What is the cost of IT services in Europe? Generally speaking, it depends on the region where you plan to build your technology unit. After all, each country has different standards of living, business climate, and IT sector. That's why, analyzing software development costs in Europe is impossible without peeling back the onion and looking at each region individually, which is exactly what we are going to do in this post.
But first, let’s dive deeper into the factors that influence software development costs in Europe.
Factors that influence the software development cost in Europe
Accelerance's Guide to Global Outsourcing Rates (2020) highlights 6 key factors that define the cost of IT services in Europe and globally.
Location: Software development rates tend to be higher in countries with strong economies. As Europe is a versatile continent that consists of different economies, from stable to developing, the cost of IT services in Europe varies from country to country.
English proficiency: A language barrier pertaining to international teams increases the likelihood of miscommunications, which can potentially lead to foiled deadlines and poor results. Europe includes some of the countries with the highest English proficiency in the world (the Netherlands, Austria, Denmark, etc )as well as countries with moderate English skills among the population (France, Czech Republic, Spain, etc). At the same time, in Europe, you can build a skilled team with full-working English proficiency in such countries as Ukraine and Poland.
Expertise: Just like anywhere in the world, software development costs in Europe depend on the skill set you need. If you’re hunting for hot skills, for example, Big Data, AI, Machine Learning, Cloud, or DevOps, you’ll have to pay top dollar, no matter where the team is located. However, the cost per hour of these specialists tends to be lower in some regions, for example, Eastern Europe.
Developers' experience: Naturally, the more experience a developer has, the higher their cost per working hour. At the same time, software development costs in Europe and rates for senior IT specialists tend to vary in different countries.
Project duration: Software development partnerships may last from a few months up to several years. There’s a common opinion that long-term contracts tend to be more affordable, whereas higher rates are applied for shorter engagements.
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Keeping these factors in mind will help you choose the optimum destination for your tech squad in Europe.
Software development costs in Europe: Central and Eastern Europe (CEE)
The reason why we start with this part of Europe is simple – we are a software development company that specializes in building tech teams in CEE. Operating in this region for more than a decade, we can confidently say that CEE is a goldmine for businesses looking for affordable and skilled talent. The following countries are currently the hotspots of IT talent in CEE:
- the Czech Republic
READ ALSO: Top Tech Hubs in Eastern Europe
When it comes to the cost of IT services in this corner of Europe, Accelerance reports that it varies from $21 to $118. According to Clutch.co, a firm aggregator, the average rate per hour for software development across most countries in CEE is between $25–$49, not including taxes and fees associated with a provider.
In Poland and Hungary, software development providers tend to charge $50-$99 per hour. This price is common across Central Europe.
In the CEE region, Ukraine, Moldova, and Bulgaria stand out as the most affordable destinations where you can find providers that charge less than $25 per hour of their service, excluding fees and taxes.
Additionally, according to Accelerance’s report, on average, a developer in Eastern Europe per hour earns:
Software development costs in Europe: Eastern Europe
Consisting mostly of developing countries, Eastern Europe made great strides in improving its business climate and attracting investors in recent years while sticking to moderate software development rates. Moreover, it boasts a great number of software developers who are reputable for providing high-quality services for companies in Western Europe and North America. If you’re looking to cut back on software development expenses, Eastern Europe is definitely worth consideration.
Software development costs in Europe: Western Europe
Unlike Central and Eastern Europe, Western Europe isn’t a go-to destination for reducing software development costs through outsourcing. To get the big picture when it comes to the cost of IT services in Europe, let’s see what it is worth to build a tech unit in Western Europe.
Companies looking to set up their teams in this part of Europe have to grapple with hefty software development rates. That’s why many local businesses prefer to build their units in other locations. As a company that works with businesses from Western Europe, we can say that lots of our clients face the problem of exorbitant software development costs in Europe. In particular, these are businesses located in the following countries:
- The Netherlands
Western Europe has some of the highest rates for IT services globally. According to Clutch.co, the majority of companies providing software development services in this region charge in the range of $100–$150 per hour of their services, excluding vendor’s fees and taxes. A wide range of providers even has a higher price tag, charging between $150–$199 per hour.
According to PayScale, the software development costs in this part of Europe are as follows:
The cost of IT services in Europe: Germany, France, the Netherlands, Switzerland
Looking at these numbers, it’s not easy to find affordable talent in Western Europe. That’s why outsourcing in this region isn't popular.
Software development costs in the UK
The situation is similar in the United Kingdom. The high software development costs in the UK make the country one of the biggest beneficiaries of offshore software development.
PayScale shows that retaining a developer in London will cost you around £53,000 per year. The average salary for a software developer in the UK is around £32,000 per year.
If we break down the rates according to the level of engineers, according to the same source, we will see that the salaries of developers in the UK are high.
Software development cost in the UK
If you’re up for bespoke development in the UK, you’ll pay in the range of $100–$149 per hour of the service of an average local provider. You can also find firms that charge a bit higher – $150–$199. Fewer firms offer their services at the rates of $50–$99, which is the minimum price for this type of service in the UK.
The cost of IT services in Europe: Northern Europe
This corner of Europe includes two main regions – Scandinavia and the Baltic states. Despite their geographic proximity, when it comes to the cost of IT services in Europe, the situation is drastically different. Before we dive deeper, which countries are in this region?
The Baltic states:
The best way to describe Scandinavian countries is a stellar quality of life, which assumes high prices for services.
On the other hand, there are the Baltic states, which belong to fast-growing economies with a positive business climate that welcomes foreign investments.
When it comes to the cost of IT services in Europe, Scandinavian countries can hardly be called affordable. Most of the local custom software firms maintain a price tag of $50–$99. A lot of local providers charge $100–$150 per hour of software development.
If you’re looking to trim expenses by building a tech team in this region, it’s best to consider Lithuania, Latvia, or Estonia. Most providers here charge between $25–$49 per hour of software development. It’s also worth mentioning that Estonia has the biggest number of providers offering lucrative rates among all states in this part of Europe.
READ ALSO: How to Reduce IT Development Costs
Finally, the Balkans
Countries like Croatia, Bosnia and Herzegovina, Serbia, Montenegro, Albania, North Macedonia, Greece, and Slovenia are hardly the first countries that come to mind when you’re thinking about outsourcing. However, the Balkans have a decent number of providers, despite the fact that the local IT sector isn’t as thriving as that of Central or Eastern Europe.
With an up-and-coming tech industry, Croatia offers lower prices than Western Europe, though the rates for IT services aren’t the lowest in the Balkans. Most Croatian firms charge from $50 to $99 per hour, but you can access a wide range of companies developing software for $25–$49 per hour. Only a handful of providers cross the threshold of $100 per hour.
The cost of custom development in Greece is the same, but in Slovenia, it’s more expensive to develop software – $50–$99 per hour is a common hourly rate.
The cheapest options for outsourcing in this region are Albania, Serbia, Bosnia and Herzegovina, and North Macedonia – the countries can guarantee the average price tag of $25–$49 per hour.
We’ve analyzed the cost of IT services in Europe. For your convenience, we can single out the most affordable hotspots to build your tech unit in case you’re looking to optimize your budget:
- Eastern Europe: (Ukraine, Poland, Bulgaria, Moldova)
- The Baltic states (Latvia, Lithuania, Estonia)
- The Balkans (Croatia, Albania, Serbia, North Macedonia, Bosnia and Herzegovina)
We may admittedly be a bit biased here, but if we were to name the best region that combines lucrative rates and a skilled workforce, it would be Eastern Europe. The region has a well-rounded IT sector that stands on the shoulders of talented developers with solid educational backgrounds, confident English, and decade-long experience being part of Western European and North American teams. When it comes to the cost of IT services in this part of the continent, Eastern Europe doesn’t let you compromise between quality and price.
Contact us to discuss if the team of Eastern European developers can help you reach your goals.