Ukraine: a Prospective Player on the World Software Outsourcing Market

The destruction of the Soviet Union about 15 years ago, made a huge country with a great level of IT science divided into small bricks. Nowadays, despite Russia’s expansion into the world software development market, Ukraine keeps playing an important role here too. There are several prerequisites for this.


Traditionally, Ukraine always was a technical region of the USSR. No wonder, the IT education was and still is one of the most popular and respective education in the region. Such well-known Ukrainian universities as Kyiv National Technical University, Donetsk National Technical University etc. as well as new establishments with more innovative approach for IT specialists education, such as Donetsk State Institute of Artificial Intelligence and others, educate a new prospective generation of young IT professionals, ambitious and purposeful.

It’s obvious, Ukrainian students win in international contests, and show true professionalism and ability to enter a business life immediately, hence, to play the first fiddle in the labour market. As the latest example, one can remember students of Kharkiv National University of Radio Electronics that became first place winners of the International Web Development Contest (I.C.W.D.I.C. 2005) held by XITEX Software Company in spring 2005.

That is why governments of European countries encourage Ukrainian programmers to come and to work there. Germany is the best example of a country that understands all pros and cons of Ukrainian IT professional, thus it’s the country that sees its benefits of employing Ukrainian programmers.

Another one important factor is the cost of labour. In Ukraine, usual hourly rates for programmers are $10-$15. Although they are little bigger than Indian ones, they are still 1.5 times lesser than Russian ones and several times lesser than American or European costs. If you consider the high level of professionalism and responsibility, then you add a European mind and time zone, plus a fluent English of the most of IT people, you realize that Ukraine is that happy medium each company looks for. Hence, many companies that outsource have already realized it.

Ukraine’s Prospects

Due to the Market Visio’s research, the volume of Ukrainian IT-services export in 2003 was estimated to be $70M, 40% more in comparison with 2002. The market prospects for 2005 were to be $150M; that is three times more in three years.

There are about 300 public companies that work for export. They are located mainly in big cities such as Kyiv, Donetsk, Kharkiv, Dnipropetrovsk etc. There are also a huge amount of groups of professionals who are mainly engaged in export on a level of freelancers. The total number of IT specialists engaged in IT-export services was about 10,000 in 2003 and grew considerably during next years.

Everything mentioned above shows that Ukraine has great prospects to become and equal player to the most known leaders of the market. Its well-developed IT infrastructure, level of services, and professionalism of programmers made Ukrainian companies able to compete for complex and complicated projects with other well-known developers. There are several companies that invest in their own software solutions and market them internationally with success. However, all of them are engaged into smaller or bigger software development projects as subcontractors.

The next step of Ukrainian gait into the world IT market seems to be a wide establishment of offshore development centers based on currently existing software development companies. Prerequisites are obvious:

1. Ukrainian IT companies have whole infrastructure required to develop reliable custom application and deliver it in time.

2. The gross yearly expenditure per one programmer will vary from $20,000 to $30,000.

3. Ukraine’s time zone is GMT +02:00. Hence, all programmers and project managers will be available on daytime for any European company.

The only thing remains to be done, though. Ukrainian IT companies are making only their first steps in self-promotion. The more professional they become in this field, the more obvious it would be that Ukraine becomes a competitive player on the world software outsourcing market.

By Alex Polonski

Alex Polonski is a Senior Sales Manager at XITEX Software Company, Ukraine. The company works in offshore software development market since 1999 and has a fair expertise in J2EE and .NET technologies. Among company’s own-developed and marketed solutions, one can see a J2EE content management system, Xitex WebContent M1.