Offshore Software Product Development Services Guide

Can’t find the right developers fast enough – or within budget?

That’s the reality for 90% of tech leaders today. Offshore software product development offers a smarter way to build: access top talent, cut costs, and go to market faster.

Offshore product development (OPD) gives companies access to global talent, speeds up delivery, and keeps costs in check.

This guide walks you through the benefits of this model, key locations with their pricing, strengths, and challenges. We also reviewed steps to launch your own offshore squad and tips to choose the right partner.

Why companies choose offshore software product development

Cost savings

Salaries, office space, IT equipment, and employee perks can quickly expand your budget. Offshore software product development helps reduce these overhead costs. By working with offshore teams in countries with lower living expenses, you can save up to 50%.

An offshore software product development company like nCube also covers the overhead side – from workspace and infrastructure to HR and talent retention.

That means you still get skilled developers and save a greater share of your budget. More resources for innovation and marketing!

Faster time-to-market

Offshore software product development is a gateway to several highly populated powerhouses of IT specialists, letting you skip long hiring cycles. Together, Eastern Europe and Latin America offer access to over 2.5 million software professionals. Top destinations like Brazil, Mexico, and Poland each boast up to 500,000 IT specialists with diverse skill sets. With such deep talent pools, you can form teams faster and launch your product sooner.

Access to specialized expertise

Offshore Product Development (OPD) gives you access to outstanding expertise in high-demand fields like Data, AI/ML, Blockchain, IoT, and Cybersecurity.

Moreover, many offshore regions are building deep talent pools in such domains as Fintech, Healthcare, Automotive, and E-commerce, with engineers with relevant backgrounds. For instance, Mexico, Brazil, and Colombia have emerged as leading Fintech hubs. Romania is recognized as a powerhouse for Manufacturing and Automotive talent. Poland and Ukraine excel in in-demand skills like AI, Cloud computing, and Cybersecurity.

Focus on core business functions

Building a product takes a lion’s share of time, leaving you no time to run other business aspects. An offshore product development company can take over technical execution, so your internal staff stays focused on strategy, marketing, and customer experience. Free up your leadership team to focus on go-to-market strategy, investor relations, and customer experience – while offshore engineers handle delivery.

Increased flexibility

Another benefit is the ability to scale your team up or down depending on project needs. No permanent hiring or tough layoffs required – just ask your provider of offshore software product development services to add more developers or reduce the team size when you’re wrapping up the work.

Another important aspect is flexible engagement models. An offshore software product development company like nCube will give you an option that best fits your needs: a Dedicated Team, a Project-Based setup, or Managed Services.

• Offshore Dedicated Team – Ideal for long-term SaaS development;
• Project-Based – For MVPs or feature upgrades with clear specs;
• Managed Services – When you want end-to-end delivery without managing developers;
• ODC – Full-scale team with infrastructure support, legal entity, and local ops.

Risk mitigation and business continuity

Working with teams in different regions helps spread risk, so your operations don’t have to stop, even when unexpected disruptions happen. If one team faces issues, another can pick up the slack. Many offshore software product development companies also offer recovery and backup plans, aiming to protect clients’ code, data, and progress. This kind of built-in continuity gives companies peace of mind and keeps projects on track, no matter what.

24/7 product support and maintenance

Offshore product development can help you build quicker, thanks to around-the-clock collaboration. With time zone differences, work doesn’t stop: When your local team signs off, your offshore squad picks up where they left off.

Moreover, an offshore team can develop in parallel with your in-house crew. Design, development, and testing can happen at the same time, without unnecessary delays.

Steps to launch offshore software product development

Step 1: Define product goals

Before partnering with a provider of offshore product development services, outline your product vision, target market, scope, and technical requirements. What problems does it solve? Who is it for? What does success look like? Then, map out the key features and deliverables to give your chosen provider the clarity they need to source product development experts with suitable expertise.

Step 2: Choose the right offshore development model

Choosing the right cooperation model depends on your goals, timeline, and level of involvement in the development process.

Here are the key models:

• Offshore dedicated team: Best for long-term projects that need close collaboration with your in-house staff. You get a stable team that feels like an extension of your company.
• Project-Based Outsourcing: Covers your short-term development needs with a clearly defined scope and time frame. You specify the tasks, and the vendor’s team executes them without your direct involvement.
• Managed Services: Suits full-cycle product development. The vendor handles the entire SDLC, from planning to delivery.
• Offshore Development Center: A full-fledged remote setup managed by the vendor, including infrastructure, HR, and admin support.

Step 3: Select the right offshore destination

Compare regions based on talent availability, cost-efficiency, and tech expertise. As we established above, some countries excel in AI or Cloud, others in mobile apps or enterprise software. Check out the Coursera Global Skills Report 2024 and other sources to see tech specialization in offshoring hubs.

Other aspects to consider are:

• English proficiency: Use EF English Proficiency Index to check how your chosen location ranks in terms of language command;
• Look at time zone overlap: Go to WorldTimeBuddy to see how many common hours you have with your offshore hub.

Step 4: Evaluate and choose an offshore partner

Start by reviewing portfolios, client reviews, and case studies. Look for experience in your domain and proof of successful product launches. Based on our Clutch rating, 4.8/5 of our clients are willing to recommend us. We’ve helped product companies like Life360, Rakuten Viber, Savills, Ravetree, among others, launch their solutions.

It’s also important to check their processes. Are they transparent? Responsive? Easy to work with? Also, see if they have certifications like ISO or GDPR compliance in place, as data security should be treated seriously in offshore engagements.

Step 5: Negotiating and signing contracts

After choosing a development company, draft a detailed Service Level Agreement (SLA). It should clearly outline:

• Scope of work: Deliverables, key milestones, and deadline;
• Payment terms: Fixed-price, Time & Materials, Dedicated Team, or another model;
• IP rights and Confidentiality: Clauses referring to product ownership and data privacy.

Step 6: Team launch

With the paperwork done, your offshore software product development company will help you onboard your team. At this step, nCube’s personal manager will help you integrate team members into your processes, set up IT infrastructure, establish communication channels, and collaboration tools.

On your side, define team roles and responsibilities, set up workflows, assign tasks as well as align your offshore team on goals and product vision.

Step 7: Development and project execution

Now your team dives into the development process. Most of our clients use Agile methodology – plan sprints, hold daily standups, release them in small iterations, and do QA at every stage.

Step 8: Post-launch support and maintenance

After your product is shipped to the market, your offshore team will provide ongoing support, including bug fixes, updates, and security patches.

A provider of software development services will also come in handy when your product grows. The team will help you scale features, improve UX, and make continuous upgrades.

Overview of key offshore development destinations: Strengths and challenges

Region	Top countries	Avg hourly rate ($)	Key strengths	Potential challenges
Eastern Europe	Ukraine, Poland, Romania	30-60	Strong engineering culture; AI/ML expertise; High English proficiency; Innovation hub.	Higher costs than Asia and LATAM; Time zone differences with North America.
Latin America	Mexico, Brazil, Argentina, Colombia	30-50	Time zone alignment with North America; Strong Fintech and SaaS expertise.	Smaller talent pool compared to other hubs; Emerging IT ecosystem.
Asia	India, Vietnam, the Philippines	15-45	Massive talent pool; Cost-effectiveness.	Lack of common business hours; Varying quality levels.

Eastern Europe

• Strong engineering culture, deep expertise in AI, blockchain, and enterprise software.
• Countries: Ukraine, Poland, Romania (average developer rates: $30-60/hr).
• Pros: High-quality education, strong English proficiency, and EU regulations compliance.

The hallmark of Eastern Europe as an offshore software product development location is its reasonable quality-to-price ratio. It strikes a great balance between cost and deep technical expertise – ideal for complex products.

Consisting mostly of developing countries, the region has made great strides in improving its business climate and attracting investors in recent years.

• Education

Eastern Europe boasts a solid system of tech education, yielding thousands of degree holders per year with a strong background in Mathematics and Engineering. For example, 95% of engineers at nCube are university degree holders who are successfully taking up offshore product development opportunities for our US-based clients.

• Time Zone

The difference in time zone between Eastern Europe and North America can range from 5 to 12 hours ahead, allowing for a minimum of 3 hours overlap, which is a solid time window for real-time communication. In fact, many developers prefer to shift the start of their working day a few hours ahead for better synchronization with their offshore counterparts.

• Developer availability

According to various sources, Eastern Europe boasts from 1M to 1.3M developers. Let’s take a look at the number of developers in our reviewed countries:

Ukraine: ~350,000 developers

Poland: ~450,000 developers

Romania: ~85,000 developers

Most of these developers are involved in the export of offshore product development services, which means they are already experienced in working with international companies.

• Cost

Ukraine and Romania are more affordable due to the lower cost of living. According to Clutch, the average rate per hour of software development services in these countries is $25-49. In Poland, such companies charge between $50-$99 for an hour of developer’s time.

• Culture fit

The culture that dominates the region can be best described as Western-like, with lifestyles and values akin to those prevailing in North America and Western Europe. It means that local developers have a strong work ethic, open mind, and a knack for innovative thinking.

• Team visits

Visiting your offshore software product development services partner in Eastern Europe will be comfortable due to a variety of flight connections with major North American cities. The travel time between major cities in Eastern Europe and the East Coast is 10-12 hours, whereas it will take up to 15 hours to get to the West Coast of the US.

• English proficiency level

According to EF English Proficiency Index, the countries we review have obtained the following results:

• Ukraine: Intermediate
• Poland: Advanced
• Romania: Advanced

We at nCube always source software developers who speak English confidently, as it’s crucial for building relationships in a product development setup. 95% of our team have Upper Intermediate to Advanced English proficiency.

Latin America

• Ideal for nearshore software product development due to time zone alignment with North America.
• Countries: Mexico, Brazil, Argentina, Colombia (average development rates $30-50/hr).
• Pros: Agile teams, competitive costs, and a growing talent pool.

The IT sector in Latin America has expanded exponentially in recent years. Similar to Eastern Europe, the key driver in this region is a growing pool of tech talent and, as an added bonus, the proximity to North America.

• Education

According to the World’s top universities ranking, 99 out of 454 top universities are located across Brazil, Mexico, Argentina, Colombia, and Chile. To propel the industry to new heights, educational institutions in the region offer a wealth of courses in information technology. Not only do such initiatives help nurture new talent, but they also help drive salaries and cost of living thanks to foreign investments.

• Time Zone

The difference in time zones between North American and Latin American countries is negligible, which enables the two sides of offshore product development (OPD) to operate within their regular business hours. While almost a full overlap in working hours reduces the effort needed for arranging working through time zones, it eliminates the benefit of continuous development you can find in Eastern Europe.

• Developer availability

Estimates vary on the number of software developers in LATAM, but the ballpark figure is nearly 1M developers. Here’s the country-by-country breakdown:

• Brazil: ~500,000 developers
• Mexico: ~225,000 developers
• Argentina: ~115,000 developers
• Colombia: ~65,000 developers

The number of developers in these countries is basically the same as in Eastern Europe, however, some countries like Brazil are true giants when it comes to their pools of tech talent.

• Cost

According to Clutch data, the average cost of offshore product development is higher in Brazil ($50-$99) than in the rest of the reviewed countries ($25-49).

• Culture fit

Unlike American and European culture, most Latin American cultures are more high-context, which means they tend to rely on context and implicit messages in communication, as well as maintain strict social and workplace hierarchy. It means that there will certainly be some adaptation period when working with an offshore software product development company in this region.

• Ease of travel

The geographical proximity is a prime reason why this region attracts North American companies. Working with teams in this region may seem to be more convenient due to reduced travel time, especially if your offshore team is located in Mexico. However, if you’re based in New York and want to visit your team in Buenos Aires, your flight will take up to 12 hours.

• English proficiency level

According to the EF English Proficiency Index, only two countries, Argentina and Chile, stand out with an advanced English proficiency level, whereas the rest of the countries offer either intermediate or pre-intermediate proficiency among the adult population.

• Brazil: Intermediate
• Mexico: Pre-intermediate
• Argentina: Advanced
• Colombia: Pre-intermediate

Asia

• The most cost-effective destination with reputable outsourcing markets.
• Countries: India, Vietnam, the Philippines (average development rates $15-45/hr).
• Pros: Large talent pool and established offshore infrastructure.

Offshoring has traditionally been associated with Asia, where the pool of tech talent is larger than in any other region. The countries that spearhead offshore product development services in this region are:

• India
• China
• The Philippines
• Vietnam
• Pakistan
• Thailand
• Malaysia

Nowadays, these countries face increasing competition from Eastern European and Latin American growing pools of technology talent, where the providers of offshore software product development services focus on reliability, service quality, and building lasting relationships with their clients.

• Education

Asia can boast a wealth of opportunities when it comes to advanced education in technical disciplines. Overall, 121 out of 454 top universities are spread across the reviewed countries, including Peking University and Tsinghua University, which are among the 25 best universities in the world. Moreover, China and India are the leaders among all countries in the world in terms of the number of STEM graduates, with 4.7 M and 2.6 M graduates annually.

• Time zone

The time difference between North America and Asia can be up to 15 hours ahead, which doesn’t assume any common time windows. As such, working with an offshore product development services partner located in Asia, you may have to put in more effort to orchestrate the development process to avoid unwanted delays, bottlenecks, and a sense of zero control over the development process. On the other hand, with the right approach, an Asia-based team can become an autonomous unit of your organization.

• Developer availability

The leading countries in supplying developers in this region are India and China, thanks to their large populations. According to various sources, the number of developers in the reviewed countries are:

• India: ~5,000,000 developers
• China: ~7,000,000 developers
• The Philippines: ~200,000 developers
• Vietnam: ~63,000 developers
• Pakistan: ~125,000 developers
• Thailand: ~33,000 developers
• Malaysia: ~54,000 developers

In light of these staggering numbers, it may seem easy to find suitable developers fast, especially when it comes to India, China, and the Philippines. However, the repository of developers in Asia is often watered down by numerous specialists without commercial experience who may be suitable for minor routine tasks.

• Cost

According to Clutch.com, most offshore software product development companies in the region charge $25-$45 per hour of developer’s time, with the only exception of the Philippines, where the majority of such companies charge below $25 per hour.

• Culture fit

Working with software development services vendors based in Asia can be quite a challenge due to the risk of a culture clash that often materializes between the representatives of Western and Eastern cultures, leading to miscommunication and misunderstanding between the units. It imposes an additional challenge you’ll have to deal with when explaining your software development vision and goals to offshore teams.

• Ease of travel

In light of the great distance between Asia and North America, arranging team visits can be hard, as the flight duration can exceed 15 hours. Thus, visiting your offshore software development unit in this region will certainly require planning the budget and time for lengthy stays.

• English proficiency level

Choosing Asia for offshore software product development, keep in mind that English proficiency levels vary drastically across the region, from very low to moderate and high. Here’s a breakdown:

• India: Intermediate
• China: Low
• The Philippines: Advanced
• Vietnam: Intermediate
• Pakistan: Intermediate
• Thailand: Pre-intermediate
• Malaysia: Advanced

How to choose the right offshore product development partner

Technical and domain expertise

A partner who knows your industry is a guarantee of successful product development. Look for vendors with proven experience in your field. For instance, we at nCube have built teams for over 120 companies worldwide, including such domains as Fintech, Banking, Healthcare, E-commerce, SaaS as well as AI, Blockchain, Cloud, and more.

Talent availability and skillset

Make sure your chosen provider of offshore product development services can build a diverse product team: From developers and QA testers to UI/UX designers and DevOps engineers. With over 125,000 IT experts in our network, we’ll build a full crew, ready to deliver at every stage.

Communication and collaboration

Make sure your chosen development company has strong English skills and the ability to adapt to your company’s culture. Our teams at nCube are comfortable using real-time collaboration tools like Slack, Zoom, and Jira, as well follow best standards when it comes to reporting and documentation.

Time zone compatibility and work overlap

It’s best to pick a vendor whose working hours align with your core business hours. A few shared hours each day can speed up offshore product development. Nearshore locations like LATAM or Eastern Europe often offer better overlap, enabling real-time collaboration.

Security | Intellectual Property (IP) Protection

Make sure to protect your offshore product development (OPD) venture using top security standards like ISO 27001, GDPR, or HIPAA, depending on your industry.

Additionally, sign NDAs and clearly define IP ownership in your contract before launching offshore product development.

Finally, ask about the vendor’s security practices and ensure they are using secure environments, encrypted communication, and VPNs.

Development costs and pricing models

Cost efficiency shouldn’t mean compromising on quality. Analyze the cost of offshore software development in various regions, aiming for a balance between affordability and quality.

Whether you select Fixed Price, Time & Materials, a Dedicated Team, or offshore Staff Augmentation, your provider should offer transparency. Also, consider extra costs that go with team expansion, for instance, onboarding, knowledge transfer, and infrastructure setup.

Reputation and client reviews

Check client testimonials, Clutch or GoodFirms ratings, and case studies. This will help you gain insight into how the vendor performs. If possible, reach out to past clients to ask about their experience.

Wrapping up

No matter the location, product development is a management-heavy endeavor. Apart from selecting a reliable provider, you should consider other things that define the success of the venture. In our research, we reviewed the three top regions where you can access tech talent, taking into account factors like education, time zone, developer availability, hourly rates, English proficiency levels, and ease of travel.

At nCube, we’re happy to answer any questions you may have about building offshore teams in Eastern Europe, Latin America, or Asia. With over 17 years of experience in offshore product development, we know how to help you find the right talent and scale with confidence. Contact us – we’re here to help.