10 software outsourcing trends to consider in 2025

Big companies today, like Google, Meta, People AI, and Microsoft, use IT outsourcing to improve their efficiency, save money, and boost profits. But did you know that businesses have been outsourcing IT work since the last century? This practice was key to the success of famous companies like Kodak and Apple.

As technology continues to change, it’s important for businesses to keep up with the latest outsourcing trends. From the future of software development outsourcing to the latest IT trends, the industry is experiencing many exciting developments.

In this article, we'll explore the major outsourcing trends set to make a big impact in 2025 and discuss how staying ahead in outsourcing can benefit your company’s growth!

The evolution of outsourcing in 2025

Outsourcing started gaining traction in the 1980s and 1990s when companies like Kodak began looking for ways to cut costs. Over the years, this practice has grown into an essential strategy. In 2025, businesses now use outsourcing to fill gaps in their expertise and keep up with the latest technologies.

Оne of the big benefits of outsourcing is that it allows companies to look beyond their local area for specialized skills –they can tap into talent from all around the world.

This global reach helps to find the right experts and leads to significant cost savings. Yegor Denisov-Blanch at Stanford University analyzed how a company cut its annual engineering costs from $12.3 million to just $7.4 million by hiring engineers in Poland and India instead of all in the Bay Area.

On average, businesses can save around 30% by choosing to outsource rather than hiring full-time staff. Moreover, 78% of businesses worldwide report feeling positive about outsourcing partnerships.

Because of that, the global outsourcing market was valued at around $280.64 billion in 2023, and it's expected to keep growing at 9.6% each year from 2024 to 2030. This indicates that more companies are realizing the benefits of outsourcing, and we can expect even bigger niche growth in the future.

Major outsourcing trends in 2025

Today, companies are not only focusing on traditional business practices but are also exploring new avenues such as advanced technologies, automatization, SaaS, and low-code/no-code development.

These major trends are not only essential for companies looking to remain competitive, but also they impact other niches, including outsourcing.

Advanced technologies drive outsourcing demand

As more industries around the world start to use new and exciting technologies like Blockchain, Artificial Intelligence (AI), and the Internet of Things (IoT), the need for skilled development teams is growing rapidly.

For example, McKinsey research shows that AI alone could add between $2.6 trillion and $4.4 trillion to the economy each year. In the fields of technology, media, and telecommunications (TMT), the introduction of new ways to use AI could create an impact worth between $380 billion and $690 billion. This includes benefits like $60 billion to $100 billion in telecommunications, $80 billion to $130 billion in media, and about $240 billion to $460 billion in high-tech sectors. It’s clear that in just a few years, anything that isn't connected to AI might be seen as outdated or ineffective.

However, along with the excitement of these new technologies comes a big challenge: it can be difficult to manage such complex projects with only an in-house team. Many companies, especially those in the United States, are finding that outsourcing their software development needs is the new black. By working with outsourcing teams, businesses can access the special skills and knowledge they require without having to hire a lot of new employees.

For example, San Francisco-based startup People.ai, that offers businesses a platform to boost their sales using machine learning technology. Realizing the need for specialized AI talent, People.ai decided to open a research and development office in Ukraine. This move allowed them to tap into a wealth of highly skilled AI developers who may not be readily available in the U.S. By outsourcing to Ukraine, they can continue to grow and innovate while keeping costs under control.

As companies recognize the advantages of outsourcing, especially in areas requiring expertise in new technologies, we can expect this trend to continue well into the future.

Cloud-based platforms and SaaS models

Many companies are turning to сloud-based platforms and SaaS solutions to help them work better and faster. According to Deloitte, 90% of companies see cloud computing as an important tool for their outsourcing plans. The U.S. is in the lead for the most SaaS companies in the world with about 17,000, followed by the U.K. with the second-leading market with 2,000 SaaS providers. Microsoft, Salesforce, Adobe Creative Cloud, Google Workspace, Zoom, Shopify, Slack, Zendesk – all these companies have at least one thing in common: they use SaaS technologies.

When businesses use cloud outsourcing, they often notice big benefits. More than 60% of companies that choose this method say it helps them be more agile and efficient. This means they can respond to changes more quickly and do their work more smoothly.

Automation and AI

Automation tools and artificial intelligence (AI) are making a big difference in how businesses operate and invest money.

According to a survey conducted by McKinsey & Co 72 % of companies have already adopted AI to their day-to-day operations. At its core, AI refers to the capability of machines to imitate intelligent human behavior, allowing them to perform tasks that traditionally required human cognition, such as understanding language, recognizing patterns, solving problems, and making decisions.

Another particularly important development is Robotic Process Automation (RPA). RPA is changing all industries by automating routine and repetitive tasks. It uses software robots that perform human-like actions, which helps businesses run more smoothly and rely less on human workers for certain tasks. A recent report proves that the global RPA market is expected to grow rapidly, at 39.9% rate between 2023 and 2030.

Cybersecurity as a top priority

Cybersecurity is becoming more and more important for all businesses today. As technology grows, so do the risks of data breaches and cyberattacks. Cybersecurity threats can cause serious problems for companies. In fact, in 2023, the average cost of a data breach was around $4.45 million. This is a huge amount of money, and it could be devastating for most small businesses.

Malware, password theft, traffic interception, phishing attacks, DDoS, cross-site attack – all these risks drive many companies to hire outside experts to help protect their data and systems. These experts have the knowledge and tools to keep sensitive information safe from attacks.

With the focus on cybersecurity and the help of the outsourcing companies, like Devico, businesses can reduce the chances of a data breach. This way they can protect their valuable information and avoid costly damages. Making cybersecurity a top priority is essential for every business, big or small.

Hyper-specialized talent pools

Many companies face complex challenges that require specialized knowledge and skills. It could be AI-related skills, no-code/low-code technologies, blockchain, and more. To tackle these issues effectively, businesses are increasingly turning to outsourcing. This means they hire outside experts who have specific expertise in certain areas, rather than relying solely on their in-house teams.

For example, a company might need help with advanced data analysis, cybersecurity, and AI integration. Instead of trying to train their existing employees or looking endlessly for new staff to fill roles, businesses can opt to outsource professionals who already have the required skills. By tapping into these hyper-specialized talent pools, companies can:

1. Access top talent: Outsourcing allows businesses to find the best experts from around the world, ensuring they have the right people for the job.

2. Save time and money: Hiring specialized talent on a project basis can be more cost-effective than maintaining a full-time team for every niche area.

3. Focus on core activities: By outsourcing complex tasks, companies can concentrate on their main business activities and improve overall efficiency.

4. Stay competitive: With access to the latest expertise and technology, businesses can stay ahead of their competitors and respond quickly to market changes.

Low-code and no-code development

Gartner forecasts that 70% of applications developed by enterprises will utilize low-code or no-code technologies, a significant increase from less than 25% in 2020. Such popularity is adequate as these platforms allow users, even without extensive programming knowledge, to create applications and automate processes through visual interfaces, drag-and-drop features, and pre-built templates.

As the demand for low-code/no-code solutions continues to grow, businesses are increasingly looking to outsourcing providers that specialize in these technologies. With that, they get:

This democratization of technology is reshaping how companies operate, leading to significant efficiencies and faster time-to-market for products and services.

Multi-provider strategies

The trend of adopting multi-provider strategies in outsourcing has gained significant traction among companies seeking to reduce dependency on a single provider and enhance operational flexibility. Here are several key aspects of this trend:

• Dependency reduction. Relying on a single outsourcing provider can pose risks related to service disruption, financial instability, or misalignment of business goals. By diversifying providers, companies can mitigate these risks and ensure continuity of services.
• Geopolitical stability. Companies are increasingly aware that geopolitical risks can affect service delivery. A multi-provider strategy allows businesses to distribute their operations across different regions, reducing vulnerability to local disruptions.
• Service specialization. Different providers may excel in different areas (e.g., IT support, customer service, manufacturing). A diversified approach allows companies to select the best provider for each specific need, enhancing overall service quality.
• Competitive pricing. Engaging multiple providers fosters competition, which can lead to better pricing and terms. Companies can negotiate contracts that are more favorable by leveraging offers from various providers.
• Access to diverse expertise. Working with multiple providers exposes companies to a broader range of skills, technologies, and innovative practices. This diversity can drive innovation within the company.
• Agility in response to change. In a rapidly changing business environment, having multiple partners allows companies to pivot quickly in response to market demands or technological advancements.
• Benchmarking performance. Companies can benchmark the performance of different providers against each other, ensuring higher service quality and accountability.
• Redundancy in critical services. In critical functions, having multiple providers ensures that if one fails, others can step in, maintaining service levels.

The trend towards multi-provider strategies in outsourcing reflects a strategic shift towards greater resilience, flexibility, and innovation. As companies navigate an increasingly complex global landscape, diversifying their outsourcing partnerships will likely remain a key component of their operational strategies.

Sustainability and green IT outsourcing

Sustainability and green IT outsourcing represent a critical shift in business practices aimed at minimizing environmental impact while optimizing operational efficiency. As consumers become more environmentally conscious, there's a growing demand for businesses to adopt sustainable practices. This trend is not merely driven by regulatory compliance, such as adherence to The Green Deal Industrial Plan, but also by the recognition that sustainability can enhance brand reputation and customer loyalty.

Studies by NielsenIQ and McKinsey & Company indicate that a company's commitment to sustainability can significantly influence brand preference and loyalty. To give you an example of how it works, products marketed as sustainable grow 2.7X faster, 77% of businesses indicate sustainability leads to increases in customer loyalty and 63% say sustainability boosts brand revenue.

This is why more and more businesses turn to remote work and outsourcing, as it helps reduce the carbon footprint associated with commuting and office energy consumption. This flexibility not only contributes to sustainability but also increases employee satisfaction and productivity.

Regular reporting on sustainability metrics helps companies remain accountable and allows them to demonstrate their commitment to green practices to clients and stakeholders.

Going sustainable through green IT outsourcing not only aligns with regulatory requirements but also fulfills consumer expectations and enhances corporate reputation.

Expansion of emerging outsourcing destinations

The global outsourcing industry is witnessing a significant shift towards emerging destinations, driven by their cost-effectiveness, talent availability, and strategic location. Among the leading players, several stand out as the best of the best.

Ukraine

Recognized as a top offshoring and outsourcing destination by Gartner, Ukraine boasts a vast talent pool of skilled IT professionals, with over 200,000 IT specialists working in the country. Ukraine's industry expertise and government support have driven its growth in software development services, and it is now hosting R&D branches of major companies like Microsoft, Apple, Boeing, and Samsung.

India

According to a PwC report, India is poised to become a USD 60 billion outsourcing market, with over 1,900 GCCs (Geographic Concentration of Companies) already operating in the country. Annual growth rates of 8.76% have cemented India's position as one of the leading outsourcing markets globally.

Poland

With its robust experience in software development and excellent English skills, Poland has emerged as one of the leading IT outsourcing hubs in Europe. Its outsourcing sector is expected to reach $2.89 billion in revenue by 2024, with major centers in cities like Warsaw, Kraków, and Wrocław. Poland offers rates that are 20-25% lower than counterparts in the US and Western Europe. IT makes up for about 8% of its GDP, making it a popular choice for international R&D centers.

Mexico

Mexico's outsourcing sector has been gaining traction due to its strategic location, competitive cost structure, highly skilled workforce, and favorable business environment. The revenue is expected to reach US$6.74 billion this year, indicating a strong start to the year. The market is anticipated to experience a steady annual growth rate (CAGR 2025-2029) of 8.50%, which is a significant growth rate.

Argentina

Argentina's outsourcing sector is expected to continue growing in the coming years, with a significant increase in revenue and market volume by 2029. According to projections, the country's revenue in this sector is set to reach US$468.10 million. This growth is expected to continue at an annual growth rate (CAGR 2025-2029) of 10.54%, resulting in a market volume of $698.80m by 2029.

The Philippines

Holding 10-15% of the global market share in outsourcing, the Philippines is one of the leading destinations in APAC, with a long history of outsourcing dating back to the 1990s. Its lower cost of labor, strategic location, and skilled workforce make it an attractive destination for companies looking to outsource various services.

Egypt

With more than 250,000 FTEs of educated workforces, Egypt is well placed to become a critical player in the outsourcing market in the MEA region. The country's geographical location, aligned time zone with Israel will make it one of the favored destinations for companies looking for diversification. Furthermore, the recent setup of Luxoft in New Cairo will further popularize this country.

Brazil

With an IT market projected to grow by 11%, Brazil is set to become a more significant player in the outsourcing industry. The country's increasingly outsourcing-friendly environment is encouraging foreign investment, with the IT outsourcing market in Latin America poised to witness a revenue growth of over USD 9 billion in 2024.

South Africa

With a dynamic pool of young, tech-savvy professionals, South Africa has secured the top position as the global front office customer experience offshore location of choice. Employing over 270,000 people across six cities, the country's BPO sector is expected to grow at a 3% annual rate.

As these emerging destinations continue to grow, they offer businesses a unique opportunity to tap into new talent pools, reduce costs, and expand their operational presence.

Blurring lines between staff augmentation and strategic partnerships

Companies are moving away from traditional outsourcing models and are increasingly choosing more collaborative, strategic partnerships. This shift is changing the way companies think about their talent needs and how they get work done. Here are some key points highlighting current outsourcing trends in the IT outsourcing services sector:

1. Collaborative relationships: Instead of just hiring a service to complete tasks, businesses now want partners that they can work closely with. It encourages teamwork and effective communication, leading to better results for both companies and their partners.

2. Shared success: Companies now seek IT outsourcing services companies that share responsibility for project outcomes. This approach helps everyone feel more invested in success, fostering a partnership where both sides work towards common goals.

3. Specialized skills: As businesses face more complex challenges, they need specialized skills and knowledge. By forming strategic partnerships in software development outsourcing, companies can access expert talent that helps them innovate and adapt to changes in the market.

4. Flexibility and growth: Traditional outsourcing often comes with strict contracts and inflexible terms. In contrast, strategic partnerships offer flexibility, allowing companies to scale their resources up or down as needed.

5. Long-term connections: Companies are now looking to build long-lasting relationships with their partners rather than relying on short-term contracts. These connections help both sides understand each other’s goals and work together on improvements and new ideas.

6. Data-driven insights: With advances in technology, businesses can access a lot of helpful data. Strategic partners can use this data to provide insights that lead to better decision-making in the software outsourcing market. This means companies can make informed choices and reduce risks.

7. Integrated Teams: The lines between in-house teams and external partners are becoming less defined. Companies are integrating external talent into their teams to create a more cohesive workforce. This trend is important in offshore software development, enabling better communication, knowledge-sharing, and overall productivity.

Companies are increasingly recognizing the benefits of hiring external companies for IT services, leading to more outsourcing IT efforts worldwide. Partnering strategically can lead to better innovation, efficiency, and strong results while helping companies navigate the fast-paced changes in the global market.

Agile and DevOps integration

Agile and DevOps represent two of the most powerful ways to develop and deliver software today. When used together, the result is one smooth, uninterrupted process that continues to pay great dividends for a business and their outsourced software development projects.

The Agile approach was invented for a light and iterative way of developing software. It focuses on teamwork, continuous improvement, and customer satisfaction. Agile teams work closely together to deliver working software in short cycles with an emphasis on speed, quality, and customer feedback.

DevOps is a practice that combines software development and operation for better collaboration, efficiency, and quality. It automates the building, testing, and deployment of software by streamlining the process. When combined with Agile, DevOps facilitates quicker, more reliable software delivery.

Imagine this: a company that outsources mobile app development can adopt an integrated Agile and DevOps approach in the process of how its development team collaborates with stakeholders to satisfy the requirements on this project. This team would adopt the Continuous Integration/Continuous Deployment pipelines to automate the testing and deployment of the app for fast delivery at high quality, hence improving customer expectations.

With the adoption of these technologies, companies can enhance their competitiveness, lower costs, and increase customer satisfaction.

Focus on employee upskilling and retention

Besides cost-cutting, outsourcing also plays an important role in employees’ upscaling and retention: as a company outsources a part of its tasks and projects to its partners, this opens up a big avenue for the growth and skill-building of internal teams.

Moreover, with outsourcing, companies allow their employees to concentrate on their core responsibilities. This gives employees the time and space to focus on improving their skills and expertise in areas that directly contribute to the company's goals.

Working with outsourcing partners also exposes internal teams to new tools, technologies, and best practices. The inspiration for learning and subsequent adoption of such innovative practices can lead to better performance and productivity among employees.

Many outsourcing companies have training programs and workshops as part of their services. Internal teams can also avail themselves of these resources and get trained in building their skills to become more valued by the company.

With the help of your outsourcing partner, you can also enhance the level of retention. There are some retention strategies, that you can employ:

1. Engaged workforce: When employees see that they have opportunities for learning and growth, they are more likely to feel engaged and satisfied with their jobs. This engagement leads to higher retention rates, reducing turnover costs.

2. Career advancement: Upskilling through outsourcing can create pathways for employees to advance in their careers. When workers can develop new skills and take on more responsibilities, they are more likely to stay with their employer rather than seek opportunities elsewhere.

3. Adaptability to change: Companies need a workforce that can adapt quickly. By focusing on upskilling through outsourced training and collaborative projects, companies can build a more flexible workforce that is equipped to handle changes.

4. Increased job satisfaction: Employees who are given the chance to learn and grow feel more valued by their employers. This sense of value contributes to higher job satisfaction and loyalty, which are key factors in retaining talent.

Provide opportunities for upskilling and exposing employees to new knowledge, so that your company can enhance its employees’ skills while keeping them satisfied and committed to the company. This creates a win-win situation for both the business and its employees.

Benefits of staying ahead of outsourcing trends

Staying ahead of outsourcing trends is crucial for companies that want to maintain a competitive edge.

By proactively adapting to these trends, companies can unlock a range of benefits that drive growth, improve efficiency, and enhance innovation.

Preparing for the future of outsourcing

With the dynamic growth of business, each company needs to revisit its outsourcing strategy to be competitive and responsive in the market. We rounded up some actionable steps businesses could take to future-proof their outsourcing strategies by riding emerging trends of automation, AI, and cloud technologies.

1. Assess current outsourcing practices

Analyze your current outsourcing agreements and processes and look for their strengths, weaknesses, opportunities, and threats. Truly understand what works and what does not and identify areas that need improvement. Extract insights from your employees, customers, and partners regarding the effectiveness of current outsourcing strategies. Let this feedback shape your future course of action.

2. Use emerging technologies

Invest in Robotic Process Automation (RPA) and AI to automate repetitive tasks, reduce errors, and enhance operational efficiency. Understand how these technologies can be applied to your business's outsourced functions. Migrate to cloud-based services that enhance collaboration and scalability. Cloud platforms allow for real-time data sharing, accessibility, and scalability to meet changing demands.

3. Build strategic partnerships

Choose outsourcing partners that align with your company’s vision and values. Look for partners that are innovative, agile, and willing to evolve market changes, like Devico. Establish strong communication channels and collaborative frameworks with outsourcing partners. Align goals, preferences, and expectations to create a seamless working relationship.

4. Focus on skill development

Invest in training programs that enhance the skills of employees on the use of emerging technologies, data analytics, and digital tools. This prepares your workforce for the future and makes them less dependent on resources outside their own team. Create a culture of continuous learning and sharing of knowledge and access to resources within the industry through online courses, workshops, and conferences.

5. Establish flexibility and agility

Develop contracts that can allow flexibility in terms of services, timelines, and structures of pricing. This would enable quick turns on the occurrence of changed business needs or market conditions. Opt for outsourcing solutions that will easily expand and collapse with variable workloads or changing strategies in business. For instance, with the help of Devico, you can easily outsource any developer in less than a week.

6. Monitor and evaluate performance

Agree on clear key performance indicators (KPIs) and metrics by which the results of outsourcing will be measured, for instance, you could start with these:

• Cost per transaction: Calculate the cost incurred for each transaction processed by the outsourced team.
• Error rate: Track the number of errors or defects per transaction or project.
• Service-Level Agreement (SLA) compliance: Measure adherence to defined service levels (e.g., response times, quality metrics).
• Turnaround time: Measure the average time taken to complete a task or project.
• Employee productivity: Measure output per worker in the dedicated development team compared to in-house teams.
• Capacity utilization: Measure how well the outsourcing provider can scale operations to meet changing demands.
• Return on Investment (ROI): Calculate the financial return achieved from outsourcing efforts relative to the total investment made.

When selecting KPIs, it is crucial to engage relevant stakeholders to ensure the metrics reflect the priorities and goals of the partnership.

Regularly review data regarding performance levels against goals set. Continuous feedback mechanisms that exist between the teams and also between outsourcing partners, for continuously improving and implementing speedy changes if necessary.

7. Stay informed on industry trends

Commit to continuous research regarding outsourcing trends, emerging technologies, and changes in market conditions. Subscribe to industry reports, attend webinars, and join professional networks. Avail of the opportunity to get in touch with professional associations and forums on outsourcing, technologies, and best practices of industries. This might provide insight or expand your network.

8. Prepare for data security and compliance

Since outsourcing usually involves sharing sensitive data, the data security protocols must be available to protect both customer and business information.

Keep updated on relevant regulations and compliance requirements so that outsourcing practices are always in line with legal standards.

With these actionable steps in mind, businesses can future-proof their outsourcing strategies, ensuring they remain agile, competitive, and capable of leveraging evolving trends to drive innovation and efficiency. This proactive approach will ultimately lead to stronger partnerships, enhanced productivity, and improved company resilience in a dynamic market.

Conclusion

Preparing for the future of outsourcing is essential for every business aiming to thrive in a competitive market. Key points include evaluating your current practices, embracing new technologies such as automation and cloud solutions, and developing robust relationships with reliable outsourcing providers. This way, your company can remain agile and responsive to changes in the business landscape.

One of the most important aspects is choosing the right outsourcing partner. A trustworthy and innovative partner can significantly impact your operations, help you navigate complex challenges, and open doors to new opportunities. Their expertise can lead to improved efficiency, cost savings, and higher-quality outcomes for your projects.

If you're ready to enhance your outsourcing strategy, consider exploring Devico’s outsourcing services. We offer scalable, reliable, and cost-effective software development solutions tailored to your business needs. Let us partner with you to achieve your goals and drive your success forward!