by Snapchat. Oracle Corporation has purchased Maxymiser to add more value to their cloud engineered systems. Being the main tech hub in Ukraine, Kyiv can boast of more investors than such heavyweights as Oslo, Vienna, Warsaw, and Copenhagen. The amount of investment in Ukrainian startups is pretty impressive. In 2017, the sum was nearly $250 million while it grew to almost $340 million in 2018.
Research and development centers
As a country with an economy that ranks among the 50 most innovative ones in the global arena, Ukraine counts 110+ R&D departments for such world tech leaders as Apple, Microsoft, IBM, Oracle, and Wargaming. The list can go on and on. These companies have entered the Ukrainian IT market by means of outstaffing, opening research and development centers, and through M&As.
The tech community of Ukraine is very active and takes part in global conferences as well as organizes local ones. Big cities like Kyiv, Kharkiv, Dnipro, Lviv, and Odesa have their own IT clusters that bring together technology specialists, educational institutions, companies, and local authorities to develop the local tech environment.
Among the most well-known conferences that are held in Ukraine are the following:
- iForum is one of the largest and most influential conferences for internet professionals.
- Lviv IT Arena is another huge IT event that is held annually. This conference brings together different representatives of the global tech industry.
- Annually held in Kyiv, the Games Gathering B2B Conference unites game developers to discuss the industry and creation of great gaming content.
- DEV_Challenge is an exciting championship on software development that is divided into web development, mobile development, and game development categories.
- The Agile Eastern Europe Conference is called to encourage the world’s best Agile and Scrum practices for improving software development in Ukraine.
While the whole country of Ukraine ranks 49th in the English proficiency ranking globally, it is safe to say that the situation within the software development industry is a lot brighter. All Ukrainian software engineers have a decent level of English proficiency. More than 80% are fluent in English according to the survey conducted by DOU. Thanks to the fact that the prevailing part of Ukrainian IT specialists has an intermediate English level or higher, communication with foreign customers is smooth and clear.
Attractive outsourcing rates
One of the main things that make Ukrainian IT outsourcing so attractive is the country’s pricing for outsourcing services. Having a much bigger tech talent pool than most European countries, Ukraine can offer much more competitive outsourcing rates as well. This puts Ukraine in front of such tech hubs as Poland, Belarus, and the Czech Republic. As for the average hourly rate for the development of software products, Ukrainian specialists charge between $25-$50.Speaking of the monthly wage of developers, salaries vary from $500 to $1,400 to $3,300 for entry-level, middle, and senior respectively. These rates don’t usually include taxes and social contributions. If we take the USA, for example, the hourly rate would be higher than $100. On top of that, the country’s government has improved the ease of doing an outsourcing business.
When cultural backgrounds are way too different, doing business might become challenging. The culture influences work ethics and approaches to completing certain tasks. Due to the fact that Ukraine sticks to Western practices of doing business and to the world standard work ethics, software development vendors from Ukraine have gained a great reputation among companies who look for quality software specialists to hire. Ukrainian IT specialists are always open to learning new technologies. They overcome challenges creatively and are 100% committed to the project they are working on.
Time zone and visa issues are in the past
While it may sound insignificant at first, things like different time zones and the necessity of receiving a visa to get to a country might stand in the way of successful outsourcing. Luckily, with Ukraine, these issues are no longer the issues. Ukraine is only 1 to 2 hours ahead of the European countries’ time and is 7 hours ahead of the East Coast of the USA. This means that by the time you open your office, your Ukrainian software developers will be already busy as bees. It is true that building and managing a remote development team is not a piece of cake. However, Ukraine makes it possible for foreign citizens to visit the country without a visa for 90 days. On top of that, Kyiv is connected to all major world cities by the means of regular direct flights. Some low-cost companies like Ryanair or Wizz Air offer very cheap tickets.
The flattering economic environment
It is said to admit that the unstable situation in the eastern region of Ukraine has had some impact on the activity of IT businesses. On the other hand, the government of the country has been putting much effort to make the environment for doing business more convenient, flattering, and safer. During the past 5 years, Ukraine managed to go 20 positions up in the ranking of the World Bank's Ease of Doing Business. As far as the tax system goes, the flat rate is now lower and makes up only 22% compared to the previous rates that ranged from 36.76% to almost 50%.
Wrapping things up
Without a doubt, there are quite a few alternatives to Ukraine when it comes to outsourcing software development. However, if we take the quality-accessibility-cheapness ratio, Ukraine holds the upper hand for sure. We hope that the reasons we have signed out here are enough for you to make an informed decision on whether Ukraine is a perfect destination for outsourcing your software development. In case you are interested in cooperation, feel free to reach out to us here.