According to a mobile app usage and statistics, people spend 52% of their digital media time on mobile apps. It’s not shocking why every business is trying to go mobile either with mobile apps or a mobile optimized website.

However, the dilemma is whether to outsource the app development to India or build it in-house. This simple decision can affect your mobile business in numerous ways in terms of price, time, control, and sometimes, even success.

There is no magic spell which will help you out from this, only a combination of common sense, a structured approach and learning from other experience will help you out.

In this article, we will solve your confusion in deciding whether to outsource or build it in-house.

Why businesses choose in-house development

Despite the hassle and ineptitude, there are businesses which choose to go the in-house way. They hire developers. Hire a project manager. And execute it within the premises of their office.

Many people believe, and rightly so, that developing an app in-house is faster, cheaper, and gives better control over app development process.

Here are a few reasons why businesses go for in-house development.

  1. You can hire a person who you really think believes in your business and will do whatever it take to make it happen.
  2. The main advantages of hiring an in-house developer is that they are always with you, the one who lives and breathe in your culture and believes in your vision.
  3. Another advantage of hiring an in-house that you can check and improve the quality of the product.

All the above reasons are good and valid. But in real world, there are alternate possibilities that can shatter your assumptions sometimes.

Wait and read these examples from Google itself who (obviously) built it in-house but failed miserably.

The story of Google Wave and how it failed

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Google Wave was a real-time communication platform which helped users share messages in real-time between selected groups of people. In a slightly technical term, Google Wave is a platform hosted by XML document called Waves supporting concurrent modification and low latency updates.

When launched, Google aimed to build one elegant, in-browser communication for a client by combining aspects of email, instant messaging, wikis, web chat, social networking, and project management. Using Google Wave, you could also bring group of friends and business partners together to discuss how your day has been or share files.

Like many other Google products, Google Wave was meant to disrupt email’s dominance as personal communication!

Unfortunately, it was a disaster.

Current product Status: Google Wave shut down on April 30, 2012.

What went wrong?

There are several reasons for it. Although much of it can be attributed to the product idea at the core, this should be seen as how in-house development, even for companies like Google, can be a failed experiment.

Here are two product aspects that went wrong.

1. Complex user-interface

We know Google for its extremely simple user-interface with lots of white spaces so that you can focus on the areas on the screen that matters.

However, one of the major issues of Google Wave was user interface. It was not immediately intuitive, even for people versed in technology. This put a great barrier to adoption.

What Google Wave sought out to disrupt, email, was much simpler than itself.

2. Complex URL

The product was released in pre-beta condition. Even the functions like notification and individual URL were not available which made it impossible to link them from outside of the Wave.

Lesson learned from this product failure

  1. The first lessons for startups here is managing expectation.
  2. Make your product easier to use
  3. Launch your product when it is completely ready, don’t launch pre-beta testing version of the product. Customers want a product that’s free from error and glitches.

Your team might not be suited for every app that you decide to build. For instance, Google’s many apps like Google Keep, Google Duo, or the latest Google Allo did get lots of traction, but Google Wave didn’t.

This is one of the reason why startups still rely on outsourcing app development to third world nations.

Why most of the startups think outsourcing as viable options?

  1. Outsourcing reduces operational and recruitment cost
  2. Outsourcing is the source of the talent pool. You can hire people with varying skill sets which gives you an opportunity to source what you need for a certain time frame (ability to bring expert on project basis).
  3. Outsourcing gives the organization more time to strengthen their core business process. This usually means the developer can focus more on other important matters
  4. By outsourcing the work to another country you can remove the barrier of distraction and decrease the lead time in getting your idea converted into product.

Top three outsourcing destinations

1. India

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You shouldn’t be surprised to find this at the first place. India is a country with half billion in its workforce, more than the entire population of USA.

According to a survey, 80% of US and European companies chose India as their first outsourcing destination. This is because India harbors some of the world’s most skilled developers accompanied with cheap labor.

The National Association of Software & Service Companies (NASSCOM) also reported that almost half of all Fortune 500 companies choose to outsource software development to Indian outsourcing firms.

2. Philippines

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Like India, Philippines is another fertile ground for talent. With a growth rate of 46%, Philippines has become a lucrative outsourcing destination.

If you are searching alternate of India, then Philippines should be your next target.

But it is not easy to find as skilled talents as in India due to a small market. You would probably need someone who can take care of hiring recruit from Philippines.

3. Poland

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Most people are stuck with India and Philippines when asked for app development project outsourcing. There’s a country in Northern Europe which is becoming hotbed for app development project outsourcing: Poland.

You must have asked by now: what makes Poland so attractive for outsourcing?

The answer is people in Poland are highly talented, culturally suitable, educated and ethical and working with them is fun.

According to Social Progress Index 2013, Poland ranked 7th for access to higher education, due to which people here are particularly strong in engineering and mathematics. This provides a steady supply of well-trained IT grads joining the workforce each year.

Remember it is tough to expect a discount when outsourcing to Poland. However, it is worth it if you don’t mind spending a little more on your technology.

Why US startups choose India for outsourcing?

Reason #1 India has the largest talent pool of different skillset in the world

No country can match India when it comes to its vast pool of skilled and talented human resources.

The country has a population of over 1.2 billion and around 3 million are added to the workforce each year according to the NASSCOM report.

And according to Times of India, India is the second largest English speaking nation in the world behind US. Apart from this, India has a vast number of highly skilled talented people which attract companies to outsource in India.

Tom Hyde, STI Upstream business manager (Shell) says:

“The attraction of India for us was not only numbers but, more importantly, the quality of the talent. We’ve taken on people who are innovative and creative and can really contribute to the business”

Reason #2: Indian market offers a wide pricing spectrum

Forget 3 million people who are added to the workforce every year. Various startups around the world are choosing Indian market because of wide pricing options.

Charges per hour for iOS app development

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For example, a good developer in the North America can cost anywhere from $50 to $250 an hour whereas hour rate of a developer in India can vary between $10 and $80.

Charges per hour for Android app development

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Reason#3: No fear of competition

When you choose an app development agency based in the United States, there are few legalities that needs to be taken care of from outset.

For instance, you want a non-compete, a non-disclosure agreement before you can open up your idea. You don’t want the app development agency you hired to start its own business out of your idea.

When you outsource it in India, you don’t have to worry about it. Yes, you don’t get the privilege to meet the app development agency all the time and you have less control. But the incentives to copy your idea are not lucrative for an Indian agency.

Reason #4: IT-friendly policies

The Indian outsourcing industry is supported by a stable pro-IT government whose policies on the economy, GDP growth, taxation, power, telecom, industrial parks and special zones have been helpful in improving infrastructure since 1992.

IT is regarded as one of the top 5 priority industries in India. The government has framed policies to obtain maximum benefit from IT outsourcing to India.

The government has offered its support to the IT industry by providing various tax-related and other benefits and by enacting the Information Technology Act, which recognizes electronic contracts, bars cyber crime, and supports e-filing of documents.

Ever heard of Fab.com?

Fab.com is an ecommerce website based in the United States. Founded in 2010 by Jason Goldberg, Fab.com was originally created as a social network for gay men and their friends. Eventually, it turned into a daily design inspirations and sales website.

Within a year, it had over a million members, reaching the numbers faster than Facebook, Twitter, and Groupon.

But it gets more interesting when we get into how they made the app and are maintaining it now.

While the company was in its infancy, they found that hiring people in the U.S. was not affordable. They explored and settled on a talented and capable team based in Pune, India.

Conclusion

Low prices are indeed the major driver of mobile app outsourcing. Offshore agencies are as good as native agencies. They have the technical devices and other resources that are necessary to perform all the development tasks.

You don’t need to set up an in-house team for app development. It will add to your cost, time, and effort. And if it fails, you are stuck between rock and a hard place.

Thinking of offshoring your smart phone app development to a third party is more viable and economical option for businesses as well as individuals.

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