The True Cost of Outsourcing Software Development Overseas

One of the main reasons why so many businesses decide to outsource .net software development to the so-called developing countries is that foreign programmers charge less than domestic developers. Should you expect to get a quality product without spending a fortune? This is a good question because many companies end up cursing the day they decided to outsource their project. You can’t get the best result without remunerating other people’s work. So, maybe it’s better to turn to domestic developers? To make the right decision, you need to have a clear idea of the real cost of both offshore and domestic outsourcing.


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First of all, what is domestic outsourcing? It’s when you recruit an IT team within your city or country rather than hire an in-house developer. In the USA, for instance, developers’ salaries vary from state to state, so you can choose a company from a more “budget-friendly” city. Since the salaries of that company’s employees include not only their hourly costs but also other payments, such as insurance, taxes, the company will charge you twice as much. If you need a team of programmers for a current project and there is no point in creating an IT department in your company, an outsourced company can be a solution. However, it will cost you much more than an in-house team. A cheaper alternative here will be to outsource offshore.

Foreign developers work at much lower rates than their American counterparts. It means that you can hire a senior developer and pay him even less than you would pay an inexperienced one in the US. Don’t commit your project to the cheapest foreign programmers. As a rule, novice developers with little experience are the cheapest. If you want to outsource to a quality foreign team, the optimal pricing is $35 and higher.


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Simon is Tech blogger. He contributes to the Blogging, Gadgets, Social Media and Tech News section on TechFlaps.