Over the past few years, a large number of businesses have turned towards offshore software development companies to achieve their development goals. According to Verified Market Research, the market size of offshore software development was $122 billion in 2024 and is expected to grow at a CAGR of 10.13% to reach $283 billion by 2031.
The increasing market size demonstrates how companies and businesses are relying on offshore software development services. Earlier, the cost-effectiveness was the primary consideration for businesses when outsourcing. However, the trend has shifted to accessing global talent, accelerating development, eliminating the hassle of hiring an in-house team and more.
However, finding the right offshore software development company is crucial for your business. The success and failure of your project your selection. Therefore, don’t rush like others to make an instant decision until you understand what offshore development is, who should hire, the benefits of hiring, how to hire and more.
This comprehensive guide contains all the essential information to help you understand offshore software development to find the right software development company.
What is Offshore Software Development?
Opting for offshore software development services means recruiting a tech team, typically software engineers, QA specialists, designers, and project managers from different countries to handle development needs. These countries are far away from the recruiter’s country, often with a different time zone and culture.
Businesses approach the top IT companies and hire developers from a large pool of experts available worldwide. Offshore developers help companies transform their ideas into successful products.
From collaboration to planning, execution to development and deployment to maintenance, these experts offer complete before-and-after services to enable businesses to achieve their objectives.
What Services do Offshore Software Development Companies Offer?
When you work with an offshore development company, you gain access to the experts who help you throughout the development process and complete it. From requirements analysis to planning, guiding with the right talent to accelerating the development cycle, fostering effective communication to assuring quality and introducing software to offering maintenance, they help you deal with everything.
Services they offer:
- Custom Software Development
- Mobile App Development (Android and iOS)
- eCommerce Development
- Cloud Computing and DevOps
- AI and ML Development
- UX/UI Design
- Data Management
- Marketing Automation
- Support and Maintenance
- Software Testing and Several More Services
Reduce Your Development Cost with the Right Tech Talent
What are the Differences Between Offshore and Onshore Development Teams?
The selection between offshore and onshore is an independent decision that businesses take. It’s a strategic approach. They choose depending on their needs, budget, timeline, goals and more. Let’s compare the common differences between offshore and onshore in the table below:
| Key Aspects |
Offshore Software Development Team |
Onshore Software Development Team |
| Location |
Businesses hire experts from different countries. |
The onshore development team is located within the same country. |
| Talent Pool |
Allows access to the global talent |
Limited to local talents |
| Communication |
Establish communication using digital platforms such as video calls, emails, and chats |
Allows businesses to communicate face-to-face |
| Recruitment Cost |
Cost-effective, Offshore developers are available with a lower development cost. |
Onshore developers, especially from developed countries, cost more
|
| Scalability and Flexibility |
You can scale up or down the team based on your project’s needs. |
The onshore development team is less flexible when it comes to scaling up or down the team. |
| Hiring Process |
You can simply connect with the top IT companies and recruit their best tech talent in a few steps. |
The hiring process is lengthy, and expertise is needed. |
What are the Benefits of Choosing Offshore Development Services?
What motivates businesses to hire offshore software development companies includes cost-effectiveness, specialized skills and expertise that they can’t achieve with local talent. Let’s explore the benefits of choosing offshore software development services.
1. Cost-Saving Option for Developing Software
Partnering with an offshore partner means contracting software development projects to a company that is equipped with all the essential tools, infrastructure, along the right experts.
Businesses don’t just get access to the experts at a lower salary but also eliminate additional expenses that may be needed for infrastructure, resources, tools, maintenance and many more.
Ultimately, businesses save a lot of money by partnering with an offshore software development company. Let’s make it clear how development costs are different through an example.
Suppose a company in the US is looking to hire an iOS app developer. The hourly rate for an iOS app developer in the USA is anywhere between $50 to $300 and depending on the specific requirements. However, by offshoring development to countries like India, where the development cost is lower, the company can hire iOS app developers starting at $20 an average of $20-$80, often below $100.
You can see the difference between the hourly rate in the US and India. In the long run, the difference can be significant.
2. Allows Businesses to Access Global Talent
Offshoring software development allows businesses to hire experts from different countries without worrying about the distance. They connect with the top IT companies overseas and find the right tech experts.
Unlike onshore hiring, businesses are not restricted to recruiting talent from the same country or locality; instead, they gain access to global talent, where each individual is a master of their domain. They are ready to fill the skill gap with their exceptional development skills and services.
Important: The demand for developers is high and there are several countries that lack skilled developers.
Most of the Western countries turn towards India when they look for an offshore software development company or qualified tech experts. Today, India is a leading offshore software development services provider in the world with a large pool of global talent.
3. Easy to Scale Up or Down the Development Team
Offshore development companies give you flexibility to scale up or down the team based on your development needs. What makes it more impactful is their fast recruitment process.
Business means that uncertainty is always there. The demand can increase or decrease at any time. Therefore, flexibility to scale up or down the team is always advantageous.
Suppose you have 5 developers working on your project. Suddenly, you need 3 more developers to accelerate your development. Primarily, you can hire them in two ways: if you have an in-house team or partner with an offshore company.
- Hiring in-house will take time. There are several steps associated with it, such as job opening, job posting, connecting candidates, finalizing potential candidates, interview, vetting specialists, recruitment, and more. It may take days to months. Even initial training and understanding of the process may also take time. Yet, the chances of getting the right talent are very low.
- Hiring offshore developers takes no time. You can increase the number of developers on your offshore project by simply asking the company for the right talent. They will connect you with highly skilled and pre-vetted experts. You can collaborate and decide on the right expert. Suppose you don’t find the talent fit for the job, you can easily go for another option without worrying about anything.
Similarly, when you need to scale down the team. You simply need to inform, close the deal according to the contract. But with an in-house team, it takes time to complete legal formalities and more.
This is how you can scale up and down the team with an offshore development company easily, without any hassle.
4. Round-the-Clock Development to Boost Productivity
Tap to market first can cause a significant difference. Businesses that choose offshore development can speed up the development process and gain a competitive edge over their competitors by tapping into the market first.
Businesses with different time zones can leverage the benefits of a 24/7 development cycle.
In addition, relying solely on in-house teams can slow down development due to several reasons, such as a lengthy hiring process, limited resources, lack of expertise, and more. However, an Offshore software development team can help you overcome these challenges by eliminating them.
Scale Your Software Development Team Easily with Us
What are the Challenges of Choosing Offshore Development Services?
Everything that comes with some benefits brings some challenges as well. Similarly, you can also encounter a few challenges or barriers when hiring an offshore development company. Let’s explore them below that you might face:
1. Finding the Right Offshore Partner
A very common challenge is finding the right offshore software development partner. Most of the companies or businesses made mistakes in choosing the development partner which later caused project failure or delays.
Solutions:
- Follow the right steps when selecting an offshore partner.
- Don’t always choose the cost-effective services provider.
- Check portfolio, clientele, case studies, reviews and ratings on popular platforms.
- Start with a small or test project before committing to a big deal. This will help you eliminate the chances of a big loss.
2. Real-time Collaboration and Communication Barrier
When you hire an offshore partner means you deal with professionals working in a different time zone and are far away from your locality. Therefore, you might face difficulty when collaborating in real-time. In addition, due to different cultural backgrounds and languages, the communication gap is also a challenge.
Solution:
- You can establish clear communication through video conferencing, instant messaging and through other effective mediums.
- These types of tools and technologies help you connect immediately and foster real-time collaboration.
- You can properly plan your meetings and discussions to avoid delays or interruptions.
- Find an offshore development partner compatible with your culture and who can speak your language or is particularly fluent in English, which is common to all.
- Avoid using typical languages; use translation tools such as Google Translate.
3. Difficulty in Ensuring the Quality
Quality control can be a concern when working with an offshore development partner. The final deliverables can not be up to the mark due to a lack of communication, misunderstandings, unclear projects and several other reasons.
Solution:
- Clearly define project needs, goals and other requirements to avoid misunderstandings.
- Keep taking regular updates on the project progress.
- Rigorous testing is required; you can use several tools to do so.
- Keep communicating with stakeholders regularly and discuss quality parameters.
4. Lack of Control Over the Project
When dealing with offshore software development companies, you rely on third-party services and you are not physically present. Therefore, it is hard to get complete control over the project when not dealing in person directly.
Solution:
- Find a reputed and trusted offshore development partner.
- Utilize project management tools to track progress, manage tasks and monitor improvements.
- Establish a clear and daily reporting structure on project progress to foster transparency.
Who Should Hire an Offshore Development Partner?
When it comes to answering the question of who should hire the offshore development partner, the simple answer is that anyone with development needs can hire. Today, businesses of all sizes are hiring offshore developers, from startups to enterprise-level.
In addition, there are a large number of companies and businesses worldwide looking for an offshore digital partner or development company. A few of them are looking for specialized skills, a few are minimizing development cost and others are engaging to focus on other than development. There are several reasons to hire an offshore development company. However, let’s introduce who should hire offshore development companies.
- Companies seeking specialized skills: Sometimes it becomes difficult to find the right professional from the local talent. It’s also one of the reasons why companies or businesses approach an offshore development partner to access specialized skills that are difficult to find locally.
- Companies need to scale teams quickly: You can leverage the benefits of instant recruitment when connecting with an offshore software development company. They provide options to hire developers immediately and let you scale your team according to your development needs.
- Companies want to reduce development costs: Cost efficiency is one of the significant advantages of hiring offshore software developers. Especially, companies or businesses in Western countries can reap the benefits of outsourcing development to offshore IT Partners where the development cost is lower than in the West.
- Companies focusing on core competencies: Hiring an offshore software development company lets businesses eliminate the hassle of hiring and focus on other growth areas. They can simply approach the offshore partner and onboard the specialized experts in a few steps.
Unlike in-house hiring, there is no need to conduct multiple interview rounds or several skill tests. These offshore developers from a reputable IT company are pre-vetted and can handle all your development-related tasks efficiently.
- Companies looking for round-the-clock development: An Offshore software development company with a different time zone enables a continuous development cycle. Suppose a company in the US recruited an Indian offshore development partner to collaboratively work with them on a project. Once the team in the US stops working or goes offline, the Indian developers can start working, leading to round-the-clock-development. They can help businesses introduce solutions faster into the market by completing development in the least possible time.
Looking for the Best Offshore Software Development Company?
Popular Offshore Development Trends in 2025
From startups to established businesses, top global companies offshore their projects. Businesses are focusing on improving technologies, adopting trends to grow and more. Let’s take a look at the top trends in the offshore industries.
1. AI and Automation
Offshore software development companies are increasingly adopting AI-powered solutions and tools to streamline tasks, accelerate the development cycle, automate processes and more. The innovation also minimizes the time often needed for bug identification, code testing and quick resolution.
2. Hybrid Outsourcing
Instead of outsourcing the entire project, companies are increasingly focusing on the hybrid model, which involves combining their in-house team with an offshore development partner. In this way, they are able to achieve their goals of accessing specialized talent, saving costs, increasing productivity and gaining greater control over the project.
3. Cybersecurity and Data Protection
The rise in cyberattacks and data breaches has increased the demand for offshore partners who are cybersecurity experts. A significant percentage of companies are outsourcing cybersecurity to protect their sensitive data. They help implement robust data security measures such as data encryption, multi-factor authentication, network security, strict access control, and secure coding practices.
4. Specialized Skills and Emerging Technologies
Companies are widely looking for an offshore partner having expertise in advanced technologies. Therefore, development companies are focusing on emerging technologies such as AI, ML, cybersecurity, blockchain, cloud-native and more.
How to Choose the Right Offshore Software Development Company?
Recruiting an offshore software development company is an excellent approach to the development if you are one of the businesses who is looking for specialized skills, cost-effectiveness, fast time-to-market, scalability, and more.
However, the recruiting required proper planning, clear communication, better understanding and the right steps to choose the right offshore software development company. Let’s consider what you should consider when hiring.
1. Define Development Needs
Understanding the project needs and goals is critical before you begin your search for an offshore software development company. It further helps you find the right talent with expertise and experience. In addition, you can decide on the necessary features, functionality, deliverables, resources, budget and several more.
2. Find the Best Offshore Software Development Partner
Once you have finalized defining your requirements, the next step is to conduct a thorough research to look for offshore software development companies. During this period, you will interact with several companies. Shortlist and finalize that you find the best fit for your project. However, finding the best requires several considerations; let’s explore them below.
Key Considerations when Selecting an Offshore Development Company:
- Expertise and Skills: Evaluate expertise, programming language proficiency and experience of the developers you are hiring.
- Budget: Confirm whether the offshore software development partner is fit for the budget or not.
- Time Zone Differences: The time zone difference will work or not.
- Trust Factors: You can check the portfolio, case studies and reviews to know whether they have worked on similar projects, their project history, quality of deliverables, client satisfaction and more.
- Soft Skills: Look for the important soft skills such as communication skills, the Ability to collaborate, time management abilities, critical thinking and problem-solving abilities.
- Cultural Fit: Cultural fit helps both parties avoid misunderstandings by fostering better communication, collaboration and work practices.
3. Decide on Engagement Model:
After you have decided on the offshore development company, the next step is to decide on the engagement model. Choosing the right engagement model is as important as finding the right offshore development company.
Data says that a significant percentage of companies hamper their productivity and pay extra due to selecting the wrong engagement model. Therefore, always choose the model that best fits your development needs.
Popular Engagement Model for Hiring an Offshore Software Development Company:
- Project-based Engagement Model: In this engagement model, businesses hire offshore development companies for the entire project based on goals and deliverables.
- Time and Material-Based Engagement Model: Unlike the project-based development model cost is not fixed. Recruiters pay the offshore software development company according to the time and materials utilized from ideation to deploying the final project.
- Hiring a Dedicated Team: A dedicated team-based engagement model is when businesses hire a team of experts who exclusively work on a project for an extended period. The payment in this model is mostly decided on a monthly basis. A dedicated development team offers similar flexibility to the in-house team, like a full-time employee.
However, what makes the offshore software development team more reliable and a preferred choice is its flexibility with scalability and expertise in diverse industries.
4. Documentation and Contract Signing
Once you are finished with all the above-suggested findings and tips, the next step is documentation and contract signing. Proper documentation is paramount. It helps both parties ensure a smooth transition throughout the development process.
Don’t forget to mention a single detail or argument that you have mutually discussed and agreed on.
Documentation will always be different based on the engagement model, project goal, deliverables, timeline, advance payment, installments and many more. Therefore, your careful consideration is required when making a contract.
5. Start with a Small Project
If you are looking for a long-term relationship and you have a big project to achieve. It is recommended to start your journey with a small project so that you can analyze your expertise, quality of work, collaboration ability, time management skills, and many more. This will further assure you whether the company can meet the requirements or not.
Alongside, keep monitoring project progress, be in touch with the stakeholders, keep taking regular updates and more to avoid further misunderstanding and gaps.
FATbit Technologies, Your Trusted Offshore Software Development Partner
Are you ready to accelerate your software development? Looking for a cost-effective development option? Want to access global talent? You can achieve them all even more by partnering with the right offshore software development company.
FATbit Technologies is one of the leading offshore software development companies in India. We craft high-quality digital solutions and partner with global businesses to help them drive success. When you look for the most reliable, affordable and trusted offshore partner, FATbit Technologies becomes the most preferred choice.
We at FATbit cater to diverse development needs. We have highly skilled experts who are proficient in the latest tech stacks and can handle unique development requirements, making the company a one-stop destination in the IT industry.
FATbit prioritizes vision, hence helps businesses craft tailor-made solutions that can deliver exceptional results. We have been serving the industry since 2004. It has been more than two decades, itself a statement of delivering the best for a long time.
Our Offshore Development Services Include:
- Custom Software Development
- eCommerce Development
- Agile Software Development
- Mobile Application Development
- UX/UI Development
- MVP Development
- CMS and CRM Development
- Data Management Solutions and more
Hire the Right Tech Expert for Your Project
Conclusion
There are a large number of offshore software development companies available worldwide. Finding the right partner for your project can be a challenge. However, in the above blog, you have gone through all the key considerations and steps to find the best partner.
In addition, by understanding the role of offshore development partners, including benefits, challenges and trends, you can now make an informed decision.
FATbit Technologies is the right offshore software development company where you can avail complete services from ideation to implementing the final product. The company takes charge of delivering excellence at every stage.
FAQs
Q 1. Why hire an offshore software development company from India?
Ans. India has a large pool of developers who are highly skilled and proficient in the latest technologies. Businesses across the globe are approaching Indian developers for their unique and complex development needs.
In addition to the large pool of talented developers, the salary of these experts is significantly lower than in any other Western country which is also an attractive reason to recruit Indian IT services providers. Cultural compatibility, language proficiency, and critical thinking abilities are also considerable.
Q 2. Is offshore outsourcing better than nearshore?
Ans. Saying which one of these approaches, between offshore and nearshore, is better requires several considerations and insights.
Offshore outsourcing is quite popular these days. Businesses are outsourcing their project to offshore partners in large numbers and getting valuable outcomes.
Q 3. What is the primary difference between offshore, nearshore and onshore development services?
Ans. The primary goal of all three services, including offshore, nearshore or onshore, is to achieve development objectives. However, they may be different in terms of cost, scalability options, pool of experts, and others. In addition, geographical locations are also different.
- In an onshore hiring model, businesses hire developers or companies within the same country.
- In the nearshore, experts are recruited from the nearby countries, often with a similar time zone and culture.
- In the offshore hiring model, businesses or companies approach countries far away with different time zones and cultures.
