Business Scaling

Outsourcing Software Development: India vs. Philippines

Outsourcing Software Development: India vs. Philippines

When it comes to outsourcing your software development project, is there a destination that immediately comes to mind?

Many companies today, big or small, are eager to benefit from outsourcing software development. In fact, over 50% of the total global outsourcing value is generated by software outsourcing firms.

More importantly, two countries stand out as prominent players in the global arena: India and the Philippines. And there are numerous reasons why.

On this page, we will help you compare two of the most popular outsourcing destinations in the world. We’ll discuss their strengths and weaknesses and how they can help you achieve your software development goals.

First up…

India: A Global Software Development Hub

India is another global powerhouse in software development and outsourcing services. NASSCOM said that the Indian technology sector would reach a $245 billion market size in 2023. With a rapidly growing IT industry, the country has become the go-to destination for top-notch software solutions.

Like in the Philippines, India has attracted some of the world’s leading companies. Big global brands, like Google, have set up their development centers in these countries. Others have partnered with them for their software needs, and for good reason.

Why India for Your Software Outsourcing Services?

Curious to know what makes India different from the Philippines? We can mention a few reasons. Outsourcing software development to India lets you benefit from:

1. 5.2 million software developers

India boasts a staggering number of 5.8 million software developers. This talent pool proves the country's ability to produce experts with the needed education and technical skills in developing software.

Indian developers are known to be highly skilled and well-trained. Many come from institutions known for their rigorous computer science and engineering programs. This makes sure your project will be handled by pros who can deliver high-quality results.

2. Cost-efficient services

There’s one thing India and the Philippines can boast about, and that’s their labor costs being substantially lower than Western countries. 

The average annual salary of a software engineer in the US is $91,900. In India, it’s around $4,796. This cost advantage allows you to reduce your project expenses significantly, making it a wise financial choice for companies of all sizes.

3. Communication skills

India is known for its workforce's proficiency in the English language. Usually compared to Filipinos, Indian locals are also great at communicating, which is crucial for smooth collaboration between clients and development teams. It helps understand project requirements, resolve issues, and make sure the final product aligns with your vision. 

4. Friendly time difference with Europe, Asia, and the United States

India's location provides a strategic advantage when it comes to time zone compatibility. It’s behind the Philippine time by 2 hours and 30 minutes.

But similarly, the country falls within a friendly time difference range with Europe, Asia, and the United States. Indian software development teams can work in real time with clients.  This allows for prompt responses and faster project turnaround times. 

India has rightfully earned its reputation as a global software development hub. When outsourcing software development to India, you tap technical expertise and benefit from cost savings and efficient collaboration.

The Main Challenges of Software Outsourcing in India

But, outsourcing from a software development company in India has challenges. You must know the potential risks and pitfalls affecting your software outsourcing projects. 

Oversaturation of major IT hubs

Some of India's major IT hubs are Bangalore, Hyderabad, and Pune. These places are well-known for hosting numerous software companies and outsourcing firms. While this concentration of tech talent can be advantageous, it also leads to oversaturation. 

You may find competition for top-notch developers fierce. Finding and retaining the best talent may also be challenging. So, consider partnering with established outsourcing companies outside these major cities.

Data privacy and intellectual property (IP) issues

Data privacy and IP protection are critical concerns when outsourcing software development to India.  Since India doesn’t have a comprehensive data protection law, it can expose your business to data breaches and other issues.

Establish clear agreements and conduct regular audits and security assessments to avoid these risks.


India has a highly competitive IT market. You can find thousands of IT firms and developers offering software outsourcing services. This market makes it difficult for businesses to hire the best developers for their projects. Moreover, it can create price wars and quality issues among the service providers. 

Do proper research before choosing your software outsourcing partner in India. Check their credentials, portfolio, and reviews. Negotiate the terms and conditions of the contract carefully to avoid any hidden costs or clauses.

While outsourcing software development to India offers significant advantages, you may encounter challenges. Do away with them with careful planning and meticulous partner selection.

The Philippines: The Rising Star in Software Development Outsourcing

The Philippines has been experiencing a steady growth in outsourcing. In fact, back in 2011, the country overtook India with Manila being coined as “A New Capital of Call Centers”.

If we take a look back, the outsourcing industry in the Philippines has a relatively short but remarkable history. It all began in the early 2000s when the Philippine government recognized the potential of outsourcing to boost the country's economy. They actively promoted the industry, offering incentives to attract foreign companies.

One of the first areas to flourish was business process outsourcing (BPO), where tasks like customer support and data entry were outsourced. This industry quickly grew, thanks to the Filipinos' proficiency in English and their friendly and customer-centric approach.

As the BPO industry thrived, it paved the way for the expansion into other outsourcing sectors, including software development. The Philippines invested in education and training programs to develop a highly skilled IT workforce. Today, the country is known for its talented software developers, project managers, and quality assurance specialists.

Why Choose the Philippines for Software Development Outsourcing?

Here are some fantastic reasons why the Philippines is catching the attention of businesses worldwide:

1. Top-notch talent

The rivalry between India and the Philippines in honing tech talent has always been evident. In fact, in the ranking of most technologically advanced countries for 2023, both are close. This proves that the Philippines is also home to a talented pool of competitive IT professionals. 

The Philippines continues to produce experts who are skilled in various programming languages, software development methodologies, and emerging technologies. They're not just good; they're great!

2. English proficiency

Communication is key in outsourcing, and the Philippines excels in this area. English is widely spoken, making collaborating and understanding your project requirements easy. 47% of Filipinos are competent in the English language.

3. Cost-effective solutions

Budget matters, and the Philippines offers cost-effective software development services. You can get high-quality work without breaking the bank.

For instance, MultiplyMii offers remote staffing solutions that can help you save up to 73% on labor costs. By successfully hiring a remote developer, you can avoid adding to your overhead and focus on growing your development team.

4. Cultural compatibility

Filipinos share many cultural values with Western countries, making it easy to work together smoothly. Respect, hard work, and dedication are values both parties appreciate.

5. Strong IT infrastructure

Major cities like Manila and Cebu boast excellent infrastructure and technology parks. This means your software development team will have access to all the modern tools and resources they need to excel.

As the Philippines continues to invest in its IT sector, its role in software development outsourcing will only get bigger. It's a win-win for businesses looking for top talent and cost-effective solutions.

So, if you're considering outsourcing your software development project, don't forget to put the Philippines on your list of potential destinations. You might just find the perfect partner to bring your ideas to life!

Common Issues When Outsourcing to the Philippines and How To Overcome Them

While the Philippines has a lot to offer, there are a few challenges to consider:

1. Time zone differences

The Philippines is typically in a time zone that is quite different from many Western countries. For example, it can be 12 to 16 hours ahead of U.S. time zones and several hours ahead of European time zones. This time difference can create challenges in real-time communication and coordination.

But, good planning and scheduling are crucial to overcome the time zone hurdle. Here are some strategies:

Overlap hours

Find common working hours that overlap between your team and the outsourcing team. This allows for real-time communication during at least a portion of the workday.

Flexible scheduling

Encourage flexibility in scheduling meetings or discussions to accommodate both teams' working hours. This might involve early morning or late evening meetings for one of the parties.

Effective tools

Make use of collaboration and communication tools, such as video conferencing, instant messaging, and project management software, to bridge the gap. These tools enable asynchronous communication and can help keep the project on track.

2. Cultural adaptation

Despite cultural compatibility, subtle differences in work styles, communication norms, and problem-solving approaches can exist, potentially leading to misunderstandings and misalignment between the client and the outsourcing team.

Address these cultural adaptation challenges with proactive steps and clear communication:

Cultural awareness training

Provide cultural awareness training for both your in-house team and the outsourcing team. This training can help team members understand each other's cultural nuances and expectations.

Open communication

Foster an environment where team members feel comfortable discussing cultural differences and potential challenges openly. Encourage questions and dialogue to improve mutual understanding.

Clarify expectations

Clearly define roles, responsibilities, and expectations from the outset of the project. This reduces the likelihood of misunderstandings related to work approaches and outcomes.

3. Infrastructure

While major cities in the Philippines, such as Manila and Cebu, have well-established IT infrastructure, some areas may still experience occasional internet and power issues. These issues can disrupt workflow and project progress.

Location selection

Choose outsourcing partners in areas with a reputation for strong and reliable infrastructure. Major urban centers generally have better infrastructure.

Redundancy plans

Ensure that your outsourcing partner has contingency plans in place to address power outages and internet disruptions. These plans involve backup power sources and alternative internet connections.

Regular monitoring

Maintain regular communication with your outsourcing team to stay informed about any infrastructure-related challenges they may be facing. This allows for proactive problem-solving and minimizes project disruptions.

The Best Alternative Option: Hire Your Remote Software Development Team

As we come to the end of our outsourcing journey, we have an exciting alternative you might want to consider – setting up your own remote software development team! 

Picture this: partnering with MultiplyMii, you not only tap into an incredible talent pool but also save up to 80% on labor costs.

Get to relax and let us handle the rest with our effective remote staffing solutions. Our recruiters have over 10 years of experience connecting businesses with top Filipino tech professionals.

So, if you want to build a software development team of your own, this alternative might just be the perfect fit for your business.

Book a discovery call with us today!

Get 3 FREE quotes
From a dedicated recruitment specialist

Frequently Asked Questions