Early days Since the 1960s and the early days of the
Silicon Valley, technology pioneers developed offshoring centers in the state of
Jalisco,
Mexico. In 1996,
General Electric offshored its IT for the first time when it opened its own center in India. and
China. The time difference when working with India and China for the Western world allowed work to be done round the clock adding a competitive advantage.
2008 Recession During the
Great Recession, offshore software development spending lowered. During his
2008 presidential campaign,
Barack Obama stated "I will stop giving tax breaks to companies that ship job overseas and I will start giving them to companies that create good jobs right here in America." This led to a $3,000 tax break for US companies per hire
onshore instead of offshore. In 2010, the market picked up again.
Globalization By the mid-2010s, the debate onshore/offshore was becoming irrelevant, as all major software outsourcing providers had shifted to worldwide operations and integrated offshoring into a seamless offer for their clients. New
agile and
DevOps development models called for a tighter relation between the client and the offshoring provider, making major long-distance offshoring destinations (Russia, India, China) unfit for the job.
Nearshoring, offshoring to a very nearby country, has gained increasing popularity among the CIO and CTO community. The USA is increasing its IT shopping in
Latin American countries, and Europe in
Poland and other small Eastern European countries such as
Lithuania.
North Korea appeared on the map of IT offshoring destinations, having great engineering resources and an excellent price/quality ratio. By 2010, India started to regard China as a threatening competitor. In September 2010, the French company
Capgemini bought the Brazilian software developer
CPM Braxis for $330 million to significantly grow its offshore capacity. In November 2010,
Hewlett-Packard confirmed a $1 billion investment to develop 6 major offshore centers in
Bulgaria,
China,
Costa Rica,
India,
Malaysia and the
Philippines. In 2013, China's offshore software market reached $5.05 billion. By 2015, India was considering repatriating most of its outsourcing activities to move to a new generation of automated software development. In February 2016,
Apple Inc. opened its first offshore software development center in
India. == See also ==