Are you a company or an individual looking for a software development team? Are you contemplating outsourcing?
It is well known that current educational institutions do not keep up with the ever-growing demand for skilled software engineers in the world, and the situation is predicted to get worse in years to come. Therefore, companies and individuals are relying more and more on finding software developers either by hiring them from overseas or outsourcing the projects.
On the other hand, in spite of centralization of workforce in the technological and industrial centers such as the bay area of the Silicon Valley in the USA or the Waterloo Region in Canada, the skill gap is affecting those areas as well. Because of the scarcity of IT professionals the development costs are very high and increasing.
Finally, given the dynamics of trends in the information technologies sector, it is reasonable to create a prototype of the product and test it in the market before committing to a long term product development. In this case spending a lot of resources on recruiting, hiring, and training developers can be less effective than approaching a formed team of experienced individuals. For the purpose of developing a prototype, a short term contracts with an outsourcing vendor also could save money on development costs. This also applied to long term projects. Usually, people rely on outsourcing simply to save money.
So, where to look for the perfect software developers’ team to outsource?
In this post we will compare and contrast different markets of outsourcing software developers, which are the best for projects of different types and in different stages of development lifecycle.
India, Pakistan, China, Vietnam, and Philippines are currently very popular locations for hiring software engineers for remote work . Outsourcing markets such as in India have been developing since 90s. Many professionals have studied in western universities and then returned to their homeland as a result of benefits and other policies introduced by the local governmental programs. Some have had sound software engineering as well as management experience while working abroad.
The developers from this region can be characterised by their ability of finding quick solutions and for doing work that requires skills in mainstream languages and technologies. However, they most notably stand out by the low rate. This is a result of the low operational and labor costs and the affordability of life in such regions. On the other hand, the costs in well developed markets have been steadily growing. This leads to the development of new markets such as in Pakistan and Vietnam that are trying to catch up by offering lower rates for the same work.
As a downside, the engineers from Asia usually concentrate on quantity and speed rather than quality, and the level and scope of skills is geared towards solving mainstream problems based on best practices rather than complex problems needing fundamental knowledge, creativity, and innovation. Furthermore, given cultural specifics, specialists are aiming at managerial positions rather than at in depth technical knowledge.
In terms of communication, even though the engineers from this region, especially from India, are often good at communication and are ready to work the main part of the day, the timezone difference can be a huge issue if you need quick responses to your comments or queries.
So, if you need a quick solution for a regular problem or a prototype and you accept the tradeoffs in quality, you should look into what this rapidly growing market has to offer.
Computer science and software engineering have originated in the USA and Great Britain. In fact, the term Artificial Intelligence was first formalized at the Dartmouth workshop, and the attendees were western mathematicians . As a result, not only were computational methods and technologies mostly developed in western laboratories, but also their education and the industry related to computer science even until this day are considered the best.
Currently, developers from North America and Europe are leading in terms of the complexity of the problems they can solve, the quality of software developed, as well as the speed of development given their usually sound level of experience. If we add the ease of communication given their English language skills, as well as the correspondence of the time zones with the clients from the west, specialists from the origins of AI become the perfect candidates for everybody. Or are they? The above benefits come with a huge cost. Literally… Given the operational and labor costs in the first world countries, the compensation rightfully charged by westerners can be above of the one charged by developers from Asia by order of magnitude.
Therefore, the western market of developers would suit the clients whose projects require serious knowledge and experience in solving complex algorithmic or software design problems, very high standards of quality, and ease of communication and responsiveness.
Some specialists believe that the America’s 90s boom was not caused by the rise of the internet era, but rather by the fall of the Berlin Wall . Right at the beginning of the 90s, a huge number of very intelligent and educated professionals moved from at that point already post-Soviet territory to the west. They were products of a very strong educational system. And although their knowledge and skills were geared towards fundamental sciences rather than state of the art technology, they were able to quickly learn and adapt to the new technologies and started innovating. In fact, the majority of the people in the Silicon Valley were not born in the USA .
The immigrants from eastern Europe were desirable employees for American companies because of one more reason. They were ready to employ their knowledge and skills for comparably lower wages.
Currently in the Eastern Europe, in countries such as Russia, Ukraine, Czech Republic, operational and labor costs are still lower than in the west. However, education in these countries still carries the same traditions so valued in the west, and it takes in more and more elements related to contemporary methodologies and technologies.
The software engineers from this region usually are good communicators, since being exposed to the information technologies, they have not had a choice but to learn English and communicate in it with fellow specialists. Needless to say, there are branches of international companies which require all of the correspondence to be in English even inside the company.
In terms of time zones, the shift from Greenwich time can be as low as 2 hours as in Kiev, but can reach 12 hours in the eastern parts of Russia. However, the majority of software engineers are concentrated in the European part.
So, the Eastern European market is a very well balanced location to look for software developers who can solve both complex and trivial problems with good software quality and for a reasonable payment while providing good communication and responsiveness.
Armenia is one the best examples of countries to find developers in the Eastern European region. Culturally, education and work excellence has been one of the most important values through millennia. We know this first hand, since we at Noor Games operate in Yerevan, the capital of Armenia.
During the Soviet era, in spite of the small share in the population of the USSR, Armenia had the largest share in the computational research and development. In 1956 Yerevan Scientific Research Institute of Mathematical Machines (YerSRIMM), commonly known as Mergelyan Institute of Mathematical Machines, was established and became the provider of computing technology for years to come . Most notably, the first computer in the USSR was designed by YerSRIMM in 1959 and ran on vacuum tubes. 2 years later, the semiconductor based second generation computer was ready. Later on, the institute moved on to the development of software as well as production of computers in it’s local plant. The institute designed the telecommunication system for the flight to the moon. In 80s about 10,000 people were employed by YerSRIMM.
In the early 90s, during and after the collapse of the USSR, a number of software engineers migrated. In fact, some of them moved to the technological centers such as the Silicon Valley and had their impact on the America’s 90s boom.
Starting from early 2000s, the IT sector in Armenia has been growing rapidly. In 2015, the number of IT companies was 450, and it has a steady increase of over 12% per year. . The majority of the companies are software development oriented. Some of the companies were purchased or merged into international giants during the last 10 years. Those include names like Synopsys, Mentor Graphics (currently part of Siemens), National Instruments, VMWare, Cisco, Oracle.
In addition, local based companies are achieving huge success as well. For example, Pixart is a mobile photo editing application developed by Armenian developers and was considered the hottest startup of 2015 by Forbes; Shadowmatic is a game developed by Triada Studio and won the Apple Design Award in 2015; SoloLearn is the largest community of mobile code developers and was among the hottest startups of 2015 of the Bay Area.
The breakdown of the industry for 2015 in terms of specialization shows that customized software and outsourcing has the highest share of 20%, followed by system design and automatization and mobile development. In terms of revenue turnover the customized software and outsourcing is followed by chip design which reaches 20% of revenue turnover while being only 3% of the industry .
Apart from the quality of software engineers, their scientific background, cutting edge skill level, and the ability to innovate, this market offers other huge advantages as well. The operational and labor costs are lower than in the majority of the other Eastern European countries, the IT sector is backed by the governmental policies that are aimed at constantly improving the investment climate as well as protecting the IPs with international standards.
The knowledge of English among software engineers is excellent and is free of the strong pronounced accent present in the carriers of Slavic languages. This comes from the fact that many of the developers at some point in their career have worked in international companies with English as their main language of written and often oral communication. Given the affordability of internet via fiber optic and 4G, the penetration of English is increasing significantly.
Yerevan time is GMT+4, 1 hour ahead of Moscow and Kiev. So, communication and responsiveness are similar to that of other Eastern European countries.
To sum up, if you want to gain access to a software developer’s market which has been chosen by many international giants in the industry, which can provide you with a wide variety of specialists from different software engineering backgrounds, and which has the prefect quality/cost ratio in the region, Armenia is definitely a place to look at.
Please ask your questions and share your experience in the comments below. Don’t forget to subscribe to our blog for more posts like this and Like our Facebook page.
Vahagn Harutyunyan, Team Lead at Noor Games
Narek Aghekyan, CEO at Noor Games
 S. Mezak, Software Without Borders: A Step-by-step Guide to Outsourcing Your Software Development. Earthrise Press, 2006.
 P. McKevitt, “Daniel Crevier, AI: The Tumultuous History of the Search for Artificial Intelligence. London and New York: Basic Books, 1993. Pp. xiv 386. ISBN 0-465-02997-3. £17.99, $27.50,” Br. J. Hist. Sci., vol. 30, no. 1, pp. 101–121, 1997.
 A. V. Chris Haroun, “Amazon Web Services: This generation’s Berlin Wall tear-down deflationary event,” VentureBeat, 05-Jul-2015. [Online]. Available: https://venturebeat.com/2015/07/05/amazon-web-services-this-generations-berlin-wall-tear-down-deflationary-event/. [Accessed: 01-May-2017].
 A. Giaritelli, “37 percent of Silicon Valley foreign-born,” Washington Examiner, 12-Feb-2016. [Online]. Available: http://www.washingtonexaminer.com/37-percent-of-silicon-valley-foreign-born/article/2583195. [Accessed: 09-May-2017].
 I. Usa, Armenia Business and Investment Opportunities Yearbook: Strategic Information and Opportunities. International Business Publications, USA, 2013.
 Administrator, “Report on the State of the Industry – Enterprise Incubator Foundation.” [Online]. Available: http://www.eif.am/eng/researches/report-on-the-state-of-the-industry/. [Accessed: 09-May-2017].