Software Development Outsourcing Predicted to Grow 70% by 2023

Software development is an increasingly important part of business across a variety of industries, to the extent that fewer companies can meet all their IT needs with their permanent staff. Instead, many are outsourcing their software needs to specialists around the world, saving time and money compared to doing the project in-house.

Recent reports have estimated that there will be a 70% growth in software development outsourcing throughout this year and the next. One reason for this is that scaling up an in-house team can be a slow process, with training new hires, assigning company resources, and integrating new duties into an existing workflow all being challenging elements of a rapid upscaling. By hiring a software outsourcing company, the development team can be scaled up quickly and easily. Because an outsourced team is pre-vetted and trained, it also saves time and costs from an HR perspective.

Statistics

Statistica reports that global IT outsourcing is currently valued at 66.5 Billion USD, over two-thirds of the total outsourcing market value worldwide, which is 92.5 Billion USD.

Krusche Company released data detailing how IT/software outsourcing had grown from just a 22% global market share in 2020, extrapolating that it would reach 25% by 2025.

IT Service Market compare The same report also showed that 34% of companies are adapting their strategies to incorporate outsourcing companies for app development projects, with only 9% intending to keep app development in-house.

Outsourcing Trend App development survey results. / c. Krusche Company.

These statistics support the conclusion of the Commit Survey that development outsourcing should grow by 70% in 2023. This growth is driven by demand for AI and machine learning development, cross-platform app development (web and mobile), cloud infrastructure, and cybersecurity infrastructure. All these different types of projects require specialized knowledge, and businesses are turning to experienced developers to keep up with these accelerating tech trends.

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