Top IT outsourcing destinations of Eastern Europe: Market report

Modern technological revolution has fundamentally altered the way we live, work, and communicate. It creates golden business opportunities and brings disruption to every sector of the economy. An exponential increase in computing power and growing amounts of data fuels this transformation. AI, robot...

Top IT outsourcing destinations of Eastern Europe: Market report

Modern technological revolution has fundamentally altered the way we live, work, and communicate. It creates golden business opportunities and brings disruption to every sector of the economy. An exponential increase in computing power and growing amounts of data fuels this transformation. AI, robotics, big data, blockchain, Internet of Things, autonomous vehicles, 3D printing, VR and other technological breakthroughs offer endless possibilities to businesses.

The world’s data stock is doubling every 20 months, the number of Internet-connected devices has reached 20B, and mobile payments will soon top the $1T mark.

Companies are leveraging digital technologies to automate production, boost productivity, penetrate new markets, and satisfy ever-changing consumer needs. Digital skills are becoming the key to success of any organization. No wonder the demand for talented tech professionals rises along with the overwhelming need to embrace technological innovations.

The change is global. Yet the IT resources organizations need today are spread unevenly. That’s why, businesses often struggle to find the necessary expertise in the USA, the UK, the Nordic countries, India etc. This report aims to find out whether Eastern Europe can close this gap.

About this report

The main purpose of this report is to give a comprehensive overview of the Eastern European IT outsourcing industry as one of the most productive sectors of the region’s economy. The scope of the report uncovers the latest trends of IT outsourcing in Eastern Europe, and examines the current state of information technology in Ukraine, Poland, Belarus, Hungary, Romania, Czech Republic, Bulgaria, Moldova and in the Baltic region. It aims to help businesses, investors and decision-makers choose the most advantageous IT destination for mutually beneficial cooperation. We have also added examples of top IT outsourcing companies in Europe to ease your search for IT vendor.

N-iX has provided a wide array of software development services and cooperated with international clients for almost two decades. Therefore, we understand how challenging it is to navigate a global IT market. In this report, we try to cover major outsourcing trends and present a comprehensive overview of the IT market dynamics in the Eastern European and Baltic countries. We have collected the data from various sources including reports and surveys by PwC, Deloitte, Bloomberg, Tholons, A.T. Kearney, and more to inform you about the latest trends and challenges of the major software development destinations in this region.

IT outsourcing in Eastern Europe: executive summary

  • Eastern Europe remains one of the most attractive outsourcing destinations due to the constant growth of the IT industry and strong technological expertise.
  • Countries like Ukraine, Poland, and Romania are leading the Eastern European software development market, offering a vast availability of IT resources.
  • Poland has the largest IT talent pool in Europe (279,800 IT professionals), followed by Ukraine (184,700) and Romania (116,100).
  • Starting from 2014, we have witnessed a dramatic increase in outsourcing consumption due to its flexibility and perfect price-quality ratio.
  • IT outsourcing to Eastern Europe is now viewed as a major business enabler of digital transformation rather than just an attractive cost-cutting option.


  1. Business strategies in the digital age: how to access global talent
  2. Overview of the Eastern European IT industry
  3. IT industry overview: Baltic countries
  4. Afterword
  5. About N-iX

Business strategies in the digital age: how to access global talent

Choosing an effective method of accessing talents is one of the most strategically important decisions a company may arrive at. If done properly, any company can unleash a whole world of new innovations and digital possibilities. With this in mind, organizations weigh all the pros and cons of outsourcing and insourcing as the most widely-used cooperation strategies.

The GSA report states that nearly 70% of the companies are going to outsource more in the upcoming years. And nearly half of those plan to do it extensively. This will significantly impact the way we understand outsourcing:

  • It is more than just a simple cost-cutting solution. Businesses increasingly see outsourcing providers as partners for introducing innovations.
  • Companies are redefining the ways they enter into outsourcing relationships and manage the ensuing risks. Cyber security and industry regulations are now major risks outsourcing vendors manage to mitigate while fostering innovation.
  • Companies are changing the way they are managing their relationships with outsourcing providers. More and more often they enter into mutually beneficial partnerships enabling more transparent cooperation.

In what way is outsourcing bringing value to businesses?

  • creating a vibrant pathway for driving innovation;
  • allowing companies to focus on core competencies;
  • giving flexibility to change the size and scope of any IT activity;
  • offering a perfect price to quality ratio;
  • creating possibilities for implementing digital technologies;
  • presenting vast availability of all kinds of IT resources;
  • enabling easier and faster project scaling.

According to Stratistics MRC, global IT outsourcing market is expected to reach $481B by 2022 growing at a CAGR of 6.2%.

How technology is reshaping the global IT outsourcing market?

The ecosystem of outsourcing is constantly changing thus stimulating service providers to embrace new and cutting-edge trends to stay ahead of the curve. Industry experts predict that AI and machine learning will take place at the forefront of the outsourcing process providing its major advantages like direct cost reduction, speed and the enhancement of operating processes.

In the age of increased adoption of internet-connected devices, security and privacy remain the primary concerns for outsourcing vendors. According to IBM’s study, 25% of all enterprise applications are subject to at least 700 security vulnerabilities due to misconfigurations. With this in mind, companies outsourcing software development ensure that vendors follow the best security practices to mitigate risks of data breach.

A strong educational system that yields highly skilled workforce, capacity for innovation, favorable business climate, modern infrastructure, and moderate costs of services are some of the prime considerations that influence the choice of an outsourcing provider.

Overview of the Eastern European IT industry 

In today’s highly competitive and dynamic business environment, few decisions are as critical to the success of an organization as selecting a trustworthy partner. Most entrepreneurs, at some point, consider outsourcing to Eastern Europe to create fresh momentum by accessing skilled labor, reducing costs and pursuing new growth opportunities.

Eastern Europe remains one of the most vibrant software development destinations due to constant growth and development of its IT sector and a high level of digital technology adoption. Countries like Ukraine, Poland, Hungary, Belarus, Romania have already defined IT as a major catalyst for their sustainable growth and technological advancement.

So which country has the biggest talent pool and the strongest technological expertise for delivering projects of any scope and complexity?


Ukraine has emerged as one of Europe’s leading and fastest growing destinations for global software development services. According to 2019 CEE report, the country’s software development sector grew by 19% in 2018 and is progressing steadily year by year.

The country offers a wide array of benefits – from its vast IT talent pool and extensive expertise, cost effectiveness and strong technical education.

Over 1,600 companies in Ukraine provide a myriad of IT-related services. More than 184,700 IT professionals have developed strong expertise in different verticals ranging from fintech, healthcare to telecom, which helps the country maintain a competitive edge on the global IT market.

IT outsourcing in Ukraine, Europe

The country is home to more than 100 R&D subsidiaries of international companies from a variety of industries including software, gaming, telecoms, and e-commerce. Global companies like Microsoft, Samsung Electronics, Apple, Wargaming, Boeing, Skype, eBay, Siemens, IBM opened their R&D centers in Ukraine.

In addition, Ukraine is gaining weight in terms of IT industry recognition. The country was included in Gartner’s top 30 offshoring and outsourcing destinations and recognized among the top IT outsourcing destinations in Europe. What’s more, 18 Ukrainian IT companies, including N-iX, were featured in the 2018 Global Outsourcing 100  list by the International Association of Outsourcing Professionals (IAOP) as the best outsourcing providers.


Poland has one of the fastest growing economies, which makes it an attractive software development destination for outsourcing to Eastern Europe. The country has the largest working population in Central Europe, comprised mostly of people under 34 years old.

Over 279,800 Polish developers are involved in the IT sector along with 500+ IT companies offering software outsourcing services. Additionally, around 15,000 IT graduates enter the Polish software development market annually.

The country’s IT services market reached $4,62B in 2018 with a growth rate of 5.9% CAGR. Moreover, Poland was ranked 9th in Tholons Top 100 Outsourcing Destinations 2016 with Krakow and Warsaw as the major centers of the country’s IT development.

IT outsourcing in Poland, Europe

In addition, Polish R&D activities are becoming increasingly financed by the private sector thus fostering interest among global market players. For instance, companies like ABB, Google, Siemens, Motorola, Delphi Automotive, Intel, and McKinsey opened their R&D centers in Poland.

Czech Republic

The Czech Republic is another one top location for outsourcing to Eastern Europe. IT services industry is thriving with around 95,300 professionals employed in information and communication sector. Every year approximately 4,000 ICT graduates enter the market from Czech universities, bringing new expertise in-house.

The country is experiencing a 10% increase in IT outsourcing year over year. Czech IT industry growth is fueled by the strong inflow of high-value-added projects outsourced by IT companies in Europe, the US, and UK.

Such world-leading companies like Google, Microsoft, Oracle, IBM, CA, RedHat, Microsoft, Skype, NetSuite, Tieto, and IBM chose the country for both direct investment and outsourcing.  Moreover, internationally recognized IT brands like Avast, AVG and Socialbakers have their roots in the Czech Republic.

IT outsourcing in Czech Republic, Europe


The IT industry in Romania employs over 116,100 IT professionals and boasts 15% annual growth rate. In 2018 the IT industry growth has accelerated and reached $4.5B, with 13.4% CAGR of this industry. Also, export of software and IT services constitutes 1.9% of Romanian GDP.

After Romania joined the EU in 2007, its IT business has prospered and attracted global companies like Hewlett-Packard, Huawei, Ericsson, and Gameloft. Moreover, regional department of Microsoft in Romania runs two global business support centers in Bucharest and Timișoara and makes a significant contribution to the development of the country's tech industry. Additionally, Oracle employs more than 3,000 Romanian specialists.

IT outsourcing in Romania, Europe

Romanian government actively supports IT industry development by exempting software developers from the 16% income tax and introducing a number of incentives for local IT companies.


The Hungarian software development industry is one of the most dynamic sectors, representing about 6% of the country’s economy. The country has a large share of outsourcing within the IT market in Eastern Europe with around 80,100 specialists employed in the IT sector.

According to Hungary Information Technology Report, IT services sales are expected to grow from $760M (in 2016) to $993 M in 2020. Budapest remains the driving force behind the country’s development and is ranked 22nd in Tholons Services Globalization City Index in 2019.

IT outsourcing in Hungary, Europe

In addition, the country has attracted a number of multinational companies such as Siemens, Microsoft, Deloitte, Ericsson, Nokia, TATA, etc. to establish their R&D centers. The Hungarian government has doubled the amount of financial support for R&D sector for the 2016-2020 period and launched a number of incentives, giving fast access to technical knowledge by means of regular workshops, meetups, and conferences.


Belarus hosts 500+ IT companies with over 54,200 employees providing hi-tech outsourcing services to multinational companies. The country’s IT talent pool is constantly expanding with approximately 4,000 new software engineers graduating from 50+ higher educational establishments every year.

The total production and sales revenue of the IT industry in Belarus amounted to $3.4B in 2018. The exports of IT services in the country have been steadily growing over recent years at an annual pace of 10%.

IT outsourcing in Belarus, Europe

What’s more, some of Belarusian IT companies were included in the Software Magazine’s Software 500 ranking of the world’s largest software and service providers and were recognized by the International Association of Outsourcing Professionals (IAOP).


Bulgarian IT market capacity comprises almost 500 companies employing around 70,000 of specialists and this number is expected to reach 80,000 by the end of 2021. The country also benefits from the presence of the global IT giant – Hewlett-Packard, which employs more than 6,000 IT specialists.

Approximately 3,000 ICT graduates enter the market annually and more than 220 educational establishments offer diverse opportunities for technical students.

The country’s IT outsourcing sector generated $2.5B to the state budget and has been showing a double-digit revenue increase for the fourth consecutive year and reached 3.8% of the GDP.

IT outsourcing in Bulgaria, Europe

Bulgaria has a rather high number of R&D offices of multinational IT corporations such as HP, SAP, Johnson Controls, Oracle, VMware, CISCO, ProSyst, and Atos. Moreover, in 2015, the country was named “Offshoring Destination of The Year” by the UK’s National Outsourcing Association (NOA). Overall the BPO sector’s contribution to the country’s economy reaches almost 5%.


The Moldovan IT industry is one of the most dynamic sectors of the country’s economy and remains a priority area for development and expansion for the Moldovan government. The overall contribution of ICT to the national GDP reached 15,2% in 2018, which resulted in the creation of high value working places and improvement of employee retention within the country.

More than 11,000 specialists are involved in the IT sector with around 3,000 students graduating from Moldovan universities with degrees in computing or a related field every year.

IT outsourcing in Moldova, Europe

According to IDC, IT services market in Moldova is expected to grow at a 6.8% CAGR through 2018. Moreover, the total value of offshoring/nearshoring services reached $56M in 2013, and by 2018 it is expected to grow at a CAGR 14.5%. The ICT services exports reached more than $200M in the same period and are likely to double in the upcoming years.

IT Market overview: Baltic countries

The Baltic region is recognized as one of the most economically stable locations in Europe, boasting high levels of digital solution adoption and effective legislation that ensures data security. The launch of e-programs, ease of doing business, cyber security and low corruption rates foster IT industry development in the region.

Nevertheless, the pace of software development market growth and digital technologies adoption in Estonia, Latvia, Lithuania are still moderate compared to the Eastern European market leaders.


The ICT sector in Estonia employs around 20,700 specialists with less than 1,000 people graduating with degrees in technical disciplines every year. Estonian ICT services exports reached $4.17B in 2018. It constitutes 5.5% of the country’s GDP and increased by 1.5% compared to 2017 due to the value added in software development services.

IT is expected to become the leading sector of the economy and will constitute nearly 20% of the country’s total exports. Two major cities contribute the most to the development of the Estonian IT industry – Tallinn taking the lead (67.5%) and Tartu as a runner-up (12.5%).

IT outsourcing in Estonia, Europe

Estonia is known as the birthplace of Skype and TransferWise along with such influential startups as Pipedrive, Cloutex, Click & Grow, Grabcad, Erply, Fortumo, Lingvist, etc. Moreover, the country attracted such global market players as Microsoft, SAP, Acronis, Parallels to open their R&D centers.

According to Statistics Estonia, 17% of local enterprises have a formally defined ICT security policy and around 42% of them are engaged in the IT sector. This ICT security policy was developed mainly to avoid the potential risk of destruction or corruption.


Latvia ICT sector employs more than 18,600 specialists in 5,000+ companies. Approximately 700+ computer science students graduate every year from Latvian universities thus accelerating industry growth.

Latvia is often chosen for IT outsourcing in Eastern Europe. The ICT services turnover reached $3.98B in 2018. As a result, the information and communication technologies (ICT) sector has become the third largest exporter in Latvia, following timber and food products sectors.

IT outsourcing in Latvia, Europe

The evolution of the Latvian IT market led to the birth of such large IT service providers in the country such as Tieto, Evolution, Accenture Latvia, and Lattelecom Technology. Moreover, international companies like IBM, PwC, Accenture, KPMG, Siemens, ABB, etc. have already opened their R&D centers in Latvia.


Around 27,400 specialists are employed in the ICT industry in Lithuania, with additional 750+ future experts graduating every year. A lot of companies that consider IT outsourcing to Eastern Europe, choose Lithuania for both skilled experts and extensive technical expertise.

The country attracted the attention of Google, AIG, and Nasdaq which decided to set up their regional development centers. Moreover, such global companies as Uber, IBM, Wix, HP, Virtustream, Exadel, and Unity have already opened their R&D and IT development centers in Lithuania.

IT outsourcing in Lithuania, Europe

On the whole, IT companies in Lithuania have received substantial investments over the past years, which stimulated the growth and development of the IT industry within the country.


The collected data reflects dynamic growth of the IT market across Eastern European countries. This region has become a number one choice for many global companies looking for a software development partner due to its solid talent pool, technological excellence and great price-quality ratio.

Countries like Ukraine, Poland, and Romania are taking the lead, offering a myriad of cutting-edge technology-related services. Poland has the largest tech talent pool with 279,800 IT specialists. Ukraine remains one of the leading destinations for IT outsourcing in Europe, boasting the second largest talent pool with around 184,700 IT professionals and estimated IT market growth of 15-20% year by year. Romania has 116,100 IT specialists. The Czech Republic and Hungary have also attained a competitive position among top 5 Eastern European outsourcing destinations in terms of IT market capacity and annual industry growth rate of 10-15%.

On the contrary, countries like Moldova, Bulgaria, and Belarus are falling behind market leaders in terms of innovation adoption and overall technological capacity. Nevertheless, they’ve introduced a number of incentives to attract foreign investments and foster IT industry development. Meanwhile, Baltic countries launched a number of e-programs and created a favourable business environment in the region.

About N-iX

N-iX is one of the leading IT outsourcing companies in Europe with development centers in Ukraine (Lviv, Kyiv), Poland (Krakow), Bulgaria (Sofia), Belarus (Minsk), and offices in the USA (Florida) and Sweden (Malmo). With more than 17 years of experience and 1,000+ technical experts, the company has developed diverse technological expertise.

N-iX partners with technology leaders across a variety of industries encompassing Fintech, Telecom, Healthcare, Insurtech, Automotive, Hospitality, Media & Entertainment, Aviation etc. to help them effectively implement digital transformations.

N-iX provides a wide array of services in different verticals such as big data analytics, data science, BI, AI, blockchain, cloud solutions, VR & AR, enterprise mobility, embedded software, SAP and OpenText consulting, and much more.

The company has formed strategic partnerships with a number of global businesses including Lebara (renowned telecom brand), Currencycloud (global payments platform), Gogo (world’s leading in-flight connectivity provider), to name a few. N-iX has cooperated with over 50 clients across the globe such as OpenText, StreamServe, Novell, Anoto, RateSetter, HotSchedules etc.

The accumulated expertise allows N-iX to offer innovative software solutions to its clients enabling them to reach their digital ambitions.

For more information, connect with our experts.


  1. Software Development CEE Report
  2. State of European Tech 2018
  3. Software development in Ukraine: 2019-2020 IT market report
  4. A.T. Kearney 2019 Global Services Location Index
  5. Tholons Services Globalization City Index in 2019.
  6. Bloomberg Innovation Index 2019
  7. World Bank Group. Doing Business Report 2019
  8. The World Bank. ICT Service Exports
  9. Tertiary education graduates: main subject areas by Eurostat
  12. Global software marketplace insights: Eastern Europe by SourceSeek
  13. Bulgarian Outsourcing Association Report 2018
  14. Tech Ecosystem Guide to Ukraine
  15. Gartner. Offshore/Nearshore Countries for Outsourcing in EMEA, 2017
  16. Top 100 City Destinations 2018 by Euromonitor



By N-iX June 20, 2019

About N-iX

N-iX is an Eastern European provider of software development services with 1000+ expert software engineers onboard that power innovative technology businesses. Since 2002 we have formed strategic partnerships with a variety of global industry leaders including OpenText, Novell, Lebara, Currencycloud and over 50 other medium and large-scale businesses. With delivery centers in Ukraine, Poland, Bulgaria, and Belarus, we deliver excellence in software engineering and deep expertise in a range of verticals including finance, healthcare, hospitality, telecom, energy and enterprise content management helping our clients to innovate and implement technology transformations.

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