In our series about Eastern European outsourcing, we discuss essential criteria of choosing a destination, as well as the pros and cons of every country. In this article, we are going to compare IT outsourcing in Bulgaria and Ukraine, focusing on:
- Dynamics of IT market and business climate;
- Availability of the tech talent for successful IT outsourcing to Bulgaria or Ukraine;
- Availability of tech partners to choose from.
One of the most critical aspects is the attractiveness of the chosen outsourcing destination for business. Besides cost-efficiency and a large tech talent pool, companies should know about the local IT industry, ease of doing business there, and the country's policies to support investors.
Comparison of IT outsourcing in Bulgaria and Ukraine
As of 2020, the turnover of Bulgarian IT industry has reached $1.7B in 2020, becoming a 2.76% share of Bulgarian GDP. Moreover, around 69% of Bulgarian IT professionals work in local private companies. The country has a rather high number of R&D offices of multinational tech giants like HP, SAP, Johnson Controls, Oracle, VMware, CISCO, ProSyst, and Atos.
The Ukrainian IT outsourcing market reached $4.53B, with over 3.3% of the country’s GDP. The majority of software development companies work for clients abroad (USA, UK, Europe, and Canada). The country has over 100 R&D centers of global companies from a variety of industries, including software, gaming, telecoms, and e-commerce. This list includes companies such as Microsoft, Samsung Electronics, Apple, Wargaming, Boeing, Skype, eBay, Siemens, IBM, and others. Also, such global tech companies as PetCube, Grammarly, DepositPhotos, Jooble, Viewdle (bought by Google Inc. for about $45M), CleanMyMac have all started in Ukraine.
The Bulgarian government is aiming to improve the country’s business environment by offering a range of incentives for foreign investors. The country currently has one of the lowest rates of personal income tax in the European Union, and it provides fiscal citizenship to foreign nationals who work in Bulgaria. IT outsourcing to Bulgaria has improved the country’s score in many rankings. In 2015, Bulgaria was named “Offshoring Destination of The Year” by the UK’s National Outsourcing Association (NOA). Among other notable achievements is the 17 place on Global Services Location Index in the 2021 A.T. Kearney ranking, as well as improved Ease of Doing Business score.
Ukraine’s business environment is evolving quickly. Starting a business is now much easier due to the simplified taxation system and improved registration procedures. As a result, Ukraine moved up 20+ positions since 2014 in the World Bank’s Ease of Doing Business 2019 ranking (71 position). Moreover, the World Economic Forum ranks Ukraine 68 out of 140 countries in its Global Competitiveness Index, with high scores in education, business sophistication, healthcare, and innovation. Local authorities recognize the need to support and develop the Ukrainian IT-industry as a strategically important area for the country’s evolution.
Another crucial aspect of IT outsourcing is the availability of experts in the chosen location. In terms of software development outsourcing, Bulgaria and Ukraine both have a decent tech talent pool of experts.
Bulgarian reports claim that there are over 100,000 ICT professionals, and almost 30,000 of them are working in IT outsourcing in Bulgaria. The Ukrainian ICT pool has reached 297,800 experts, with almost 141,000 working for IT outsourcing and outstaffing companies. Both countries are known for highly-skilled developers, whose expertise has been recognized by many rankings.
Most popular technologies in Bulgaria and Ukraine
In Bulgaria, JS is the most popular programming language, followed by Java C#. Ukrainian IT industry seems to have a bigger interest in Java and JS, as well as C#, C++ and Python. It would be easy enough to find Bulgarian dedicated developers with almost any tech specialization.
Both countries also have a fair share of cloud and DevOps experts, along with solid embedded expertise.
Tech education in Bulgaria and Ukraine
Every year, nearly 2,200 IT specialists graduate from Bulgarian universities. Around 220 high schools offer tech courses, including software engineering, information technologies, and other IT-related subjects. Bulgarian IT industry has a significant impact on higher educational institutions, encouraging them to launch new courses. Thus, more than 15 Bulgarian universities included ICT classes as a part of their educational programs. Among the most renowned institutions that provide IT education are the Technical University of Gabrovo, Technical University of Sofia, Technical University of Varna, etc. Moreover, many Bulgarian students study English as a compulsory subject, which contributes to the overall high English proficiency in the region.
Ukraine has a strong tech education with more than 26,200 highly qualified ICT graduates and more than 23,000 engineering grads every year. Many of the 400+ educational institutions have IT-related programs. The most famous universities with tech programs are National Taras Shevchenko University of Kyiv, National Technical University of Ukraine “Kyiv Polytechnic Institute”, V. N. Karazin Kharkiv National University, National Technical University of Ukraine "Igor Sikorsky Kyiv Polytechnic Institute, and Lviv Polytechnic National University. Many Ukrainian universities have also launched IT programs in IoT, Artificial Intelligence, Data Science, etc. Most Ukrainian developers have a good command of the English language, despite the moderate English proficiency of the general population.
Bulgarian IT industry is the home to 190+ software development companies. However, there are only 11 companies with 250-999 employees and three vendors that employ 1,000+ IT professionals. These companies work with clients in various domains, including banking, healthcare, and education.
The Ukrainian software development market has a larger number of companies, which represent different domains. Clutch lists 870 companies, with 15 of them in the leaders’ matrix. These companies have expertise in banking and finance, security, travel & tourism, etc.
Major IT hubs in Bulgaria and Ukraine
Bulgaria and Ukraine are known as convenient nearshoring options for European countries, as well as great options for companies from the UK and US. Both countries are located within the same time zone (GMT+2), so both Bulgarian and Ukrainian developers are available for contact and work within the convenient time slots from any country in the world.
Bulgarian IT industry is concentrated within the four major IT cities. Sofia is the largest IT hub in the country, housing nearly 70% of developers and IT companies in Bulgaria.
Due to the russian invasion of Ukraine, the country has seen a significant change in the spread of developers across the country. The lion’s share of IT specialists are currently living in the Western regions of Ukraine. AIN.ua, for example, claims that the number of IT specialists in Lviv alone exceeded 100,000. Despite hard circumstances, the Ukrainian IT industry keeps working and ensures delivery above 95%.
Both Ukraine and Bulgaria are growing quickly and keeping up with the latest trends on the software development market. Ukraine remains one of the top IT outsourcing destinations in Eastern Europe due to its impressive talent pool, moderate prices, a constantly developing business infrastructure, and the interest in the latest trends. Bulgaria offers an attractive investment climate and creates excellent opportunities for business growth. So, depending on your business needs, you may decide which of these destinations is better for you and choose your best IT outsourcing provider for a successful long-term partnership.
Why choose N-iX for IT outsourcing in Bulgaria or Ukraine
With a large number of companies on the market, it might be hard to choose the vendor. Here are several reasons to consider N-iX for IT outsourcing to Bulgaria and Ukraine:
- N-iX has a development center in Sofia, as well as offices in Ukraine (Kyiv, Lviv), Poland, Sweden, Malta, and the USA.
- We have over two decades years of experience in the IT market and employ more than 1,800 software developers.
- N-iX has many industry recognitions (Clutch, GoodFirms, OpenText and Microsoft partner, GSA, Inc. 5000, Software 500, IAOP, and many more.
If you have any questions about IT outsourcing to Bulgaria or Ukraine, make sure to contact our experts.
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