The demand for custom software development is skyrocketing as the attention has shifted from generic solutions to business-specific ones. However, cost and expertise remain major factors in such decisions. This rationalizes why many leading enterprises and growth-oriented start-ups are willing to hire developers in India, Philippines, and other such countries with cheaper resources.

Businesses are embracing the practice of outsourcing. As per the reports from Computer Economics, many corporate giants and multinationals have increased the percentage of their IT software budgets spent on outsourcing from 6.3% to 8.7% in 2022 while startups and medium-sized companies have increased from 4.7% to 6.5%.

And there are no signs of slowing down for outsourcing!

This staggering growth indicates that the market has accepted it as a result-driven strategy that will dominate the tech-dominating landscape. Let’s understand the importance of software development outsourcing and futuristic trends that could disrupt the industry in 2022.

Software development outsourcing & its importance

Software development outsourcing refers to the practice of hiring third-party software developers or a business to build custom software development solutions. They act as a fruitful business partner that can play a major role in a company’s growth. Developing software solutions is no longer a daunting task for small and medium-scale businesses- thanks to the flexibility of outsourcing custom software development.

Businesses also seek outsourcing services to reduce costs, provide a seamless customer experience, and gain a competitive edge. On top of that, outsourcing may offer abundant benefits. These include enhanced efficiency, improved quality of operations, faster turnaround, reduced potential bottlenecks, and more.

The outsourcing industry continues to grow; naturally, there is a wave of outsourcing trends that could disrupt the market in 2022 & beyond.

This brings us to the top 5 software development outsourcing trends to follow in 2022 that companies must adhere to make their business ready for upcoming technologies.

List of top software development outsourcing trends in 2022

The latest software development outsourcing trends are geared to deliver flexibility, better sustainability, and technological advancements. Let’s look at the top software development outsourcing trends in 2022.

Accelerated use of Cloud services

The scope of digital products, especially software development solutions, is soaring and thus, companies may employ overseas developers to carry out their assigned tasks. These developers shall look for collaboration to facilitate seamless cooperation within the department.

When it comes to communication and collaboration, having a cloud platform is inevitable. Because data is a critical component in every organization, cloud-based technology might aid in the quick recovery of files in any mishap. This would prevent prolonged downtime and allow businesses to continue normally.

The demand for cloud services is rising as Gartner said that over 80% of companies will embrace cloud services by 2025 & nearly 90% of workloads will be deployed on cloud platforms. Since cloud services mitigate multiple issues, migrating the infrastructure to cloud platforms like AWS, Microsoft Azure, and Google Cloud will be a boon for companies.

Cybersecurity will be the center of attraction

Protecting the ever-increasing footprints of digital organizations is a necessity. Cyberattacks like ransomware and denial of service (DDoS) are a critical threat to a business's digital infrastructure. Also, continuous change/update in technologies becomes troublesome for companies to cope with, making them an easy target for hackers.

To prevent such malicious attacks, security mesh architecture will help organizations reduce the financial impact of individual attacks by 90%, as per the reports by Gartner.

But competent tech experts are scarce (at least at the prices most small and medium enterprises can afford) with strong analytical skills to fight cyberattacks. It has driven companies to hire the right professionals that may find gaps, accelerate cybersecurity infrastructure and improve it with appropriate solutions.

Thus, this outsourcing trend will gain huge traction among banks, government establishments, eCommerce stores, and more.

Hike in Artificial Intelligence (AI) & Machine Learning (ML)

The third and most important driver of digital transformation is AI & ML!

Though the technologies are still under development, they played a major role in developing COVID-19 remedies and vaccines by mimicking human intelligence and harnessing voluminous data to identify patterns and insights. Even now, these under-moderated technological frameworks have already helped hospitals and healthcare departments detect serious health ailments like strokes, renal failure, etc. With the potential for near-to-accurate prediction, sentiment detection, and time-saving capabilities, AI/ML has garnered the attention of many businesses.

For instance, Google uses Google Lens to identify text in images and trigger a search for any segment of that text. Also, Gmail uses a smart reply feature to predict what the user will compose based on the previous email received.

Organizations are consistently automating tasks for better accuracy and to achieve results.

Such revolutionary technologies are deemed to be a tool that may help automate software testing and improve it efficiently to an unprecedented scale. This has led companies to look for dedicated ML/AL experts to significantly cut the time needed for development-related tasks like testing and debugging.

Huge demand for IoT

Most businesses believe the Internet of Things (IoT) is just an “over-hyped” term but it’s a tool for a successful business.

The market value of IoT technology is likely to increase to $1.40 trillion by 2026.

The major highlight of IoT is that it functions well even when connectivity to the cloud is affected and utilizes less bandwidth by collecting and processing data locally. When cloud participation is significantly decreased, it would ultimately minimize the overhead connectivity costs and facilitate optimal security practices.

IoT outsourcing will skyrocket as companies are struggling to hire qualified staff to meet their product development needs. Outsourcing would eventually help organizations to bridge this skills gap by giving access to talent across the world.

Some examples of Industrial IoT devices are beacons, RFID Tags, sensors, etc, while consumer IoT devices include wearables, healthcare devices, connected cars, and smart homes.

Blockchain technology

Although blockchain has recently gained immense popularity, it is not a novel technology. It has already been deployed across industries like healthcare, supply chain, decentralized finance, and more.

The technology assists blockchain development in substantial advancements in the development stage. Before the transactions are recorded on the blockchain, the software verifies their authenticity. Thus, blockchain creates a secured system where the data is deemed legitimate.

Furthermore, it eliminates intermediaries that help businesses to reduce transaction costs and potential human errors from the scenario.

Its popularity is so widespread that the global blockchain market may reach $15.88 billion by 2023.

Whether it’s about bringing transparency and traceability or getting rid of middlemen, implementing blockchain into businesses is inevitable!

Final thoughts

That’s a wrap to the top software development outsourcing trends in 2022 that will shape the business strategies.

Despite many hindrances, businesses cannot adhere to every digital transition due to a lack of resources and manpower; thus, they choose to outsource. These trends will act as stepping stones for an organization to implement more digital initiatives and transformation projects. Businesses should hire full stack developer in India that may help them at every stage of the software development process from conceptualization to implementation.