For companies seeking to reduce costs while accessing top-tier global talent, offshore outsourcing emerges as a highly effective solution. It offers significant cost savings without compromising on the quality of talent, allowing companies to assemble a highly skilled remote team within budget constraints. However, the true efficacy of offshore outsourcing lies in comprehending its operational dynamics. What is a better way to grasp its potential than by examining successful examples of offshore outsourcing?

These examples serve as valuable learning experiences, offering insights that can be applied to your projects. Yet, it’s not merely about replicating what works elsewhere but rather understanding the underlying principles and adapting them to address your unique challenges.

In this guide, we delve into five compelling offshore R&D triumphs, extracting practical strategies that can be implemented to streamline your business processes effectively. By the end, you’ll be able to draw connections between the industry insights and your current business needs.

What is offshore outsourcing and how does it work?

Building an offshore R&D center involves delegating a scope of work to foreign companies located in distant countries, and thus establishing a remote team that functions as an extension of your core business. 

R&D covers a wide range of functions. More so, it’s not a regular outsourcing team that covers such services as customer support. An R&D center is an innovation hub populated by visionaries who offer technical knowledge and industry insights. These people offer thought leadership and robust skills that drive innovation and business growth. In other words, they can make a real impact on the industry.

Now, let us take a look at some examples of global collaboration and offshore R&D triumphs.

Google

Google, known for having one of the largest development teams in the corporate realm, sought to leverage external talent to foster advancement and innovation. As evidenced by a Bloomberg report in 2018, the number of Google contractors surpassed that of their in-house employees. This exemplifies Google’s expansion and global outreach efforts.

Furthermore, in 2020, the company executed a significant acquisition aimed at bolstering its standing as a prominent provider of cloud-based services. CloudSimple, a Ukrainian firm, specializes in furnishing a secure, high-performance environment tailored for VMware migration solutions. Through this acquisition, Google enhanced its portfolio of cloud-based offerings, catering to a broader spectrum of customer needs. More so, the company acquired an expert R&D center that functions as an autonomous unit capable of innovating and growing on its own.

These instances of offshore collaboration underscore the reality that even behemoth corporations cannot solely rely on internal resources. By harnessing the expertise and ingenuity of external contractors, they ensure the continual rejuvenation and relevance of their business operations. In an era characterized by rapid change, this adaptability is paramount.

IBM

IBM stands as one of the globe’s largest technology enterprises, boasting operations spanning more than 170 nations. Its history of offshore R&D triumphs dates back to the 1960s when the company commenced relocating production to overseas markets. In recent times, IBM has sustained this practice, leveraging remote software development teams for diverse functions such as software development, consulting services, research and development centers, and the oversight of cloud-based computing systems.

Through the years, IBM has emerged as the foremost multinational employer in India, underscoring its commitment to offshore operations. Beyond its substantial workforce, IBM has made substantial investments in the country’s infrastructure and economic landscape. The company has allocated billions towards research and development initiatives while also establishing numerous technology labs and centers across the country.

Spotify

Spotify presents yet another compelling case study of offshore R&D triumphs, particularly with its expansion into Latin America starting in 2013. Initially targeting Mexico due to its substantial client base, Spotify gradually extended its reach into Brazil and other regional markets, yielding significant dividends. Notably, Chile emerged as one of Spotify’s fastest-growing markets, drawing commendation from its founder, Daniel Ek, who aims to replicate this success across other regions. 

Focused on scaling and competitive positioning, Spotify strategically targeted promising markets and forged partnerships with music rights holders. Over time, the company established proficient legal and business teams in these strategic locales. Consequently, Spotify has made a profound impact in Latin America, evident in the remarkable 986% surge in Latin music listeners from 2014 to 2023, constituting a significant portion of Spotify’s global user base.

Netflix

Netflix, a prominent player in the tech industry, naturally stands out among the top offshoring companies. Similar to Spotify, Netflix experienced remarkable growth upon entering the Latin American market in 2011. Initially boasting 23 million subscribers and tapping into a potential audience exceeding 600 million, Netflix’s offshoring strategy unfolded in Brazil, followed by Argentina, Chile, Colombia, Mexico, and 38 other regional markets. Local production played a pivotal role in Netflix’s success across these markets. By leveraging local insights and teams, Netflix solidified its presence in Latin America. However, this expansion also aligned with the rapid growth trajectory of the market itself. 

Lyft

Lyft, though relatively young as a company, has quickly emerged as a major player in the ride-sharing sector since its establishment in 2012. Renowned for its commitment to delivering an innovative and seamless customer experience, Lyft continuously explores avenues to enhance its services, earning accolades for its pioneering approach to customer service. 

In 2021, recognizing the importance of bolstering its technological capabilities, Lyft embarked on a significant endeavor by inaugurating a software research and development hub in Eastern Europe. This strategic move aims to amplify its tech community and product innovation endeavors. Currently comprising a team of 20 professionals, the center focuses on data mapping and enhancing Lyft’s services, with plans to expand to 100 members. Anticipated to play a pivotal role in advancing Lyft’s product development initiatives, the technology center is poised to make substantial contributions in the future.

Flightright: A bonus example of offshore triumph

At nCube, we set up remote R&D centers for companies globally. So far, we have served 122 companies in 19 locations by creating teams of skilled software engineers. In this section, we want to give you another example of offshore triumph – Flightright, a Germany-based startup that operates in the field of air passenger rights. According to the CTO of the company, we’ve “helped them reinvent their offshore strategy,” and here’s a short version of this triumph. 

Back in 2018, the startup received funding and was looking to scale up to bring its product to the next level. nCube helped the company backfill the talent gaps and compose a full-fledged remote center to build a landscape of products. 

The team adopted the best practices of remote collaboration, working in a distributed environment. nCube covered the following roles:

• Front-end developers
• Back-end developers
• DevOps engineers
• Round-the-clock on-call duty

The remote tech center has helped Flightright design and implement a wide range of new features that took the company from a young startup to a recognizable brand. Our cooperation still goes on. Read more in a dedicated case of offshore triumph. 

What about your company? Do you have an offshoring strategy? If so, feel free to contact us to see how we can help you with it.