Everything you need to know about outsourcing software development — how it works, what it costs, how to choose a partner, and the mistakes that kill projects. Written by a studio that's on the other side of the table.
What is software development outsourcing? Software development outsourcing is the practice of hiring an external company or team to build, maintain, or extend software — rather than doing it in-house. The external team can be located in the same country (onshore), a nearby country (nearshore), or a different continent (offshore). Outsourcing covers everything from building a full product to augmenting an existing team with specialized skills.
We're writing this from the other side of the table.
Hunchbite is a software development studio based in Bangalore, India. Companies outsource to us. We see every mistake, every miscommunication, and every project that goes sideways — because we're the ones who get the call when it does.
This guide isn't a sales pitch for outsourcing. It's an honest breakdown of when it works, when it doesn't, and how to do it right.
The reasons are simpler than most articles make them:
1. Cost efficiency A senior full-stack developer in the US costs $150,000–$200,000/year with benefits. The same skill level in India costs $30,000–$60,000/year. That's not a quality difference — it's a cost-of-living difference. The math is straightforward.
2. Speed to market Hiring in-house takes 2–4 months per developer. An outsourced team can start in 1–2 weeks. When your launch timeline is tied to a funding round, a market window, or a competitive threat, speed matters more than control.
3. Access to specialized skills You need a React Native developer for 3 months, not 3 years. Or a team that's built 10 e-commerce platforms, not one that's learning on your dime. Outsourcing gives you access to specific expertise without permanent headcount.
4. Focus Your team should be doing what only your team can do — understanding customers, making product decisions, building competitive advantage. The implementation can be delegated.
5. Risk distribution A fixed-price outsourcing engagement shifts execution risk to the vendor. If they quoted 2 weeks and it takes 4, that's their problem. (Assuming you structured the engagement correctly — more on that below.)
You get developers who work exclusively on your project, usually full-time. They integrate with your existing team, use your tools, and follow your processes.
Best for: Long-term projects, companies with strong technical leadership, teams that need to scale quickly.
Watch out for: You're still managing the team. If you don't have a technical lead, a dedicated team is just more people to manage poorly.
You define what needs to be built, the vendor quotes a price and timeline, and they deliver it. This is how we work at Hunchbite.
Best for: Well-defined projects, MVPs, specific features, companies without technical leadership.
Watch out for: Scope must be clear upfront. Vague requirements + fixed price = disaster for both sides.
Some combination — maybe a project-based MVP followed by a dedicated team for ongoing development. Or a core in-house team augmented with outsourced specialists.
Best for: Companies that are scaling and need flexibility.
Let's talk real numbers, not ranges designed to make you fill out a form.
| Region | Junior Developer | Mid-Level | Senior Developer |
|---|---|---|---|
| United States | $100–$150/hr | $150–$200/hr | $200–$300/hr |
| Western Europe | $80–$120/hr | $120–$180/hr | $180–$250/hr |
| Eastern Europe | $40–$70/hr | $60–$100/hr | $80–$150/hr |
| India | $20–$35/hr | $35–$60/hr | $50–$90/hr |
| Southeast Asia | $15–$30/hr | $30–$50/hr | $40–$70/hr |
| Latin America | $35–$60/hr | $50–$80/hr | $70–$120/hr |
A typical web application (user authentication, dashboard, API integrations, admin panel) costs:
| Model | US Agency | Eastern Europe | India (Quality Studio) |
|---|---|---|---|
| Simple MVP | $40K–$80K | $25K–$50K | $8K–$20K |
| Standard product | $80K–$200K | $50K–$120K | $20K–$60K |
| Complex platform | $200K–$500K | $120K–$300K | $50K–$150K |
The asterisk nobody mentions: The cheapest quote is almost never the cheapest total cost. We've rebuilt more projects from $5/hr freelancers than we can count. Quality studios in India offer 60–70% cost savings over US agencies with comparable quality. Bottom-of-market vendors offer 90% savings and then you spend the savings on fixing their work.
1. Portfolio relevance Have they built something similar? Not "we do everything" — specifically, have they built the type of thing you need? A studio that's shipped 10 e-commerce platforms is a better bet for your e-commerce project than a "full-service agency" that's built one of everything.
2. Communication quality This is the #1 predictor of outsourcing success. During your first call, evaluate:
3. Process transparency How do they work? What does a typical week look like? How do they handle change requests? What tools do they use? If they can't answer these clearly, they don't have a process.
4. Technical depth Ask them to explain a technical decision from a past project. "We chose PostgreSQL over MongoDB because the data relationships were complex and we needed ACID compliance" tells you something. "We use the latest technologies" tells you nothing.
5. Reference checks Talk to their previous clients. Ask: "Would you hire them again?" and "What was the worst part of working with them?" The worst part answer is more revealing than any testimonial.
Read our detailed guide on red flags when hiring a developer for a complete checklist.
Before any code is written, align on:
The output should be a written document both sides sign off on. We have a guide on how to write a software development brief that covers this in detail.
The vendor should provide:
Non-negotiable: You own all the code, design, and documentation from day one. No proprietary frameworks. No lock-in.
Expect:
The vendor should provide:
The $5,000 quote and the $25,000 quote are not the same product. One is a template with your logo; the other is custom software built for your specific needs. Know what you're buying.
If nobody on your side can evaluate code quality, you won't know the project is going sideways until it's too late. Either hire a technical advisor, commission a code audit at milestones, or choose a vendor whose process includes quality checks.
"Can you also add..." is the most expensive phrase in software development. Every addition has a cost. A good vendor will tell you the impact of changes on timeline and budget. A bad vendor will say yes to everything and deliver nothing well.
Weekly check-ins are not enough. If you don't see working software for two weeks, something is wrong. Daily standups or written updates are standard practice.
What happens when the project is done? Who maintains it? Where's the documentation? If the vendor disappears, can another team pick up the code? These questions need answers before the first line of code.
We're biased — we're based in Bangalore. But we'll be honest about both sides.
Read our detailed guide on outsourcing to India for the full picture.
Be honest with yourself:
If you're considering outsourcing a project:
Or book a free discovery call with us. We'll give you an honest assessment of whether outsourcing makes sense for your specific situation — even if the answer is "don't outsource to us."
If this guide resonated with your situation, let's talk. We offer a free 30-minute discovery call — no pitch, just honest advice on your specific project.
Practical frameworks for managing remote and outsourced developers — communication cadences, tools, milestone structures, and the common mistakes that derail outsourced projects.
11 min readguideA clear comparison of nearshore, offshore, and onshore software development — real cost differences, timezone implications, communication trade-offs, and when each model works best.
11 min read