In 2021, IT outsourcing is still an effective option, even more so in the current turbulent times of the lockdown reality. The IT outsourcing overview of Ukraine’s IT market, providers and services shows that Ukraine is the solution for placing IT projects. The major reason why companies outsource their IT needs is the ever-growing demand to create, implement or tailor software solutions that drive their digital transformation of business processes, improve experience and performance, eliminate errors and ensure their commercial success.
Published: Feb 9, 2021
The business environment changes dictate companies that look for software development services from outsourcing partners to revise their priorities. Companies require technologies and automation to improve their business, whereas dealing with outsourcing software development, they focus on risk management. Analysts from Gartner think that 63% of enterprises will shift to a multicountry sourcing strategy, partnering with several providers from different countries to reduce outsourcing-related risks. Companies expect from service providers innovations that would add value and change business approaches, processes and methods from a short-term perspective. At the same time, business owners emphasize cost reduction, flexibility and agility of digital transformation as essential requirements to IT outsourcing partners.
Ukraine and its position on the world’s outsourcing market map
Let’s start the overview by stating that Ukraine is an outstanding IT outsourcing location for multiple reasons: value-for-money ratio, business environment and access to technologies and experts pool.
1. Cost-effectiveness of IT outsourcing to Ukraine
As far as cost reduction is the trending expectation from an outsourcing service provider, Ukrainian IT companies can offer exceptional service costs for the quality of delivered solutions compared to firms from other countries.
Ukrainian IT service providers have entered all categories of Clutch’s top companies and leader matrix reviews, while hourly rates of Ukrainian companies are more reasonable than competitors from other locations. For example, US IT firms rates are $150-199 per hour, IT providers from the UK quote $100-149 per hour. According to the Upwork search, experts’ hourly rates demonstrate the same tendency: Ukrainian top-rated experts are more affordable than skilled experts from other countries. In Ukraine, a company may hire a software developer freelancer for $25-50 per hour, while an expert with the same experience, tech stack and skills from Germany will cost $35-75 per hour.
2. Business environment of Ukraine as an IT outsourcing center
Ukraine is one of the world’s renowned IT outsourcing countries. In the Global Services Location Index, Kearney’s analysts report Ukraine occupies the 20th position in the list of fifty countries. Thanks to positive dynamics in geopolitical processes, researchers assess Ukraine as a healthful business environment, and Ukraine moved four places up. Ukrainian companies also are listed in the top 100 rating of outsourcing providers by IAOP and occupy approximately 10% of the ranked IT firms.
Besides the advantageous business environment, outsourcing to Ukraine may be beneficial for customers from the West due to the convenient time-zone, which is only 1 hour ahead of most of the rest of Europe and similar cultural background, enabling better communication, knowledge sharing and collaboration.
There are more than 1,600 IT companies in Ukraine, different in size and types, and this market share shows a growth of approximately 22% each year. The largest Ukrainian IT firms account for more than 8,000 employees. Several multicountry outsourcing companies have their branches in Ukraine, such as Grid Dynamics, EPAM or Global Logic. Many major international brands have placed their research and development centers in Ukraine, for example, Oracle, Wargaming, Samsung or Amazon.
According to statistics from Ukrainian governmental institutions, the information technologies sector accounts for 3.9% of Ukraine’s GDP. Almost 183,000 IT experts are registered as individual entrepreneurs, while the overall number of IT specialists exceeds 220,000. Different types of companies represent the information technology sector in Ukraine: outsourcing IT service providers, outstaffing IT companies, product IT firms and startups. Consumers of Ukrainian IT outsourcing services apply Ukrainian solutions for Telecom, banking and finance, healthcare and wellbeing, government, enterprise and manufacturing and other industries.
Ukrainian-born and based startups and products may prove Ukraine as a rewarding outsourcing location for contracting IT services. Let’s introduce some extremely successful Ukrainian startups in a few words.
- AirSlate is a workflow automation solution serving 60 000 clients and 25M users globally.
- Ajax Systems sells security systems in 75 countries.
- Allset partners with Google and 200+ restaurants as a restaurant reservation and food pre-ordering service.
- Attendify is an intelligent event technology that has served 14,000 events for more than 3500 clients.
- Augmented Pixels competes with Google in the fields of augmented reality, navigation, drones, 3D mapping, robots, and virtual reality.
- Competera, a pricing platform, has grown a million-dollar business without external investments.
- Depositphotos is a photobank that operates in 192 countries and competes with Shutterstock and Getty Images.
- GitLab, a web-based open source Git repository platform, is valued at $6 billion.
- Grammarly sees its mission in improving lives and communication and has attracted 2 billion English speakers worldwide.
- MacPaw now raises above $28 M on delivering the most popular apps to every Mac, but was established without any external funding.
- People.ai has raised $100M of investment for an AI platform for enterprise sales, marketing and customer success.
- Petcube creates cameras to entertain and take care of pets and has Emma Watson as one of the thousands of grateful clients.
- Preply is a global private language tutoring platform that has engaged 25,000 tutors to teach 40 languages to 100,000+ users from 160 countries.
- Readdle reached 100M downloads and has never attracted external capital for growth.
- Restream allows millions of users from 80 countries to stream a live video to all social networks.
- Revenue Grid as an AI-guided selling platform partner with Salesforce, Oracle, Microsoft, and SAP.
- YouScan is an AI- and NLP-powered social media listening and image recognition platform trusted by 500+ major brands and agencies worldwide, including McDonald’s, PepsiCo and others.
3. Tech stack, availability of the expert pool and access to education in Ukraine as an IT outsourcing hub
Among the IT outsourcing service providers on the Ukrainian market, there are multinational corporations and R&D centers of international firms. So, it is no surprise that Ukrainian developers work with the same tech stack as the rest of the world. Moreover, many famous Ukrainian startups use AI, NLP, machine learning, image or voice recognition solutions and other modern technologies for their products.
Interviews with Ukrainian IT specialists have discovered the most used programming languages for commercial projects. They are:
- JavaScript 18.4%
- Java 15.5%
- C# 13.8%
- Python 13.2%
- PHP 10.9%
- C++ 5.9%
- TypeScript 4.5%
- Swift 2.8%
- Kotlin 2.7%
- Ruby 2.4%
- Go 1.9%
- 1C 1.7%
- C 1.5%
- Scala 1.1%
- Others (Pascal/Delphi, T-SQL, Dart, PL-SQL, Erlang, Apex, R, Groovy, Clojure, etc.) 3.7%
The overall number of higher educational institutions in Ukraine is 282, and 82 of them are technical universities located in 27 cities that teach future IT specialists. Higher education in Ukraine is more affordable in comparison with other European countries.
Now the country reports 220K of IT experts, and this number is growing at 22-26% annually. 70% of Ukrainian IT experts live in the five million-plus cities: Kyiv, Kharkiv, Lviv, Dnipro and Odessa. 25% of IT specialists in Ukraine are women. Almost 50% of Ukrainian IT experts have up to 5 years of experience, and 12% reached a 10-year mark in the profession. 60% of Ukrainian IT specialists are married and 25% of them have children. Ukrainian developers work 40-60 hours per week on average. And, finally, 45% of the Ukrainian IT specialists work for outsourcing contracts in different domains.
How to find an IT outsourcing provider in Ukraine and where to look
While selecting an IT outsourcing service provider to partner with, choose wisely. We recommend focusing on your business-specific needs first and looking for a partner with a relatively matching experience. Reports, market analysis and reviews from independent research agencies may help you understand the market. You may also ask your clients, partners, friends and even competitors for references and testimonials. As the next step you may also analyze the field-oriented catalogs, ratings, lists, marketplaces and so on.
Our blog articles may complete the IT outsourcing overview of Ukraine as the solution to implement IT projects. We have already highlighted many IT outsourcing-related topics and tried to answer important questions about the Ukrainian IT outsourcing landscape. You can further check the following posts to find some useful tips according to your matters of interest.
- List of Catalogs Where to Find a Software Development Company
- IT Outsourcing Trends 2020: 6 Hints to Deal With Pandemic Biases
- Top 5 Reasons to Hire Ukrainian Software Developers
- You Want to Hire Software Developers: How Long Would It Take in Ukraine?
- Outsourcing Product Development: How to Get Things Right
- IT Outsourcing to Eastern Europe: Why It Can Be Your Best Choice
- The Process of Forming a Remote Development Team. From Your Inquiry to The Working Team
To top it all
Despite the COVID-19 restrictions, companies still need to adapt to the rapidly changing business environment and transform digitally. Contracting an IT outsourcing service provider to implement required transformations is a very efficient model, business-wise, as for our IT outsourcing overview. Ukraine is an advantageous location to outsource your IT needs. Many international corporations have chosen Ukraine as a location for their branches, offices and research and development departments. Affordable costs, high quality of deliverables, large IT talent pool, great experience and availability of mature experts make Ukraine a beneficial option for IT outsourcing for companies from the West.
SYTOSS is a seasoned full-cycle and full-stack software development company. We have over 10 years of experience in implementing digital transformation efforts for clients from the Telecom, FinTech, Shared Economy, eCommerce, Marketing, Healthcare, Digital Media, and Publishing verticals. Our focus is a long-term partnership, and we deliver globally. We are skilled at custom software development, system integration, business analysis, software quality assurance and maintenance and support of complex software systems. If you are looking for an IT outsourcing partner to tailor a software solution to your business-specific requirements, contact us, and we will discuss how we can assist you in your efforts to apply digital transformation to your business.