5 Reasons of rapid development of Ukrainian IT outsourcing

16 Aug 2018  /  Business, Tech world  / , ,

Image — Ukrainian IT Outsourcing

Recently Ukraine became a popular destination for IT outsourcing. A lot of IT school and Technical Universities are offering education for talented students. A huge amount of IT companies is ready to work with newly graduated students or to teach talented ones from the beginning. Despite political and economic issues, faced by Ukraine, the IT industry represents stable and rapid development.

Ukraine is called destination no.1 for IT outsourcing in Europe

Image — Ukraine is no.1 for IT outsourcing

More than 100 big IT companies, including Cisco, Oracle, Rakuten, and Samsung, are developing in Ukraine. Furthermore, there are more than 10 000 small and mid-sized IT companies whose work is mainly concentrated on the outsourcing. The biggest concentration of those is in Kyiv, where around 30% of those are located. The rest of the companies are split among Lviv, Dnipro, Odessa, and Kharkiv.

The work of Ukrainian software engineers is concentrated on various fields: mobile development, IoT, Web and Cloud development, health care and insurance services as well as, they are really successful in the development of Virtual and Augmented Reality. The number of English speakers, among IT developers had increased since recent years, even it is not perfect yet. Taking it into account, each company has well-skilled project managers with perfect English and communication level.

Ukraine does not only represents the biggest amount of software developers, it also demonstrates rapid growth of the branch. They say that till 2020 the number of IT specialists will increase twice and reach 200 000 people.

Fewer control increases growth

The IT field is not over controlled by a government, as most of the private business areas in Ukraine. That creates more possibilities for rapid development and increases chances for small and mid-size companies to step into this area.

Darwin’s theory says that evolution is a process of long-lasting changes, which lead to the creation of new individuals, forms, and types. The same theory applies to the evolution of IT companies in Ukraine. Around 20 years ago, in the early beginning, there were few software developers working as freelancers, and later first IT companies were created in the somebodies apartments. While today, we see thousands of IT companies and hundreds of thousands of software developers.

It is not only about outsourcing

Yes, Ukraine outsources it`s services to foreign companies, but its amount has decreased. Only 16% are specified on the helpdesk or sys administration for other companies. Most of the IT companies develop an independent product, which made a huge influence on the everyday life of every person. Because of the privacy policies and NDAs, signed before most of the projects are getting started, companies are not allowed to declare it to the public. That is why Ukraine is known as the country concentrated on the outsourcing. There are few main business models, used by IT companies:

  • Service model. When the IT company develops a product, at the request of the clients, all intellectual rights for the product belong to the client.
  • Product model. IT company develops products and licenses, the intellectual rights of the product are kept by the developer company.
  • Mixed model. Companies of this type work on both, developing its own product and do software for other companies.
  • Outsourcing of business processes. The company performs some business duties for international companies, which are not related to software development. Mostly those companies work as call-centers, helpdesk and system administration.

IT field influences improvement of other fields of the life

In the modern situation in Ukraine, workers of IT industry set the style of the life of the whole city and country. There are 20 IT clusters in Ukraine, which function in big cities and small towns. Those clusters work on the development and improvement of different fields like an improvement of law specific issues, a popularization of IT field, development of technical education. Also, clusters work on the question of infrastructure, transport communication, ecosystem (popularization of waste sorting). Only positive changes are brought to the country with the popularisation of IT field.

Summing up

Ukraine became a perfect place for the outsourcing of business processes and individual product development for companies. Evolution of IT industry brought a lot of positive changes to the country, including transport infrastructure of the cities and ecosystem. And if those changes were achieved after just 20 years of developments, then we can only imagine what is expecting for us in the future.