In our fast-paced business world, Eastern Europe is becoming a more and more attractive IT destination and provides a myriad of opportunities for companies that are looking for a remote software development team. Hungarian and Ukrainian  developers are chosen as outsourcing providers by many European and US companies because of numerous factors, such as the qualifications and experience of specialists, strong educational background, attractive prices, rich talent pool, etc. We’ve decided to compare these countries as some of the most promising IT outsourcing centers in Eastern Europe.

 Global Information Technology Report 2016

Source: The Global Information Technology Report 2016

*On the polar chart above an orange line shows the economy’s score on each of the 10 pillars. The gray line indicates the average score of all economies in the income group to which the economies under this review belong (the country classification by income group is defined by the World Bank and reflects the situation as of July 2015).

Availability of talent

Undoubtedly, every business owner is looking for mature and highly skilled software developers that are open for cooperation and can work globally with any client.

In Hungary software development  is one of the most dynamic industries, representing about 6% of the Hungarian economy. Around 80,000 people work in the IT sector in this country. In addition, there are many R&D centers of different international companies in Hungary including Siemens, Microsoft, Ericsson, Nokia, TATA, etc.

Ukraine can boast of about 90,000 IT professionals. It has more developers engaged in IT outsourcing than any other country in Central and Eastern Europe, and this number is growing rapidly year by year. More than 100 R&D centers of global companies such as Cisco, Dell, Microsoft, Bloomberg, Ericsson, Boeing, Oracle, Siemens and many others are situated in Ukraine. Furthermore, many famous startups such as Looksery (bought by Snapchat for USD 150 mln), PetCube, Grammarly, Viewdle (bought by Google Inc. for about USD 45 million), Preply, Clickky, and others have all started in Ukraine.

Educational system

Ukraine is famous for its strong technical universities. At the moment, there are around 402 institutions and more than 39 of them maintain IT related programs. About 35% of students choose IT related subjects and thousands students graduate each year with certificates in IT disciplines.

In Hungary, there are 67 institutions with over 21,000 IT students. Four universities are mentioned in the respected QS World University Rankings (it is thought to be the most widely read university ranking including the world’s top 800 universities). However, according to the Global Information Technology Report 2016, Ukraine is ranked 37 positions higher than Hungary as a country with better quality of math and science education.

Cost of services

In terms of saving costs without neglecting the quality, Ukraine is one of the most attractive countries in Europe due to its moderate prices. To get a basic idea of the difference between development cost in Ukraine and in Hungary, you can go through the rates on Elance. However, it’s worth mentioning that this is a freelance platform. So if you are looking for a reliable provider that has been on the market for quite a while, the rates will be higher.

The average price for freelance IT services in Ukraine is in the $40-50/hour range, whereas the highest cost, over $100, is charged by only 0.4% of the respondents. Hungary has more developers that charge more than $40/hour and 4,8% of these specialists charge more than $61/hour of work. Thus, development services are much more affordable in Ukraine.


Cooperating with a country that is located nearby and in the same time zone is undoubtedly a valuable advantage. Hungary is situated within two hours by air from most major European capitals and its time zone is GMT+1.

Ukraine is within 2-3 hour flight from most European countries and it is located at the crossroads of the Europe – Russia – Central Asia – Middle East trade routes in the GMT+2 time zone. The nearby location gives Hungarian and Ukrainian developers the ability to provide quality services to the US and Europe and makes business and social communication much easier. Both countries have many international airports with good connections to European, Asian and North American countries. However, Ukraine has a bigger number of IT hubs and regional IT clusters.

Kyiv vs. Budapest

Budapest and Kyiv are two capital cities and the biggest IT centers in their countries. Budapest is thought to be one of the most influential cities in Europe and is ranked 24th in Tholons Top 100 Outsourcing Destinations 2016. Moreover, many multinational companies have established their IT centers in Budapest (such as Vodafone, Lufthansa, British Petroleum, General Electric, Deloitte, Systemax, etc.).

Meanwhile, Kyiv attracts many developers for relocation from other parts of Ukraine and it concentrates a big amount of talent due to highly developed IT and engineering industries and infrastructure, which makes it a perfect outsourcing destination. More than 15,000 highly qualified IT professionals graduate every year with certificates in technical disciplines. In addition, over 40,000 developers work in IT sector in Kyiv.


Keeping up-to-date knowledge about innovations on the IT market is of top priority for all good outsourcing providers. According to Bloomberg’s 2015 list of Top 50 Most Innovative Countries, Ukraine notably improved its position in the overall ranking and now holds the 33rd place. Hungary holds 32nd place, which means that both countries are innovation-friendly. They both have many local innovative companies that operate on international markets and are regarded as leading innovators in respective fields worldwide.

Business environment

Business environment is very important in terms of productivity, image and growth of any company. In order to improve the business climate, countries take a number of actions every year. For example, the Hungarian government has doubled the amount of financial support for R&D sector for the 2016-2020 period and entered into strategic partnership agreement with numerous companies, giving fast access to the government by means of workshops and regular consultations.

Meanwhile, Ukraine has taken a major step forward in improving its business climate with the appointment of a Business Ombudsman Council for the country’s Anti-Corruption Initiative that was established in May 2016 and increased the financial assistance of the United States. As a result of sustained progress, Ukraine’s Ease of Doing Business ranking improved and is now four spots up compared to last year.


IT industry development

Ukraine has over 1,000 IT service providers. It also holds the 4th position in the global rank by the number of IT professionals which is expected to increase from 90,000 to 200,000 by 2020. Ukraine’s  software development exports industry is assessed at $2.5 billion (in 2015) and it grows rapidly every year. On top of that, A.T. Kearney Global Services Location Index ranks Ukraine 24th which is 17 positions higher compared to the last year’s result. Plus, over 40% of Ukrainian IT specialists have upper-intermediate and advanced English knowledge levels, which enables smooth communication and cooperation with international clients. Furthermore, the export volume of Ukraine’s software development and IT services reached $2.5 billion in 2015 and is showing double-digit growth year after year.

Hungary has a 25% share of outsourcing within the IT market in Eastern Europe. According to Hungary Information Technology Report, IT services sales are expected to grow from USD 760 mln (in 2016) to USD 993 mln in 2020. In addition, A.T. Kearney Global Services Location Index ranks Hungary 32nd, which is one position lower compared to the last year’s Index.

All things considered, Hungarian and Ukrainian developers are keeping up with the latest innovations in the industry successfully applying them in practice. Ukraine has a powerful innovation sector of the economy and it is undergoing major reforms which are mowing forward the idea of joining the EU. In addition, Ukrainian government is supporting the IT market by encouraging new investments which leads to the instant growth of the IT talent pool. Depending on the factors that are crucial for your business, you may decide which of them is better for you and choose the best IT outsourcing provider.