11 Must-Know Offshore Software Development Statistics To Shape Your Strategy in 2025

Offshore software development allows businesses to connect with exceptional talent, reduce costs, and adapt to the ever-changing tech industry. But deciding if it’s the right fit for your company isn’t just about intuition—it’s about understanding the numbers. 

Offshore software development statistics go beyond mere figures. They serve as practical tools to uncover opportunities and take meaningful action.

These statistics can help shape a strong outsourcing approach. They shed light on trends in market growth, regional strengths, and the benefits of accessing global expertise.

In this article, we’ll unpack the essential offshore software development statistics you should know.

Whether you’re exploring outsourcing for the first time or refining your current strategy, these insights can help you make informed, confident choices for the year ahead.

Offshore Software Development Market Size and Forecast

The offshore software development market is expanding rapidly, reflecting businesses’ increasing reliance on outsourcing to optimize budgets and access specialized skills. 

In 2024, the market size was valued at 122 billion and is projected to reach 283 billion by 2031, growing at a compound annual growth rate (CAGR) of 10.13%. 

This growth highlights how essential outsourcing has become for companies navigating digital transformation and operational scaling.

A rapidly expanding global market

North America remains a dominant player in offshore software and IT development, capturing more than 38.5% of the global market in 2023, with revenues of $46.2 billion.

Its dominance is supported by a robust technological infrastructure and heavy investment in offshore teams to address skill shortages and enhance productivity. 

This expansion is driven by cloud computing, the push for 24/7 productivity, and the cost advantages of outsourcing.

According to Grand View Research, the enterprise software market in Latin America generated $14,093.7 million in revenue in 2024. This region shows significant promise as a nearshore outsourcing hub due to its proximity to the US, cultural alignment, and growing IT talent pool. 

The Latin American market is projected to grow at a CAGR of 12.7% from 2025 to 2030, with enterprise resource planning (ERP) software leading as the largest revenue generator in 2024.

Key drivers and regional highlights

Cost efficiency is one of the primary drivers for offshore software development. On-site software development can cost up to 60% more than offshore development, making the latter an attractive option for businesses.

Furthermore, outsourcing provides access to specialized technical skills that are increasingly scarce in local markets.

Asia continues to lead as a hub for offshore development, with India, the Philippines, and Malaysia offering competitive labor costs and extensive IT talent pools.

India alone had over 5.8 million developers in 2021, solidifying its position as a top outsourcing destination.

Latin America also remains a strong contender, balancing affordability and technical expertise. Countries like Mexico, Argentina, and Brazil have become hotspots for software development.

11 Offshore Software Development Statistics You Should Know in 2025

Offshore software development isn’t just a passing trend—it’s a well-established strategy transforming how businesses operate and compete globally. 

If you’re looking to refine your approach this year, here are 11 must-know statistics to guide your decisions in 2025.

1. 80% of executives are planning to maintain or increase their outsourcing

According to Deloitte’s latest Global Outsourcing Survey, “80% of executives are planning to maintain or increase investment in third-party outsourcing.” While this speaks to outsourcing in general and not just for software development, it indicates that using third-party services is a tried and tested strategy that is only going to increase. 

2. Improved access to talent is driving the need to outsource

Number 2 is from the same Deloitte survey from above.

Interestingly, cost savings was not the primary motivation of the survey respondents driving the need to outsource—“improved access to talent” was. 

This is something we have seen from our own clients time and time again. Companies are struggling to find the talent they need locally, and expanding their search to offshore locations overcomes this challenge. 

3. Large enterprises lead the charge

Big companies dominate offshore software development, holding 59.4% of the market share. This dominance underscores their heavy reliance on outsourcing to scale operations, cut costs, and access specialized expertise for complex projects. 

For smaller businesses, this highlights how offshore development can level the playing field and enhance competitiveness.

4. Two-thirds of US companies outsource at least one function

Outsourcing isn’t just for IT; it’s becoming a cornerstone of business strategy. About 66% of US companies outsource at least one department, proving how external partnerships can bring flexibility, cost savings, and niche expertise. 

Software development is one area where this trend will continue to thrive.

5. Cloud-based outsourcing set to hit $141.2 billion by 2027

Cloud-based outsourcing is on a meteoric rise, with the market expected to grow to $141.2 billion by 2027. This trend shows how businesses are leveraging the cloud to scale operations, streamline workflows, and reduce infrastructure costs. 

Companies planning digital transformation should prioritize partners with strong cloud expertise.

6. Nearshoring will add $78 billion to Latin America’s exports

Nearshore outsourcing is booming in Latin America and is projected to contribute $78 billion to the region’s export sector.

For US businesses, the proximity, cultural alignment, and skilled labor pool in this region make it an increasingly appealing option for outsourcing software development.

The LatAm software industry is thriving, and the region is gaining recognition for its growing focus on emerging technologies like artificial intelligence, blockchain, and cloud computing, making its talent pool particularly attractive for innovative projects. 

This combination of skills and forward-looking expertise positions Latin America as a key player in the global software development outsourcing market.

7. The BFSI sector drives 24.3% of offshore development

The banking, financial services, and insurance (BFSI) sector accounts for 24.3% of offshore development. 

With its high standards for security, compliance, and innovation, BFSI’s heavy reliance on outsourcing serves as a strong endorsement for other industries considering offshore teams.

8. 87% of IT companies favor nearshore outsourcing

Nearly 9 out of 10 IT businesses see nearshore outsourcing as a practical way to cut costs without sacrificing quality.

Working with geographically closer teams who share similar time zones and work cultures ensures smoother collaboration and faster turnaround times.

9. 75% of companies are happy with their outsourcing partners

Over 75% of businesses report positive experiences with their outsourcing partners. From timely project delivery to strong communication, these success stories underline the importance of partnering with reliable, experienced offshore teams.

10. 80% of offshore companies will use low-code/no-code by 2035

By 2035, 80% of offshore companies are expected to adopt low-code and no-code platforms. These tools speed up development cycles and reduce dependency on traditional coding. 

Businesses should look for offshore partners who are already investing in this technology.

11. 54% of US companies outsource to India

India remains the go-to destination for US businesses, with 54% outsourcing development to Indian teams. The country’s vast talent pool, competitive pricing, and robust technical education system make it an unmatched leader in offshore software development.

Offshore outsourcing: The numbers that matter in 2025

The offshore software development statistics outlined here point to a clear business priority: flexibility, cost efficiency, and access to a global pool of talent are no longer optional but essential for staying competitive.

For companies exploring offshore software services, the benefits go far beyond just saving money. These trends underscore the value of tapping into regions excelling in advanced technologies like cloud computing and AI.

The growing emphasis on nearshore and offshore partnerships signals a strategic shift, where cross-border collaboration becomes a key enabler of agility in an ever-changing market.

Looking ahead, businesses should no longer see outsourcing as a backup plan but as a core component of smart operational strategy—whether you are looking to work with an offshore development company or individual offshore developers. 

Regional Cost Comparison for Working with Offshore Software Developers

When planning your outsourcing strategy, understanding regional salary differences is key to balancing cost and quality.

Developer rates vary widely by location, influenced by local labor markets, technical infrastructure, and specialized expertise. 

Here’s a closer look at the rates for hiring offshore software developers.

Developer costs by region

• Asia: $20–$45/hour

Asia, particularly countries like India and the Philippines, stands out for its affordability and abundant talent. This region is perfect for projects requiring scalability or quick turnaround times, offering cost-effective solutions without compromising quality.

• Eastern Europe: $25–$50/hour

Eastern Europe strikes a great balance between cost and technical excellence. Developers from Ukraine and Poland are highly regarded for their expertise in emerging technologies like AI and blockchain, making this region ideal for mid-to-high complexity projects.

• Latin America: $25–$39/hour

Latin America’s proximity to the US and cultural similarities make it an attractive nearshore option. While rates are slightly higher than in Asia, developers here often excel in innovative fields like cloud computing, blockchain, and artificial intelligence.

• Western Europe: $50–$200/hour

Western European developers command premium rates due to high living costs and cutting-edge infrastructure. Businesses often turn to this region for projects that require advanced technical expertise or strict regulatory compliance.

• US and Canada: $80–$150/hour

Developers in the US and Canada are the most expensive globally, along with those in Western European countries, due to high demand and a smaller talent pool. Many companies outsource IT development internationally to offset these costs while maintaining high-quality results.

• Africa: $30–$99/hour

Africa is emerging as a promising outsourcing hub, with countries like Nigeria and South Africa offering competitive rates. This region is gaining recognition for its strengths in mobile development, fintech, and innovative IT solutions.

Why regional cost differences matter

Understanding regional cost differences is key to making informed outsourcing decisions. While Asia offers the lowest rates, the trade-offs often include challenges like significant time zone differences and potential communication barriers. 

These factors can lead to delays and inefficiencies, especially for projects requiring close, real-time collaboration.

Latin America, on the other hand, strikes a balance between cost and collaboration. Although rates are slightly higher than in Asia, the overlapping working hours with the US create a significant advantage.

Offshore developers in Latin America can engage in real-time discussions with your in-house team, attend meetings during regular US business hours, and provide faster turnaround times for critical updates or decisions.

This proximity fosters smoother communication, stronger team integration, and better project outcomes.

For US businesses prioritizing both quality and efficiency, Latin America’s nearshore advantages often outweigh the cost difference. 

It’s a strategic investment in collaboration and productivity, ensuring your development projects stay on track without sacrificing the benefits of outsourcing.

Final Thoughts

Offshore software development services have become a strategic must-have for businesses looking to stay ahead in a competitive market.

The statistics and regional cost comparisons in this article highlight how outsourcing helps optimize budgets and unlock access to exceptional talent.

By leveraging these insights, you can craft an outsourcing strategy that balances cost, quality, and expertise, ensuring your projects meet their full potential.

As we move through 2025, success will hinge on selecting partners who align closely with your business goals and bring the specialized expertise your projects need.

Whether you’re seeking to optimize costs, access world-class developers, or enhance collaboration, Near can help you find the talent you need within 21 days. 

Ready to build your dream offshore development team?

Book a free consultation today.