15 Offshoring Outsourcing Examples: 10 Win Cases and 5 Lose Cases

The best offshore outsourcing examples are software development hubs of WhatsApp, Google, and People.ai in Eastern Europe, which help to reduce the spending on engineer salaries by up to 50% and still develop great products. Nearshore tech teams of companies like Franki in LATAM bring the same or even better results.

With tech spending reduced by $10  billion in 2024, more US tech product companies are turning to regions like Eastern Europe and LATAM. The goal is simple: maintain Silicon Valley-caliber development standards without the Silicon Valley price tag.

I’m Dmytro Ovcharenko, founder and CEO of Alcor, your ultimate strategic partner for building R&D centers in LATAM and EE. We know how to scale your tech team from 10 to 100+ devs in a year, which speeds up development and brings more value to your business processes. You stay 100% compliant, without spending time on payroll or dealing with operational headaches because we take care of it all.

In this article, you’ll get some insights into how to offshore software development and explore both triumphant and not-so-good outsourcing and offshoring stories. That will spare you from painful lessons and help you adopt only the best business practices for your tech product company instead.

Key Takeaways

• Offshoring means moving part or all of your business operations abroad to access better talent, reduce operational expenses, and scale faster.
• Offshore software development is a smart move when your company is mature, you need to develop your product long-term, or you want to work with skilled talent without IP rights risks.
• Among successful offshoring examples are Amazon, Google, WhatsApp, Lyft, Spotify, Netflix, Franki, People.ai, BigCommerce, Dotmatics & more.
• Offshoring can backfire without the right strategy. Think inflated fees, mismatched talent, or weak local hiring impact. Success depends on choosing the right location, having full cost clarity, and working with external service providers who understand your business needs.
• Alcor‘s all-in-one R&D solution helps you offshore without the usual risks. Save up to 40%, stay fully compliant, and avoid hidden fees.

What is Offshoring?

Offshoring involves the relocation of a whole or a part of the business to a different country to access higher-quality services, access larger talent pools, and obtain scalability opportunities.

Offshore outsourcing means contracting out services like software development, design, or testing to international partners, for example, in Eastern Europe or LATAM. It lets companies boost cost efficiency while still getting top-tier engineering teams.

There are some other options:

• Certain companies go the captive offshoring route. They set up their tech R&D hubs abroad to retain full control over offshore operations while still benefiting from cost arbitrage.
• Other global businesses experiment with right-shoring, strategically placing teams across different geographies to balance price, time zones, and specialized skills.
• A few explore reshoring, bringing operations back home.

However, the reality is: if done right, offshoring still delivers unmatched flexibility and value for growing tech businesses.

When to Use Offshore Software Development Services?

Your business is mature

Once your company boasts a solid client base and maintains consistent yearly revenue growth, your business strategy can accommodate offshoring. At this point, you can tally the potential tax savings and lower labor costs you will get with the move and weigh its fit within your business model.

Learn more about the European tax rates vs US taxes and how much you can save on taxes alone.

You need maintenance & support

Picture this: your products and services are fully fleshed out and rigorously tested. Now, scaling up requires ongoing maintenance and support, and offshoring is an excellent means of handling these business functions. One vivid example of that is offshore Salesforce development. Notably, you’ll only divulge data related to product deployment, safeguarding your source code.

The project does not involve IP

IP rights often stand in the way of offshoring, as you play with fire when exposing sensitive data like codebases or customer information to third parties. A notable example is the Versata vs Sun Microsystems case, where an outsourcing partner later claimed ownership of the delivered software and sued for over $100 million. Certain offshoring models, however, offer secure data protection. But if you don’t want to bother with this, choose non-IP-based projects. Think operational support-centric tasks, testing, or design – lower costs, zero risk, access to specialized skills, no IP concerns.

It is a long-term plan

Offshoring is rarely a good fit for short-term projects. Entering a new market takes time and resources, whether you’re setting up a legal entity or partnering with a vendor to build a team. For companies looking for quick results without the overhead of team or project management, the effort typically outweighs the benefits.

On the other hand, for tech product companies focused on building or scaling their tech product, offshoring makes more sense when approached as a long-term business strategy. After all, maintaining and evolving a product is an ongoing process that lasts as long as the company itself.

You lack skilled talent at home

According to McKinsey, only 16% of executives feel confident in their current pool of skilled professionals to support digital transformation. Meanwhile, 60% cite the lack of tech skills as a major roadblock. Even with the rise of generative AI, there’s no indication that demand for engineers is slowing down. As the US prepares for a 7-million tech talent gap by 2034, the pressure to find qualified developers will only intensify.

That’s why many tech product companies look abroad at global talent when they can’t find it at home. However, offshoring top tech talent is not a dime a dozen. In fact, it’s increasingly challenging to find. Our company’s research shows that an effective solution to this issue is a tech R&D center. It implies launching an office in a different country while benefiting from local tech expertise and lower costs. The software R&D team is yours from the very beginning, which means it is a secure and scalable approach to managing offshore operations with minimal risk. Finally, your back office and legal business functions are also handled.

Startups and offshoring

Startups are increasingly offshoring to build their first tech teams or speed up development without draining resources. With 31% of US full-time employees now working remotely (Gallup), offshoring feels like a natural extension. However, hiring senior engineers in-house in the US can be:

• Expensive – A mobile app team (PM, UI/UX, Mobile Dev, Python Dev, QA) can cost $642,000/year, according to our company’s internal data
• Slow – 6+ months to hire just one developer

That’s why startups are choosing offshoring. Take GoTransverse, a US-based product company: they quickly built a senior full-stack dev team of 6 in 6 weeks with Alcor in Eastern Europe to boost delivery, while increasing cost efficiency, and keeping their internal focus on core competencies. And it’s all while maintaining the same tech service quality as in-house teams.

10 Successful Offshoring Examples

There’s a whole checklist to tick off before diving into the offshoring journey. But the big question is: “Where to offshore?” Eastern Europe and Latin America stand out as advantageous offshoring regions, and the list of real success stories below provides concrete evidence to back this up:

1. WhatsApp

Offshoring enables your in-house tech team to focus on the most relevant challenges for your business. The WhatsApp launch is a textbook offshore outsourcing example done right. Just before it was released in 2009, the company offshored its software development to Eastern Europe. Despite time zone differences, which were resolved through a clear delivery structure, WhatsApp relied on overseas talent with specialized skills to handle the tech groundwork, providing design solutions, and taking care of core operations in app development. Its engineers concentrated on specific tasks related to clients, such as customer support.

This strategic division paved the way for WhatsApp’s rise to the top of both the App Store and Google Play. This situation forced Facebook to face its formidable rival by acquiring WhatsApp for a staggering $19 billion – the largest acquisition at the time for a venture capital-funded company.

2. Google

Google joined the ranks of successful offshoring companies in 2020 by venturing into Eastern Europe. They established a software development team through the acquisition of CloudSimple. Despite Google having the world’s largest team of developers, this move highlights their passion for advancement and innovation. CloudSimple, now part of Google Cloud, enhances its VMware migration solution. Undoubtedly, specialized expertise wasn’t lacking; offshoring significantly slashed business processes’ expenses, thanks to lower labor costs and taxes.

If you are also in need of Eastern European tech talent, consider Alcor as a recruitment services provider.

3. Amazon (Ring)

Amazon also leveraged offshoring for expansion, acquiring the startup Ring in 2018. Ring boasted a programming staff in Eastern Europe specializing in outdoor home security solutions. As expected, this deal boosted Amazon’s competitiveness in the market. Alcor was happy to provide them with accounting services and payroll outsourcing.

That’s how, within a year, Amazon formed a second offshore development crew in the region, cutting time-to-market and overall operational costs.

4. Lyft

Another standout example of offshoring in action is Lyft, the US-based ride-sharing company dedicated to crafting innovative customer experiences. Seeking to elevate product development and tap into Eastern Europe’s exceptional engineering talent, Lyft established a software team in the region in 2021.

Currently, the company’s crew consists of 20 programmers and is expected to grow to 100. Their Eastern European software developers are instrumental in data mapping and improving Lyft’s services.

5. Spotify

Another inspiring offshoring case study is that of Spotify, which extended its operations to Latin America back in 2013, a location that minimizes time zone differences with the US headquarters. Beginning with Mexico, Spotify’s prime location in terms of client base, the company expanded into Brazil and other countries, reaping substantial rewards and expanding its footprint in the global economy. Notably, Chile emerged as one of Spotify’s fastest-growing markets, earning praise from its founder, Daniel Ek, who aims to replicate Chile’s success in other countries. Spotify’s main driver was scaling and competing, so the company set its sights on promising markets and started making deals with music rights holders.

Over time, it assembled high-performing legal and business teams in the chosen locations. Now, Spotify’s impact on LATAM can’t be denied. Since their expansion, there’s been a 986% surge in Latin music listeners from 2014 to 2023, constituting one-fifth of Spotify’s global base.

6. Netflix

A tech giant, Netflix, unsurprisingly tops most offshoring companies’ lists. Like Spotify, Netflix experienced explosive growth upon entering the Latin American market in 2011. With 23 million subscribers initially and a potential audience exceeding 600 million, Netflix’s offshoring business case commenced in Brazil, followed by Argentina, Chile, Colombia, Mexico, and 38 other regional markets. Local production in all of the markets was pivotal to Netflix’s triumph. By relying on local insights and teams, Netflix took over LATAM.

However, such expansion also dovetailed with the fast-growing nature of the market itself. Presently, Netflix thrives as one of the leading foreign companies in Mexico and Brazil – it reached 12.2 and 14.4 million subscribers by the end of 2023, respectively. More so, Netflix’s subscriber base is expected to grow by another 15% to 52.3 million users in the region by the end of 2027.

7. Franki

Among the recent offshore outsourcing examples is the LA-based experience app company Franki. Through 2024–2025, they tapped into Mexico’s mobile development market to scale their engineering team. With Alcor, they sourced senior iOS, Android, and QA engineers skilled in reactive programming – a tough talent pool to crack. In just a month, Franki onboarded 7 top hires, all supported under Alcor’s EOR model with no buyout fees and full legal coverage.

8. Dotmatics

Dotmatics represents another offshoring success story. This US scientific software company was looking to expand its engineering team beyond the US, Ireland, and New Zealand. With traditional outsourcing off the table, they chose Eastern Europe and partnered with Alcor to build a high-performing R&D team. We adjusted their vacancies for the local market, launched an executive tech search, and assigned 4 headhunters and a key account manager. Within 5 days, Dotmatics received the first CVs. In under a year, we hired 30 top engineers, including a Director of Engineering, Full Stack Developers, QA, and DevOps.

Having a dedicated offshore team in EE allowed Dotmatics to stay true to its internal business practices and hit major milestones, including a $5.1 billion acquisition by Siemens in July of 2025. Moreover, Dotmatics’ engineers received the stock options, proving once again how valuable this benefit is.

9. BigCommerce

Among the examples of companies that chose offshoring, there is also the thriving experience of BigCommerce. It’s a tech product company that provides innovative solutions for E-commerce businesses. Their attempts with international outsourcing firms proved exhaustive and unproductive. Turning to a partner that builds tech R&D centers for cost-effective solutions, they partnered with Alcor to develop their product and establish a proficient software development team.

We were pleased to provide comprehensive support for BigCommerce’s expansion in Eastern Europe. See rapid growth for yourself: our client’s team exceeded 30 developers in just 6 months!

10. People.ai

People.ai, a software product company specializing in B2B sales acceleration through ML technologies, exemplifies another successful offshoring business case. Seeking rare engineering talent for AI algorithm development, the San Francisco-based company opted to establish a development team in Eastern Europe and delegated all back-office operations, including legal, finance, and administrative tasks, to Alcor. Our real estate managers prepared a perfect location, and legal and finance teams offered the most beneficial structure of doing business in EE, while Alcor’s tech recruiters were searching for top tech specialists.

As a result, we launched a fully equipped software development team in just a month and swiftly hired over 25 professionals in just 12 months, some of whom later became their core product team without buyouts. The outcomes surpassed all their expectations!

Among other successful offshoring companies that decided to hire developers in Eastern Europe are also Reddit, Samsung Electronics, Oracle, and Huawei.

5 Examples of Global Businesses Offshoring that Went Bad

Telecommunication company & wrong choice of provider

Let’s talk about a major telecom giant that fell prey to a disastrous outsourcing decision. They joined forces with an Asian service provider that was great at coding but clueless about telecom nuances. Result? Hours wasted on futile business app development. Instead of minimizing risks, the vendor magnified problems. The provided IT services were so dismal that the company decided to return to the in-house engineering team.

Consequently, the client faced only financial difficulties and a stressful legal process battle with the offshore partner. It is a living example that shows how crucial the choice of vendor could be. It’s essential to select a service provider with the proper expertise and track record.

Product company & overpayment

Not long ago, we were approached by a client who had an unpleasant example of offshore outsourcing. It turned out that for months, they were victims of crooked offshoring companies. Examples of fraud are striking. For instance, they were paying a fee for mid-level engineers more than twice the average payment for such a specialist in Eastern Europe. What is more, there was no transparency on rent and utility costs, office equipment, and furniture.

If your goal is to reduce costs and then reinvest your savings in product elaboration, for instance, blind invoice payment is not the best option for you. Contrary to that, taking the reins by building your software team gives you control. Alcor can be your trustworthy guide when navigating an unknown business environment.

Machine learning company & multiple providers

One of Alcor’s clients, a US machine learning software product company, provided us with another example of offshore outsourcing that should not be followed. Before turning to us, the company started cooperating with several providers simultaneously. It resulted in utter confusion, as they ended up covering the same tasks simultaneously. Naturally, their offshoring stalled in the making.

Ultimately, the client came to Alcor and successfully got their tech R&D center services, but lost precious time. In offshoring, putting your eggs in different baskets doesn’t work out. The tip here is to choose your third-party service provider carefully and then stick with them to achieve faster results.

Healthcare app & no employer branding

One more example of offshoring business is one of our clients who struggled to recruit senior tech talent in Eastern Europe. Why? Their lack of name recognition in the new market made top engineers reluctant to join. Enter Alcor, swooping in with employer branding solutions. After a full cycle of marketing promotions, including SMM services and PR activities, the company became renowned in the local market.

The next step of cooperation with Alcor was the launch of an offshore development center with our comprehensive support. It was a happy ending with effective office management, arranged legal and financial operations, and a brilliant team of software developers.

IT offshoring & inappropriate destination

Sometimes, tech enterprises miss the mark when choosing an offshore destination. Take an American company’s offshoring business example – a bid to expand its in-house team by hiring software developers in an Asian country. They were drawn to this destination’s vast pool of tech experts and cost-effective solutions, seeing it as a chance to save on labor expenses and scale rapidly.

But reality hit hard. Instead of getting fast and effective recruitment, they went through 20 job interviews, where only 2 engineers had outstanding programming and problem-solving skills. Others were junior-level coders who had overemphasized their experience in CVs and got into the interview. They possessed limited skill stacks, insufficient expertise, and low proficiency in English. To prevent product quality deterioration and avoid additional expenses, the American company stopped hiring in this location and found a different country as an offshoring destination.

Read our article on the BOT model in the IT industry to learn about an effective offshoring option!

Where to Offshore to?

As I’ve already mentioned, Latin America and Eastern Europe lead the way in IT services. Both boast large pools of skilled workforce – over 1.8+ million tech specialists in Eastern Europe and over 2 million in LATAM. Average senior salaries in Latin America and Eastern Europe are 2 times lower than in the US – $62K and $67K, respectively. The EE market will amount to $18.25 billion in 2030, while the LATAM one will reach $40.58 billion. What about some more details?

Mexico

The Mexican pool comprises 800,000 software engineers renowned for data analytics and mobile application development skills, as well as JavaScript, Python, SQL, React.js, Angular, and C#. Overall, the country houses over 1,137 startups, and its IT services market is projected to grow to $20.04 billion by 2030. Its tech hubs – Mexico City, Guadalajara, and Monterrey – follow the tradition of Silicon Valley by showing remarkable growth. Mexico is home to 11 unicorns, and most of them trace their roots back to Mexico City.

This tech hub also has the largest tech talent pool in LATAM, over 300,000 experts, surpassing São Paulo. And the 2025 US tariff hike? Doesn’t touch digital services. Your software offshoring or nearshoring plans in Mexico stay just as efficient and tariffs-free as before.

Colombia

Colombian tech hubs like Bogota, Medellin, and Cali have agglomerated 165,000 programmers who are experts in Python, JavaScript, C#, and Java. Also, the country is home to over 1500 top startups. Colombian devs can obtain STEM degrees in highly esteemed institutions, as 12 Colombian universities are in the Best Global Universities in Latin America list.

The IT services market will hit $2.87 billion by 2030, while another staggering benefit of the Colombian business environment is its 100% tax deduction for R&D center services.

Argentina

Argentinian developers consistently rank at the top in terms of English proficiency, ranking second in LATAM. Its pool amounts to 150,000 software developers skilled in Python, R, SQL, and Cloud APIs. The most prominent tech hubs include Buenos Aires, Cordoba, and Mendoza. The country is home to 741 top startups driving innovation across the ecosystem. Finally, fueled by ongoing economic growth, the Argentinian IT market is rapidly expanding – by 2030, it will reach $3.50 billion.

Chile

Chile’s talent pool is slightly smaller, but its 100,000 coders have good English skills, securing 8th place in the region. They are talented in Java, Python, PHP, and ASP.NET, and excel in statistical and computer programming. Home to 588 startups, the country’s market is growing at a 3.85% annual rate and is developing its tech hubs in Santiago, Valparaíso, and Concepción.

Poland

Poland has the biggest tech industry in Eastern Europe. With over 650,000 developers, it’s a leading destination in the region for companies aiming to access mature talent and well-established infrastructure through offshoring. Out of its 400 higher education institutions, 22 made it to the QS World University Ranking 2025.

Local programmers are skilled in JavaScript, Java, Python, Ruby, Shell, PHP, and Typescript, and rank 2nd in the EF English Proficiency Index regionally. Poland also boasts several tech hubs – Warsaw, Kraków, Wrocław, the Tri-City area (Gdańsk, Gdynia, and Sopot), Katowice, and Poznań.

Romania

Ranking #2 by the size of the technology sphere and #3 by the number of software developers in Eastern Europe, Romania is another go-to choice for business offshoring functions for Western companies.

This Eastern European country has a talent pool of over 250,000 software developers who are well-versed in PHP, Java, C#, JavaScript, React, and C++, and is #1 in English proficiency in EE. The country houses over 1,660 startups, 3 of which are unicorns. The main Romanian tech hubs are Bucharest, Cluj-Napoca, and Iași.

Bulgaria

Bulgaria has over 128,430 software developers with a great command of JavaScript, Python, PHP, Java, and C#. Its IT services sector is comparatively smaller, with the projection to reach $583.76 million by 2030, but the country’s hubs in Sofia, Plovdiv, and Varna contribute to its further growth. Regarding taxes in Europe vs the US, Bulgaria has one of the lowest corporate tax rates, which amounts to 10%.

Get armed with more info! Check out our article on outsourcing software development to Bulgaria!

Ukraine

Ukraine is resilient and highly digitalized: software development now contributes 6% of Ukraine’s GDP, up from 4.2% in 2021. Despite the full-scale invasion, tech product companies are returning – and launching new ones, with 2,600+  businesses founded since 2022.

The Ukrainian talent pool encompasses 302,000 developers, especially those skillful in JavaScript, Java, C#, Python, and PHP. As for its IT services market, it prospers with tech hubs in Kyiv, Lviv, Dnipro, Kharkiv, and Odesa, and will reach $4.95 billion by 2030.

But how can you hire skilled Latin American or Eastern European programmers to maximize the benefits for your tech product company?

Choose a Smart Offshore Outsourcing Strategy with Alcor’s EOR for Tech Model

Offshoring isn’t about handing off responsibility. It’s about making smarter decisions. That starts with choosing the right country, building a solid strategy, and partnering with someone who knows the local tech market.

With Alcor’s tech-focused Employer of Record services model, you can scale fast without setting up a legal entity, worrying about compliance, or dealing with payroll headaches.

Why will you benefit from working with us?

• We employ your offshoring tech team legally through our EOR solution, so you don’t have to set up your own entity, comply with local labor laws on your own, or face any risks. You stay compliant and focus on product development instead of legal admin.
• Besides, we’ll hire a senior dev team of 30 for you in just 3 months. That means you’ll scale your product in a new location faster, reduce delivery delays, and stay competitive while creating better conditions for attracting investment.
• You get full operational support from day one. We handle office setup, hardware, and other essentials, so your team starts in a functional workspace that supports engagement and helps build team culture.
• With the all-in-one solution, you get an offshore tech R&D center with a 24/7 Account Manager and all-embracing business support: from offshore payroll services to employer branding – with up to 40% cost savings and zero hidden fees.