Evolution of the Remote Development Team Model in Ukraine

Remote collaborations come in many shapes and forms. Ukraine, in particular, boasts a variety of remote development models. We can single out three major ones, such as Staff Augmentation, Outsourcing, and R&D Center. Most of these models came about due to the Ukrainian IT industry boom of the late 90s, culminating in the country’s continued presence in the global outsourcing arena. In this post, we will go over the main milestones Ukraine has passed as it blazed the path to becoming a significant remote development team destination.

The 90s: Beginning of remote development teams

To start, we should go back to the roots. The Ukrainian IT industry finds its roots dating back to the early 90s when the country became independent from the Soviet Union. As the rest of the world was getting connected and progressing well into the age of the Internet, the first personal computers were just beginning to appear in Ukraine. At that time, the first Internet provider, Golden Telecom, entered the market, creating the very first corporate networks. Despite a slow Internet connection, people took an interest in being connected and using computers to enhance their work and free time. Thus, computer clubs proliferated across the country to become a phenomenon of the late 90s – early 2000s. They were wildly popular among youth, and many young people were intrigued by the inner workings of computers, which gave a start to an entire generation of those that would become hardware and software developers. 

Late 90s: Staff augmentation as the main remote development model

Circling back to the milestones, we should mention Staff Augmentation, a remote development team model that refers to adding remote developers to your local team. In staff augmentation, the provider doesn’t have internal expertise and plays by the client’s rules. The first remote software development teams that came into the picture in Ukraine were small studios consisting of several people who worked for overseas clients as developers. Despite the sky-high cost of computers and a poor IT infrastructure, many of them managed to stay afloat and provide decent services thanks to their passion for technologies and strong educational background. 

Back in the 90s, foreign companies just tested the waters with Ukrainian remote software development teams, mainly delegating tasks outside their core business activity. It would be a decade before Ukrainian IT companies started to emerge as a globally recognized IT force. 

 As the 2000s approached, the Ukrainian IT industry began to gain ground. More and more Western companies discovered Ukraine as a powerhouse of qualified technology talent and began to entrust their critical development elements to remote software development centers in Ukraine, which significantly elevated the reputation of the Ukrainian IT industry around the world. Spurred by the trust received from global companies, the era of full-fledged outsourcing services officially began in Ukraine. 

The 2000s: The rise of outsourcing companies  

During the 2000s, a burgeoning remote development model solidified into one of the country’s core activities. IT companies became more diverse with their services and started to provide “turn-key” solutions for companies in various domains. 

Simultaneously, an IT community in Ukraine started to take shape as developers began to share their experience and expertise, first across several companies located in the same IT hub, such as Kyiv and Lviv, and then grew to connect other communities, forming a nation-wide community.  

Unlike the early development studios run by several people, outsourcing companies required a constant replenishing of talent, which they could draw from the local talent repository. It became possible, given that the IT industry began to grow at record speed, as more and more talent joined its ranks. These weren’t only software developers but project managers, business analysts, HR, marketing specialists, and more. The IT market in Ukraine became vibrant,  all thanks to foreign companies that chose to set up remote development teams in Ukraine. 

The 2010s: Remote Software Development Centers (R&D)

At the beginning of 2010, the demand for IT talent increased, and the job market responded by expanding from 90K to nearly 200K during the next decade. Although the outsourcing model remained prevalent among software development collaborations, other models came into the picture as well, namely R&D centers and product companies. 

Being the huge market that Ukraine is, global companies such as Samsung Electronics, Netcracker, Aricent, Wargaming, Google (to name a few) began to set up offices in Ukraine. For Ukrainian developers, it meant that they could apply their knowledge and have a say in everything related to the client’s product – from the tech side to marketing. Since an R&D office is a remote development unit of a large company, Ukrainian developers got a chance to learn and apply global companies’ best practices. 

The most important and arguably the most impressive milestone that can be attributed to the evolution of the remote development team model is the emergence of homegrown product companies. Companies such as Grammarly, Petcube, Ajax Systems, Competera and more, have all become household names, not only in Ukraine, but abroad as well.

What’s next? 

After three decades of harboring experience working with European and North American companies, Ukraine’s IT ecosystem is now well-established and relies on a nation-wide IT community as well as a skilled talent pool. Today, global companies continue to hire remote software development teams in Ukraine because it means working with seasoned, experienced developers whose values, work ethics, and mentality are closer to the Western world over the alternatives. With more and more engineers joining the ranks of IT each year, there’s no end in sight. 

Remote development team models in Ukraine have come a long way from the fledgling small studios of the 90s to today’s full-fledged outsourcing, product companies, and R&D centers, and at this point the remote development team model is assuredly here to stay.

If you have any questions about a remote software development team model or would like to hire a remote development team in Ukraine, let’s connect.