Blog Article BACK Ukraine As a Bright Spot on Central and Eastern Europe Software Development Scene Vik Bogdanov Head of Marketing 7+ years promoting technology solutions February 14, 2019 Some time ago, 8allocate participated in and sponsored a comprehensive Central and Eastern Europe (CEE) Software Development Report by some of Ukraine’s leading investment and capital management organizations such as AVentures, Aventis Capital, and Capital Times. The Report has just been released and it provides a detailed comparison of IT/software dev landscapes in Ukraine, Poland, Belarus, and Romania. It provides industry and market insights based on the analysis of over 700 Software Development companies with 50+ employees located in the four countries mentioned above. Let’s delve into the Report findings to get a copter view of how the Ukrainian High-Tech industry evolves against the global one, what cool achievements it boasts and what the future holds for it in general. Let’s start with global and regional trends defined and outlined in the Report. The global software development services market is expected to reach $843 billion by 2021, which marks a 33% increase from 2015 (5% CAGR year-on-year). Source: CEE Software Development Report 2019 In CEE, 70% of demand for software development and outsourcing services comes from the USA and EU, while 80% of supply is traditionally fulfilled by India and China, with Eastern Europe accounting for only 5% of the global supply share. Source: CEE Software Development Report 2019 Ukraine, Poland, Belarus, and Romania altogether export $13 billion worth services (in comparison, China accounts for $38 billion in IT exports, and India – $111 billion), thus forming the largest and most powerful regional cluster with over 700,000 IT specialists working on building software development and outsourcing solutions for foreign clients. The region houses over 200 universities and private coding bootcamps (including our GoIT, one of Ukraine’s leading IT Academies that graduates between 4,000 and 6,000 IT specialists every year and helps maintain the national talent pool sustainable) which altogether produce over 60,000 IT graduates annually. Top 5 Report findings pertaining to the CEE region Cumulative software development market in 4 countries grows 4-5 times faster than the global market, with US, UK and Israel being the key customers; Although the region houses over 700,000 tech specialists, the shortage of talent remains a bottleneck for faster growth like anywhere else; The market is highly fragmented and is mostly comprised of small and mid-sized companies, with just a handful of companies reaching $200 million in annual revenue; The largest market players are likely to launch an IPO within the next five years; M&A/cashout activity in the period between 2015 and 2018 was the hottest one in the last decade, with over 70 deals having been signed in the region. Key report findings and highlights pertaining to the Ukrainian IT industry As was estimated in 2018, Ukraine has over 245 companies with more than 50 employees that cumulatively generate over $2 billion in revenues; The Ukrainian talent pool is assessed at over 172,000 specialists (which is pretty close to the recent findings of Unit.City research which say that the talent pool in Ukraine is as large as 185,000 specialists); Request our rate card for detailed breakdown by seniority level and skills. In 2017, Ukraine was recognized as the #1 Offshoring Destination by the Global Sourcing Association. It has the following ranks on the global IT scene: #4 – International Math Olympiad rank #6 – Programmers activity by TopCoder #8 – Best Programmers by SkillValue #24 – Global Services Location by ATKerney #30 – Top Outsourcing Destination by Gartner (for 7 consecutive years) #33 – Global Innovation Index Source: CEE Software Development Report 2019 In Ukraine, around 50% of all IT companies are pretty young with 5-10 years of operation, while another 33% are between 10 and 15 years old; Top 3 IT cities in Ukraine (with the largest share of companies with over 50 employees) are Kyiv (118 companies), Kharkiv (68), and Lviv (64); The export value of IT services in Ukraine has seen a 19% CAGR between 2015 and 2018; More the 50% of IT exports go to the USA, followed by the UK; Compare the total cost of a software developer resource in Ukraine vs Israel, USA and the UK here. Ukraine has 14 city specific IT clusters, with Lviv IT Cluster being the largest and most active one (over 80 members); Out of 175,000, 44% of IT specialists in Ukraine work for outsourcing/outstaffing companies. The number of junior resources is growing as a response to brain drain; Women make a quarter of the whole Ukrainian IT workforce; Top 5 verticals that are most outsourced to Ukraine are: software and high-tech (73%), FinTech (31%), healthcare and life sciences (23%), media and entertainment (17%), and retail (12%); Ukrainian IT companies generate on average $50,000 in annual revenue per a billable employee, with $34 being the average hourly rate regardless of skills and technologies; Top 5 services offered by Ukrainian IT companies are: web application development (78%), mobile app development (64%), UX design (43%), architecture and software design (23%), and software testing and QA (17%). R&D and Big Data Analytics account for 32% of service offerings in Ukraine. 8allocate’s GoIT is in Top 10 extracurricular IT schools of Ukraine, holding 5% market share! For more interesting stats and facts, we encourage you to download and read the full report. Do you need help building a dedicated/extended Team or getting ad-hoc resources for your software development project fast and cost-effectively? Submit your request!