OSDC (Offshore Software Development Center)

OSDC (Offshore Software Development Center) is an organization that provides you with remote teams to get a customized software solution for your product. A dedicated offshore software development center [1] can hire you developers, QA engineers, managers, CTOs, and software architects to help you design the desired product from scratch, make modifications, and maintain the product.

When OSDC Originated

A vast demand for hiring an offshore software development center occurred in the last several years when companies saw great potential and benefits of such services. However, offshore software development is yet to evolve fully. The phenomenon of outsourcing remote teams from other countries dates back to the end of the 20th century and the beginning of the 21st. However, long ago before it became a worldwide business strategy, Stopford and Wells claimed the importance of this approach in 1966 [2].

The first industries that took up OSDC professional development practices were computer service and airline in the 1990s. Later on, software development was enriched with a variety of services including backend development, web design, and application development that led to $76 billion growth in 1995. These days, around 50% of US firms, as well as other global companies, already operate with OSDC, meaning that remote development teams satisfy their needs.

Offshore Software Development Center Models

OSD center allows you to complete a full-cycle development process as well as maintain software after its release. Let’s see what is OSDC model, OSDC definition, and how to choose the right model.

OSDC Classic

One of the most widespread models used by tech giants and startups in the world. The vendors of this model offer you a dedicated team of developers based on your needs and requirements, considering the necessary skills, personal qualities, and past experience in a particular domain. The distributed team undertakes both the technological and business goals of the client. Based on this model, you have full control of the project execution as you can directly interact with your team.

OSDC Branded

The model engages its employees to build your brand with minimal operational risks. They make sure you have a branded position on the market, define your infrastructure, address legal and regulatory issues, as well as take care of your human resources.

OSDC Trust

If your operations are kept in top secret, this OSDC model addresses the needs of hyper security and confidentiality in software development activities. According to this model, developers who cooperate with their clients are strictly forbidden to disclose any type of project-related information to third parties.

Revealing the Features of OSDC

With different offshore software development center models, you are able to extend your colocated staff by hiring employees with the necessary qualification and of the required quantity. Depending on your needs, offshore developers can either conduct a full-cycle development of your products or complete small and short-term projects for your internal operations. Startup businesses hire OSDCs to implement innovative solutions and technologically scale up the product to build a competitive stance on the market.

Due to the maturity of the IT market in the world, you are in front of a wide range of countries to choose your OSD center destination. Therefore, both developed and developing countries are able to open new markets, expand their target audience, and cross the borders of sales and product marketing to grow their business operation on the world’s stage. Moreover, many companies, such as Apple, Samsung, Huawei, and other tech giants, set up their R&D centers to promote their services overseas and gain global recognition.

OSDC Industry on the World Scene

64% of software application development is proved to be offshored as of 2017. In 2015, the world’s market generated about $88 billion by offshoring software development and maintenance services [3]. A certain tendency of offshoring is presented among the following countries: for instance, the United States establish offshore software development in Europe and Asia, while Asia offshores in the CEE as well as North American countries. Some countries find OSDC a beneficial investment due to a large talent pool, low labor costs, and higher technological awareness [4].

Benefits and Risks of Establishing an Offshore Software Development Center

By establishing OSDC, you get the following benefits:

• Low labor costs
• A tremendous talent pool of world-class specialists
• Access to new markets across the world
• Simplified staff scaleup process
• Fast hiring process

Let’s now take a look at the risks you may face:

• Issues with communication
• Hidden costs and inaccurate time frame
• Time zones difference
• The quality may not meet expectations

Companies That Succeeded Using OSDC Services

Companies are either offshore software development fully or relocate small projects to a vendor in other countries. Offshore software development center for startup is a proactive and reliable approach to add technological value to the product and at the same time save costs for labor. Here are examples of the companies believing that distributed teams have much to give.

With over 1,200 employees in 65 countries, GitLab continues embracing the IT world with its platform for the full DevOps lifecycle. They have managed to coordinate their operations all over the world by referring to the services of ODSC. Europe, Asia, and the United States are committing to the company’s expansion and growth [5].

Olark – a company that provides an online communication platform and has a team on 3 continents. From the US employees to Sweden, Japan, and Germany, the company’s representatives claim that cultural diversity brought them the ambiance they needed along with loyalty for the success of the platform [6].

esurance – a fintech insurance startup from Switzerland has about 16 dedicated developers hired from Ukrainian OSDC. Europe, especially CEE countries, is a demanding destination for offshoring as they provide the world’s quality of services for smart costs [7].

OSDC Services Costs

In order to define what country to choose as an OSD center, companies carefully analyze the salary rates that match their financial capacity. Let’s compare the compensation rates of the dedicated offshore software development center in the USA, UK, Switzerland, Australia, Japan, and Ukraine referring to PayScale [8].

See Also

• OSD Acronym
• ODC Acronym

References

1. https://mobilunity.com/blog/offshore-development-center
2. https://www.researchgate.net/publication/220580510_IT_OFFSHORING_history_prospects_and_challenges
3. https://www.statista.com/statistics/662991/worldwide-cio-survey-outsourced-it-functions
4. https://www.forbes.com/sites/jwebb/2017/07/28/what-is-offshoring-what-is-outsourcing-are-they-different/#7784aa7d2a2e
5. https://www.forbes.com/sites/laurabegleybloom/2020/02/11/work-from-home-top-20-companies-remote-jobs/#2fb977ed157d
6. https://skillcrush.com/blog/best-remote-companies-to-work-for/
7. https://www.esurance.ch
8. https://www.payscale.com

Written by:

Anastasia Stefanuk

Market Researcher