Software outsourcing is a response to the challenges posed by the modern and technologically developing world. In order to keep pace with the competition and build an advantage over it, and at the same time optimize costs, more and more companies are choosing the recently popular solution – creating and maintaining infrastructure and software outside their own structure.
Software development outsourcing is a great way to build your own business applications without having to build and maintain developers, IT departments, UX designers, and project managers. Everything indicates that the software outsourcing market will not stop growing next year. On the contrary – it will develop very dynamically. What trends in software outsourcing can we expect in 2021?
Why do companies outsource software development?
According to the Global Industry Analytics report, the value of IT services commissioned by companies to external suppliers may exceed $ 220 billion by the end of 2020 and the value of this market is expected to grow by about 5% each year in the years 2020-2024. What is the cause of the increasing outsourcing of software development to external suppliers? There are many reasons – the most common one is its effectiveness. Ready software is designed and delivered according to all customer guidelines. Other reasons include:
- lack of internal resources and know-how necessary to develop in-house software;
- willingness to increase business flexibility;
- long process of creating internal structures;
- the need to transfer key employees to more strategic business areas, as well as a relatively high employee turnover in IT.
There are many advantages of software outsourcing. We need to mention the possibility of the company entering the global market – software development can be outsourced to a company whose headquarter is located on the other side of the world, thanks to which it is possible to find a partner that not only fits in terms of technology, but also ensures an appropriate price-quality ratio. Business diversification is also easier, and thanks to outsourcing the products themselves can also be transferred to the digital world, which may be the beginning of the digital transformation. In 2020, the most frequently commissioned tasks in the field of software development included application development, as well as their management, IT security and all system and R&D implementations.
What trends in software outsourcing can we expect in 2021?
2020 brought many surprises. The pandemic, restrictions, remote work and the development of dedicated tools have also caused changes in the world of software development. It can therefore be assumed that they will also have an impact on what will happen on the software outsourcing market next year. So, what can we expect in 2021?
Cloud as a must-have
This year, a record number of enterprises moved their data to the cloud. According to a report prepared by Gartner, companies will spend around one trillion dollars on the development of cloud infrastructure by the end of this year. Data in the cloud means not only access to the most innovative technology and data security, but also cost optimization – there is no need to expand your own resources, which makes IT service much cheaper. 2020 was one of the most important years for building and implementing cloud strategy in many companies. In 2021, the demand for suppliers of this type of solutions will be as high as this year, however, companies will pay increased attention to privacy, data security and identity. The most popular cloud solutions, such as AWS or Azure, already offer a wide range of products, including Big Data and Data Analytics tools, IoT integration, automation and containerization of processes, and data migration. Services related to entering AI and ML have also become key ones.
Further development of artificial intelligence
2020 definitely can be named “data-driven”. However, let’s get ready for the fact that the next year will be “AI-driven”, and more and more entities will see business success in the development of artificial intelligence. The implementation of AI tools by external companies as part of software development outsourcing is already underway. Artificial intelligence, among others thanks to the cloud, has become something tangible, like a set of specific tools, for many companies and in 2021 it will grow even faster. PwC estimates that the impact of AI on the global economy may exceed $ 15 trillion by 2030, so we can expect IT solutions to be increasingly searched for and more innovative.
Companies that will be able to provide tools for process automation will be key ones in outsourcing software development. Artificial intelligence is used in an increasing number of internal areas, therefore outsourcing service providers who will be able to implement and automate these processes will be particularly desired. An example is the e-commerce industry – in 2020, the effect of the pandemic was, among other things, a significant increase in online sales transactions. It also affected 65+ customers. AI together with IoT (Internet of Things) entered the world of online shopping to personalize the shopping path, from searching for the right product to paying for the transaction.
As a complement to AI, RPA, i.e. Robotic Process Automation, is also playing an increasingly important role. Robotic automation of business processes is, in short, the use of software robots that can perform repetitive activities in many branches of business in a fully automated manner. RPA projects are already being carried out by more and more companies, including the Stepwise SLS project.
When talking about IT, it is impossible not to mention the development of NLP or reinforcement learning, as well as open-source frameworks, which, as a counterbalance to big players and corporations, constitute an absolute future and may be what will multiply the scale of IT solutions in many business areas.
Both native applications and the development of Progressive Web Apps are constantly on top
Native applications are those created for a specific mobile platform, i.e. for iOS or Android. This means that for each of them, i.e. a specific operating system, the same application must be written in a different programming language. For Android, it’s usually Java and Kotlin, and for iOS, Swift and Objective-C. Due to the necessity to develop a native application for each platform separately, the project usually requires a separate development team, which makes native applications the most often outsourced for development.
Considering how fast the number of smartphone users to make purchases, bank transfers, communication and all lifestyle activities is growing, the demand for native applications will grow dynamically. The advantage of native applications over web and hybrid ones also makes an impact – they are faster and more efficient, better support built-in functions (such as push notifications), have a more adapted user experience, as well as a clearer code structure. Additionally, they use modern languages such as Swift or Kotlin, which can be developed very easily.
Progressive Web Apps, i.e. applications that use the most innovative network solutions in order to provide users with an impression almost identical to a dedicated mobile application, play an increasingly important role. Among the technologies that play the greatest role in creating applications for all mobile devices at the same time, Flutter proposed by Google is taking the lead.
Which programming languages will be the most wanted?
When it comes to software outsourcing, 2021 will also bring a change in the most sought-after technologies. Interestingly, more and more experts predict the enormous popularity of Rust – a language that already in 2020 drew attention of many giants, including Microsoft and Intel. Currently, more and more companies implement Rust technologies in their solutions and very often do it as part of software development outsourcing. Rust is considered by the IT community to be a relatively simple language, very safe and, additionally, “pleasant”.
When studying the trends for 2021, it is also worth paying attention to the very well-coordinated trio – Kotlin, Java and Scala. Java is still one of the most-chosen solutions, and Kotlin and Scala rely on the Java virtual machine. In addition to the languages already mentioned, specialists also point to Python, TypeScript and Flutter as the best option for applications on more than one platform.
Security above all else
It is not surprising that from year to year the external services aimed at ensuring the security of corporate networks and critical data are becoming more and more popular. At a time when cybercrime is costing global economies three times more than natural disasters, data security requirements and restrictions continue to rise. It will be no different in 2021. Software outsourcing awaits great changes, aimed at adapting software development to the most current requirements. There is more and more talk about the new reality of limited trust – Zero Trust, i.e. granting all access only to authorized users and data packages only after trust has been built and the level of risk prevention established.
Eastern Europe – the most desired destination for software outsourcing
According to the report “Software Development in Ukraine, Poland, Belarus and Romania in 2019”, Eastern Europe is becoming an increasingly attractive location for outsourcing services for countries that account for 70% of the global demand for software outsourcing (the United States and Western Europe). Highly qualified specialists, knowledge and experience as well as competitive prices mean that companies increasingly outsource software development to Eastern European entities, instead of those located in India, Brazil or South Africa. An additional benefit of this trend are changes in legislation in countries to which business activities are transferred for software development outsourcing – e.g. Belarus legalized blockchain-based companies three years ago.
IoT is no longer a technology from the distant future
The growth of the IoT market continues and it looks like the upward trend will continue to develop even faster. Especially because 5G technology in Europe is now available to almost everyone. Smart homes are nothing innovative – entire smart buildings are appearing.
Data engineering as the most desired profession in the coming years
If a company wants to build a business globally and constantly develop, data engineering is a key area. It is data engineers who are responsible for the preparation of the entire Data Pipelines and their implementation in technologies. Moreover, there are Compute Engine virtual machines and data modeling, and additionally, a huge emphasis on the data itself – access to the best-prepared data, which already proves the competitive advantage of companies, because it enables real-time creation of conclusions and immediate response.
In 2021, software outsourcing will primarily be a continuation of the development of trends that began this year. At Stepwise, we try to learn from them as much as possible every day, primarily to offer our customers even more competitive services. For this purpose, we have created an internal R&D department, which enables us to implement the above-mentioned issues faster. From the very beginning, many of our activities and processes are based on the cloud and we grow along with the development of GCP. This way we can successfully operate in a market dominated by corporations and at the same time provide competitive services.