Is India the biggest Software outsourcing giant still?

June 18, 2021

Asia is the biggest technology giant, there’s no doubt about it. The best cell phones, computers, cars and all kinds of electronic devices almost always come from Asian countries, everyone knows that.

So, it makes sense that India is recognized worldwide as the biggest software outsourcing giant to date, getting the very first spot on the Keamy Global Services Location Index back in 2017.

However, with latin america software outsourcing rising up day after day, and nearshore software development becoming more and more common, we have to sit down and think: Is India the biggest software outsourcing destination still? Is offshore software development in India as famous as people make it seem? Let’s take a look.

A deeper look into India’s IT services

The IT market in India has always been a success, being recognized worldwide for the amount of software developers and software outsourcing companies that you can find in the region.

Actually, according to a study made by Statista, the outsourcing market in this country is so incredibly big, it represented an 8% of the Nation’s overall income during 2013, and it hasn’t stop growing ever since.

Also, the study showed that the IT industry is labeled as the fifth biggest industry in all of India, with an exponential growth throughout the years, peaking during 2014 and 2015 and making over 61 billion USD only in 2016.

Judging by the numbers, the technology market in India is huge, yes, but what about the software outsourcing market on its own? What does the statistics and numbers have to say about it? Well, you might be surprised.

Although reports such as the 2017 A.T Keamy global services location index position India as the biggest digital Nation, the truth might be this country might be on the breach of experience a great fall regarding their offshore software development services.

The truth about outsourcing to India

The reason why India became such a popular outsourcing destination is quite simple, they offered software outsourcing services for a really low costs, something other countries simply didn’t afford before.

You could hire a whole offshore software development team from India and not pay even the half of what you would normally pay for a software in any other country, specially not in the US.

This, of course, represented a major advantage for companies that needed a software solution created quickñy, but didn’t have the resources to hire someone from their own country.

However, with the rise of more and more software outsourcing companies in India, the prices have gone even lower, these companies are taking even more people, and the market has significantly lower their quality, resulting in a huge stepback for such a huge industry.

A vivid and resent example of this is the experience of Rebekah Campbell, a New York’s reporter who outsourced a software development process to an Indian company, and what got in return was nothing like she expected.

What she got was a poorly delivered, generic software application that didn’t meet her specifications at all, wasting her time, and money, on a software solution that didn’t meet the standards.

This is extremely interesting, especially when you consider an study made by the HuffPost about Indian Outsourcing, and how the death of this industry was pretty much set to happen since 2008.

The truth is, low costs India has to offer is actually harming them and jeopardizing their whole industry. More and more offshore software development companies keep on offering services they cannot meet and keep on making other companies from all over the world lose time and money.

Of course, the growth of Latin america software outsourcing has deeply influential the fall of the Indian mega industry. As countries such as Panama, Mexico and Brazil keep evolving and become the top nearshore software development destinations, the reign of the Indian nation is slowly, but surely coming to an end.

So, what is going to happen?

The future is pretty clear when it comes to what is going to happen in the IT services market, especially in the outsourcing industry, and it’s pretty simple: Nearshore software development will become more popular than offshore.

Like we said, this is related to the fact software outsourcing in latin america is growing by the minute, and more companies prefer to pay a little bit more to get their software solutions done right, than spending less money but end up with poorly made web or mobile applications.

As a matter of fact, we have a full on report on software outsourcing in latin america, the top nearshore software development destinations, and countries on the rise when it comes to IT services and solutions you should definitely check out.

To sum things up, yes, India represented a great, strong and powerful outsourcing destination for the past ten years, but their downfall is iminent, and there’s no point in denying that.