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Global software services overview

The global software engineering industry has experienced significant growth over the years. In 2022, there were approximately 26.9 million professional software engineers worldwide, a substantial increase from 21 million in 2016. By 2030, this number is projected to reach 45 million.

India has emerged as a major player in the software development arena, surpassing the United States with 5.8 million developers compared to 4.3 million. India boasts a vast network of around 230,000 software services companies, while the United States has over 500,000 software companies. Together, these two countries account for approximately 40% of the global software developer population.

Europe houses another 5.5 million software developers, while countries like Brazil (500,000 developers), Ukraine (200,000), Singapore (200,000), Mexico (100,000), and Romania (100,000) contribute an additional 1.1 million developers to the global workforce. Australia and the United Kingdom employ around 120,000 and 400,000 developers, respectively.

When it comes to outsourcing software projects, Latin America and India are highly sought-after destinations. India, known for its large pool of developers, offers cost-effective solutions with developer rates ranging from $18 to $25 per hour. In comparison, Latin American developers typically charge higher rates, ranging from $35 to $45 per hour. Consequently, India is often a preferred choice for outsourcing projects and hiring individuals as contractors.

Why choose a software agency over a freelancer for hiring?

Freelancing involves risks, and not everyone is suited for it. If a freelancer faces a health or family crisis, there are no backup teams available, and your project knowledge is solely dependent on that individual, potentially wasting time. Moreover, freelancers have to constantly search for new clients, and if it takes months to find the next one, it can lead to financial uncertainty.

In contrast, hiring software developers from agencies as contractors is more reliable. Software agencies provide a solid infrastructure, reporting managers, and take care of payroll and benefits for their contractors. Opting for contract talent from agencies makes sense because signing a contract with a company offers better protection compared to an individual. In case of conflicts, courts typically favor individual liberties, whereas having support from an organization is always advantageous.

Why hiring individuals from agencies as contractors is a preferable and cost-effective alternative to outsourcing?

In search of outsourced projects, many companies are turning to freelance networks in an attempt to generate leads. For instance, a company with 15 employees creates 500 fake profiles across various freelance networks to attract potential clients. However, out of the 15 individuals, only 2 possess the necessary English proficiency, experience, and communication skills to interact with clients, while the remaining 13 handle the actual workload. Unfortunately, this arrangement often leads to projects being delivered late or incorrectly quoted to secure bids, leaving both the client and the agency in a difficult position. This is a significant challenge when outsourcing projects.

However, our findings indicate that outsourcing projects to software agencies (MSPs) proves to be much more expensive compared to hiring individual professionals such as developers, designers, testing teams, and project managers and managing the project in-house. By hiring individuals from agencies, companies can save at least 30% compared to outsourcing. This approach not only provides cost savings but also grants clients better control over both the people involved and the overall project.