IT Outsourcing in Europe: Software Development Cost by Region

Companies have many reasons for outsourcing in Europe. Namely, affordable offshore development rates, many talented professionals, low taxes, a large number of companies on the market, etc. We will focus on the three most common reasons companies outsource over traditional in-house teams.

There may be plenty of top-rated developers in your country ready to build a first-class app. But what's the point if their services are unaffordable? You’ll have to make do with one solution – web or mobile – or look for more investments.

But outsourced web development (or a mobile one) would be the most reasonable option for most companies. For example, the European outsourcing market offers much more affordable hourly rates than the US, Australia, or Canada.

It doesn't even matter if you live in a million-person city – the competition in the IT market is pretty high, so be prepared to spend some time looking for the right candidate. Actually, the hunt for qualified software developers may last for months. Outsourcing comes to the rescue when you need to find developers in a few days.

In case your team's already working on a high-stakes project but you'd want to take up other applications, outsourcing seems to be the best option. Another case is when there's a lack of qualified programmers to work on your main product, and you're losing money because of missing features or bugs. Time matters, and when it does, you can’t afford to spend months on staffing the team.

Now, let's find out what options we have on the European outsourcing market and what prices it offers.

Europe IT outsourcing sector is constantly growing in number, which makes it an attractive offshoring destination. According to Clutch, currently, there are 3,016 firms that specialize in software development in this region. 913 IT firms are based in Ukraine, 1064 in Poland, and 112 in the Czech Republic, not to mention other countries.

Developers from Ukraine, Poland, the Czech Republic, and other European countries are well-educated and have good English and advanced programming skills. For instance, Digital News research shows that Ukraine has more than 38,000 graduates with technical degrees annually. The index of English proficiency in Eastern European countries is also high enough. And the demand for European developers grows in parallel with the number of qualified software developers.

These benefits of IT outsourcing in Eastern Europe are also accompanied by moderate market costs. On average, software development rates in such countries as Ukraine, Hungary, Romania, Bulgaria, and Moldova vary from $25 to $49 per hour. Depending on the country, the level of developer expertise, and the project complexity, the cost may be above $99/h. Still, if you choose an offshoring model or turn to junior software developers, the rate will be no more than $18/h.

As for Poland, the Czech Republic, and Slovakia, their cost of IT services is twice as high. Programmers in these countries charge $50 - $99 per hour.

Thus, we can say that average IT service rates in Eastern Europe vary from $25 to $74 per hour.

You were not mistaken if you assumed that the average hourly rate for IT services here is relatively high. Western and Central Europe comprises developed countries with large economies and high taxes. In turn, a high standard of living generates high prices, and IT services aren’t an exception. Finally, it results in high wages for local developers, directly contradicting clients' expectations.

The price range of Central and Western Europe IT outsourcing is wide – from $37-50 up to $200-300 per hour of work. Prices in Germany, Netherlands, Switzerland, and the UK are at $50 - $99/hr, although in Switzerland, they may reach up to $200 - $300/hr, which is the highest hourly rate in the region.

In Austria and Belgium, IT service costs are twice as high. The most common range is $100 - $149 per hour. We can thus say that the average custom software development rates in these regions are close to $68 - $99 per working hour.

Northern European countries are rich in outsourcing companies. At the same time, they are characterized by a relatively wide range of prices. Here everyone can find a region with an acceptable pricing policy.

Scandinavia is associated with a decent quality of life, personal freedom, and high wages. And we can use this description to partially characterize their IT pricing models. It’s a comparatively small but still expensive European outsourcing market.

The most expensive countries are Denmark and Finland. Developers there charge no less than $50 - $99/hr, and their prices often go up to $150 - $199/hr.

Norway and Sweden are more moderate when deciding how much to charge for IT services. An hour of software developers' time in these countries will cost about $50 - $99/hr. The highest rates end at $100 - $149/hr.

This way, we can call Scandinavia the most expensive region regarding IT services pricing. The average software engineering cost is $50 - $174 per working hour. If you want to spend less money without losing software quality, examine the Baltic countries.

The Baltic states are perhaps the most dynamic region in the post-Soviet space. They have a large number of startups, favorable economic conditions, and lots of successful projects (for instance, Skype and Taxify were developed by the Estonians). On the other hand, statistics show that the IT services price list on Clutch and GoodFirms doesn't differ much from the countries of the CEE region.

In Latvia, the average rate goes up to $50 - $99/hr. Still, several IT firms provide services for $25 - $49/hr or even less than $25. Lithuania shows more restrained appetites – their prices are close to IT outsourcing in Eastern Europe and are $25 - $49/hr. In Vilnius, though, the rates may reach up to $99 per working hour.

As for Estonia, which is a Northern European IT hub, rates also start from $25 - $49/hr and reach up to $50 - $99/hr. Thus, it could be the best choice for you.

The average IT services cost in the Baltics region is close to $35-$49 per hour.

Sure, this area differs from Eastern European outsourcing and other regions with a lower number of IT companies. But our analysis shows that developers from Croatia, Greece, Serbia, and Slovenia are ready to work for a relatively low average hourly rate. IT services costs per hour in this region are quite different since we have included both prosperous Croatia and Slovenia, as well as Greece and Serbia, whose economic situation is hardly satisfying.

Hourly rates in Croatia start from $37 - $74/hr and reach up to $100 - $149/hr (Zagreb). Slovenia offers the same price range. As for Greece and Serbia, prices here are correspondingly lower.

IT firms based in Greece charge $25 or less per working hour. The biggers rate you'll see is often no more than $49/hr. Serbia is in a similar situation, estimating the cost for IT services at $25 - $49 / hr. The average price for software development in the Balkans is about $28-$37 per hour.

By the way, the percent of "less than $25" IT service pricing is bigger than in any Central European country. This means Balkans are also an excellent choice if you're on a low budget.

Sure, IT services rates per hour plays a vital role when you're choosing the right offshore software development company. But it doesn't mean everything. Same with choosing an offshore team of developers. That’s why experienced vendors pay attention to the following points:

• Financial attractiveness of the project
• Availability of required developers
• Communication means
• Business environment
• Taxes and benefits policies
• Correlation between quality of services and cost

Besides, keep in mind public holidays and minimum annual leave. If you're dealing with tight time-frames, checking these details is one of the first things to do.

Finally, make sure to check the working conditions and labor laws in the selected country. Sometimes their terms make turning to software development companies in Europe more expensive than hiring local engineers. So choose wisely.

Most outsourcing European companies adhere to the standard workflow. It consists of several sequential steps, namely:

Step 1. First contact

It all starts when you choose a software vendor and leave a request on their website. Then, you are contacted by a personal manager, with whom you discuss the project in general terms.

Step 2. Solution Design

At this stage, you schedule a meeting with your vendor to discuss the project in detail. At Cleveroad, we hold a special Solution Design Workshop, during which our team consisting of business analysts (BAs), a solution architect (SA), and a designer, works on your requirements. Specialists define business goals, a work scope, basic quality attributes, etc. Based on the processed information, experts provide you with a rough estimate, team composition, and a timeline; next, our team forms a proposal.

Step 3. Discovery Phase

This phase turns all project requirements into a clear plan. All the previously defined details are fleshed out, starting from the platforms you want to cover to the integration of third-party services, etc. As a result of Discovery, you get the following documents:

• Feature Breakdown List
• Design concept
• UX map
• Quality attributes
• Impact map
• Flowcharts, etc You will also get a detailed estimate of the time and cost of software development.

Step 4. Development and Quality Assurance

When you have approved all the documents, they pass to the development team. The software is created in several sprints; the project manager puts a particular module of the future application on each sprint. You can fully control the entire process and make changes if necessary. Also, each sprint is accompanied by software testing. Upon completing all the stages of development, the QA team performs the regression testing. They run tests on all platforms and all features and, if requested, perform stress testing.

Step 5. Release

When your software is completely ready, it can be launched. The Cleveroad team always helps clients at this stage. So, if it's a mobile app, we'll release it on AppStore or Google Play. In the case of a web product, the team moves it to the live server on the release day. Along with the finished product, you also get the following documents:

• Specifications
• Source code
• Design details
• Project Plan, etc.

Step 6. Support and Maintenance

Once the product is launched, the cooperation with the software vendor continues. You can develop and improve the project, including updating it for new OS versions and adding new features.

Cleveroad is a specialized IT outsourcing company. Since 2011, we've been assisting various-sized businesses in acquiring cutting-edge technologies and bespoke software solutions in multiple domains, including FinTech, Healthcare, Logistics software development, Retail, Education, Media, and other business areas.

Our software developers pass several interview stages and constantly improve their skills by sharing knowledge with teammates, visiting special conferences, etc.

By cooperating with Cleveroad, you'll get a wide range of benefits, for example:

• Wide scope of IT outsourcing services, including app development from scratch, IT managed services, cloud app deployment, application modernization services, and much more.
• Custom software development expertise across multiple domains
• Flexible partnership models: a dedicated team, fixed workscope, time & materials.
• A team of certified, security-oriented professionals to guarantee the quality of provided services.
• On-demand services: building software from scratch, cloud app development, data migration, and more.
• Personalized project calculation from our Sales team, with no hidden costs or fees.
• We follow the best app development practices to provide clients with high-grade products in the shortest time.

Our outsourcing workflow is established at all stages, with guarantees provided. We are ready for long-lasting and practical cooperation with you, so let’s start gaining the advantages of outsourcing IT services with our experienced software development specialists.

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