6 Successful Companies That Outsourced Development

Not merely a strategy for cost reduction, outsourced IT services, particularly in software outsourcing, can substantially fuel innovation and growth in entities ranging from early-stage startups to major corporations. Indeed, IBM data reveals that a mere 27% of companies employ outsourcing as a cost-cutting tool. In contrast, a larger proportion, 36%, leverage the skills of external developers through outsourced IT services to stimulate innovation and enhance their business development.

Companies of all sizes can benefit from an outsourced development team, who may bring a fresh perspective and new ideas, exactly when they are needed, without burning through all available capital.

6 Major Companies That Outsource

You may be surprised to learn that some of the world’s most successful companies, including Alibaba, Slack, and Skype, used outsourcing to get started, or even continue to outsource part of their development today.

Here are six highly-successful companies that have used outsourcing for their software development to grow their business.

#1 Slack

The web interface of this favorite corporate communication tool was designed mainly by MetaLab, a design firm. Not only did MetaLab refine the design of the messaging app that is nearly ubiquitous for startup teams, but it also redesigned their logo and website.

After the American multinational technology company’s meteoric success, several other companies, including Brit+Co and Coinbase, have contracted MetaLab to build original brand content.

#2 GitHub

GitHub is now an essential platform for developers to document, share, and edit private code, but an outsourcer built much of its back-end. The current CIO of GitHub, Scott Chacon, met GitHub CEO and co-founder Chris Wanstrath at a Ruby on Rails meetup in San Francisco, where the latter realized Scott’s impressive knowledge of Gits.

While the GitHub team didn’t have enough money to hire Scott full-time, they contracted him to write Gist, GitHub’s sharing feature, which continues to be an essential feature for the platform.

#3 Skype

While video conferencing is now commonplace, Skype was a pioneer of video calling in the early-2000s. None of their success would have been possible without three Estonian developers, Jaan Tallinn, Ahti Heinla, and Priit Kasesalu, who developed the app’s entire back-end.

While the programmers were eventually integrated as partners, their work as an outsourced team allowed the product to become a common tool for businesses worldwide. Skype was ultimately acquired by Microsoft for US$8.5 billion.

#4 App Sumo

Serial entrepreneur Noah Kagan founded AppSumo for just US$50. The site, which provides daily deals on software, began with a simple PayPal button and credit card form, which Kagan purchased from a developer for a small sum. Using his previous experience at Facebook and Mint.com, Kagan was able to boost the site’s early growth using favors from influential entrepreneurs to get ad placements.

Kagan claims that having a strong concept allowed him to outsource the core development and create a cohesive product from the start.

#5 BaseCamp

BaseCamp is made by a remote team, for remote teams. The popular project management software, originally an offshoot of web consulting agency 37Signals, was growing slowly after its launch in 2004. To move the app along, the founders, Jason Fried, Carlos Segura, and Ernest Kim, outsourced the development and refining of the app to freelance developers.

As it began to gain steam, they moved over to work on BaseCamp full-time and now employ 50 people in 32 countries.

#6 Alibaba

Alibaba is now the world’s largest online marketplace, but it could not have gotten started without the help of developers in the US. According to Alibaba: The Inside Story Behind Jack Ma and the Creation of the World’s Biggest Online Marketplace, Jack Ma outsourced much of the site’s early development to a firm in the United States, since talent was hard to come by in China and internet restrictions made finding local programmers next to impossible.

By outsourcing the back-end development of Alibaba, Jack Ma was eventually able to compete with established giants like eBay and Amazon on the global market.

Outsourcing with BairesDev

Here at BairesDev, we work with tech clients from around the world to support their development and growth through software outsourcing, UX/UI design, and QA testing. Companies like Google, Sirius XM, Square, IBM, and Univision have realized the effectiveness of combining in-house tech talent with outsourced developers to grow faster and take on new and innovative projects. These companies, and many other outsourcing examples,  have trusted us to take on some of their most critical projects with the help of our talented developers.

For example, we work with Google, one of the largest internet companies in the world, by providing experts in Software Engineering and QA Automation projects. BairesDev engineers ensure the quality of some of the most relevant Google products such as the Google Search app for Android and iOS, Google Assistant, YouTube and Google+. Even the powerful tech companies like Google benefit from the support of a talented, outsourced team that helps them develop, test, and launch their most popular products.

Companies that outsourced development know that it’s much more than a cost-cutting tool. While hiring a freelance developer or an agency abroad can extend a startup’s runway, some of the most successful companies are also using outsourcing to develop their core products and to bring fresh ideas to the table. Companies with established development teams occasionally bring outsourced developers to complement and build on new projects. Outsourcing is a versatile tool that can boost the bottom line of companies big and small.

What are the key benefits of outsourcing IT services?
Outsourcing IT services offers cost savings, access to global talent and advanced technologies, increased efficiency and flexibility in scaling operations. It allows businesses to focus on core activities while external experts handle IT needs.

How do you choose the right software development outsourcing company?
Selecting the right company involves evaluating their expertise, portfolio, client testimonials, and compliance with industry standards. Communication practices, language skills, and cultural alignment are also crucial factors to consider.

What is the typical cost structure for outsourcing IT services?
The cost structure usually includes a fixed pricing model, time and material model, or a dedicated team model. It can vary based on the complexity of services, expertise level required, and the geographical location of the outsourcing company.

How does working with outsourcing companies impact internal team dynamics?
Outsourcing can lead to enhanced focus and productivity in internal teams as routine tasks are offloaded. However, it’s essential to maintain clear communication and set expectations to ensure a collaborative environment and prevent any feeling of job insecurity among internal staff.

Can outsourced IT services help in scaling a business?
Yes, outsourced IT services provide scalability and flexibility, enabling businesses to adjust quickly to market demands without the constraints of in-house resource limits. It’s an efficient way to access specialized skills and technological expertise as needed.

How does IT outsourcing align with the overall business operations and strategy?
IT outsourcing aligns with business strategy by enabling more efficient resource allocation, cost management, and focusing on core competencies. It supports strategic goals like digital transformation, market expansion, and innovation by providing access to advanced technologies and skilled professionals.