What Is Outsourcing?
Outsourcing is the delegation of tasks or jobs from internal production to an external entity (such as a subcontractor). Most recently, it has come to mean the elimination of native staff to staff overseas, where salaries are markedly lower. It became a popular buzzword in business and management in the 1990s. (Wikipedia)
Offshore development has become critical part of the software industry as it enables getting products developed in shortest period with no time investment and saves a lot of money.
Is it due?
“If we are not realistic about what we are good at, then there is a chance of going backwards in the face of further competition... Innovative companies need to look at which things they should do offshore and what they should do at home”
Bill Gates, Chairman, Microsoft
IT companies in Ukraine have seen rapid growth and expansion over the last years or so, even while the tech sector in the United States and Europe has been languishing.
Due to AMR Research, 'companies use as much as 80% of their IT budgets to maintain the status quo. Investments in innovations that can help a company grow are often delayed because the company is spending too much of its limited IT budget on non-strategic activities, such as data center operations, application development and maintenance, and staffing an IT help desk. Offshore outsourcing changes the budget balance, the savings from which will free up $30B for new investments by 2010.'