Top software development outsourcing trends for 2021: Everything you need to know

Olivia Cuthbert
5 min readMay 7, 2021


IT outsourcing is becoming increasingly popular and is bringing fundamental changes to businesses around the world. According to r, global IT spending, which reached $3.8 trillion in 2019, is only expected to grow in the coming years. Meanwhile, Statista estimates that global outsourcing industry revenue will reach $92.5 billion in 2019 and predicts rapid growth through 2021.

These figures illustrate the unlimited potential of emerging technologies. Following the latest innovations, the majority of businesses have already accepted the inevitability of digital transformation. Companies of all sizes are watching the prevailing trends in software development outsourcing.

Outsourcing is shaping the global market, revolutionizing how companies think about development, and offering unparalleled opportunities to exploit. That’s why we’ve highlighted ten software development outsourcing trends that set to be unprecedented in 2021. So get ready for the buzz that your business can benefit from.

Software development outsourcing trends: what can we expect in 2020?

Barriers to software development outsourcing

1| The rise of niche software companies

Opinions divide: some say they would prefer to work with a single outsourcing company. Others say that they would like to work with one outsourcing partner.

But the evidence shows that more and more companies need narrowly specialized firms. This trend is due to the rapid evolution of the technology space. It isn’t easy to have an in-house team that can keep up with the innovations that appear every day and has all the necessary skills.

Companies are looking for outsourcing service providers who specialize in achieving the highest quality and have no problem working with multiple suppliers to achieve the desired result. However, when a large outsourcing company offers full-cycle software development and has a diverse team of skilled professionals, it has the added advantage of being an excellent supplier for building strong, transparent relationships.

2| Customers will want an enhanced experience through AI and IoT

Online shopping has long infiltrated our daily lives. What’s more, with the outbreak of the COVID-19 epidemic, it has become the new normal, according to Forbes, and even the over-65s say they are more likely to shop online than offline. The growing demand for an online shopping experience drives companies to invest more in improving the user experience (UX). Customers are 140% more likely to spend if they have a positive experience.

Artificial intelligence and IoT-based solutions will improve e-commerce by offering a more personalized customer journey. AI-powered chatbots are already replacing human interactions when providing guidance and advice to customers.

3| High demand for blockchain services

Global blockchain spending is forecast to reach $16 billion per year by 2023.

It has made it a key trend in IT outsourcing. From smart contracts to instant microtransactions, distributed ledger technology has proven to increase security, transparency and offer innovative solutions for start-ups to get paid.

As the demand for competent and up-to-date blockchain services grows, so does the need for well-trained professionals. Today there is still a shortage of blockchain professionals.

4| Growing need for enhanced cybersecurity

Data has continued to become the most relevant resource. It is nothing new. But that is why protecting it has never been more crucial.

While cybercrime is on the rise, more and more companies are investing to comply with the GDPR (General Data Protection Regulation). The need now is to ensure that all data is well protected.

Especially when government institutions become victims of cyberattacks, whether it’s an IT company or a small family business with a website, owners will reach out to outsourced cybersecurity services to eliminate security concerns, protect their business data, and meet GDPR compliance standards.

5| A booming global cloud computing market

According to another forecast by several sources and Gartner, demand for cloud computing is only set to grow. Global cloud spending is forecast to reach close to $1 trillion.

With more data to store, companies will turn to outsource efficient cloud platforms. The demand for cloud outsourcing services will go hand in hand with the need for security services. The number of public cloud platforms for data storage is already growing.

6| The fintech, healthcare, and telecoms industries will be significantly digitized

Trends in outsourcing will go hand in hand with trends in the technologies affecting each industry.

In particular, Fintech, Healthcare, and Telecoms will see high demand for outsourcing services to support their digital transformation.

AI, blockchain, and peer-to-peer transactions will become the new norm in the fintech industry. At the same time, healthcare institutions — both public and private — will look to AI-enabled VR services to broaden the horizons of diagnostics.

Not to mention the impact of 5G networks on the telecoms sector, which will open up unprecedented opportunities for mass connectivity to IoT networks.

7| Expanding IT outsourcing hub for Eastern and Central Europe

While a few years ago, the demand for outsourcing services heavily influenced by the need to reduce costs. In 2021, companies will continue to focus on quality rather than lower prices.

It will lead them to explore the favorable environment for outsourcing destinations in Eastern and Central Europe rather than China and India.

Ukraine, Poland, and Belarus are already becoming attractive centers for experienced offshore development teams to collaborate.

The growth of the Eastern and Central European development market drives by high-quality services, well-trained teams, and still moderate prices.

8| Explosive growth of AR and VR markets

The AR market expects to grow to $133.78 by 2021. In turn, smartphones entering the global market will increase demand for AR and VR solutions.

Shopping experiences expects to be boosted by AR technologies. The recent launch of Pokemon Go is a prime example of the interactive nature of AR. These technologies will continue to penetrate markets such as tourism, e-learning, manufacturing, etc.

Although the market for AR and VR is still somewhat uncertain, companies are looking to outsourcing services to implement interactive elements to increase their sales. Large companies such as Mercedes and Apple are already using these technologies.

9| The hype around robotic process automation

Reduced operating costs, better work coordination, fewer manual errors — these are just some of the benefits of the trend towards RPA technology.

Business automation is the number one priority in an ever-evolving digital environment. Logistics management, payment processing, a more personalized experience all benefit from RPA technology.

Virtual assistants and robots are just the tip of the iceberg to share the burden of menial and repetitive tasks from humans. That’s why IT outsource firms are investing heavily in business automation and augmented analytics.

10| Growing interest in progressive web applications

The increased demand for a better user experience has led to a growing demand for PWAs. These designs create an application-like experience on websites.

The first wave was Google’s unfriendliness towards websites without a mobile version. The second wave is the customers themselves, who will not welcome a website with a harmful UX. Therefore, businesses will look to top software outsourcing companies in India to implement PWA and meet the growing needs of their customers.



Olivia Cuthbert