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This article aims to cover the key aspects of the Ukrainian IT market. It discusses the expertise of software developers in Ukraine, reasasons to choose software development in Ukraine, current technologies, and trends as well as dispel the main myths and concerns that are often associated with the Ukrainian IT community.
The IT industry in Ukraine has been actively growing over recent years. More and more companies choose the option to outsource software development to companies in Ukraine since the country offers optimal business development conditions and a wide talent pool. Due to scientific legacy, governmental initiatives, and advanced technical education, outsource software development companies in Ukraine get worldwide recognition. These are the key factors that make investors and global leaders choose Ukraine as their outsourcing destination.
The Ukrainian IT market: the latest statistical insights
Software development in Ukraine presents a big cluster in the country’s economy being a flourishing technology hub and a strong competitor. The IT sphere is predicted to reach 8.4 billion USD of industry export volume in 2025. Despite the external and internal circumstances and economic and political issues, IT industry in Ukraine still manages to offer world-class tech specialists on a regular basis. It is hard to say with certainty whether it’s a talent that makes them stand out, but we believe it is also the strong desire, hard work, and full dedication of software engineers that lead them to worldwide recognition. Software development in Ukraine is one of the most dynamic and prospective directions for the country’s ecosystem. Jean-Eric De Zagon, Head of the European Investment Bank’s Office in Ukraine, named food and IT industries as the most attractive for investors in Ukraine.
According to the Good Country Index, the country occupies the primary position as the major contributor to science and technology. It is also named as the top Eastern European powerhouse for outsourcing and R&D facilities. Ukraine ranks 20th in the A.T. Kearney Global Services Location Index for being the number one outsourcing destination. According to Gartner’s report, Ukraine entered into the rank of the top 20 offshoring destinations of the EMEA region.
Location
The country has the perfect location in terms of proximity, accessibility, and timezone. It is an attractive destination for market leaders, midsize clients, and startups. Moreover, the country has a one-hour difference from most of the European cities and has 2-3 hours overlap with the USA timezone. With an advanced transportation system, you can easily move across the country and enter Ukraine without a visa. Ukraine has significantly raised connectivity as new low-cost airlines entered the market.
Software developer salary in Ukraine
The current situation in the Ukrainian IT market is tense: – it is overheated. Demand exceeds the supply. After the wave of the pandemic restrictions, companies started over the active process to hire software developers in Ukraine (which started to demand higher salaries and companies were willing to pay!)
Median software developer salary in Ukraine has increased over the past six months (according to DOU):
However, in comparison to the other countries, including the USA and European countries, these rates are still rather low. See the table below to compare the rates in Ukraine, the EU, and the USA.
According to the report presented by Djinni, System Architect, Head of Engineering, Lead DevOps, Solutions Architect, CIO / CDO / CTO get salaries varying from $8.5 thousand to $10 thousand. And according to the DOU survey, a developer working for a US company officially receives $ 20 thousand per month + bonuses.
Software development in Ukraine is the 3rd spot for a number of Node.js, Python, ASP.NET, Ruby, Symfony, and PHP developers.
Ukrainian specialists uniqueness
A considerable advantage of Ukraine as an IT outsourcing destination is that Ukraine does not operate under all the EU regulations, thus the hiring procedures are much easier than in EU countries. Moreover, the taxation rate is 5% lower than in neighboring countries.
Based on the interview of a Japanese IT entrepreneur Hiroshi Shibata that owns a consulting agency in Ukraine, hiring software developers in Ukraine have some considerable benefits in comparison to their EU colleges, in particular:
-full dedication;
-flexible mind and expertise allowing to find the solution for the most complex cases;
– self-sufficient and autonomous, and at the same time ready to look for the necessary information by conducting their research;
-high involvement rate and strong technical expertise;
-advanced level of English – upper-intermediate and higher;
– IT professionals can quickly learn the latest and most demanded technologies to stay relevant and up-to-date.
Taxation aspects
In Ukraine, an individual entrepreneur is called “fizichna osoba-pidpriyemets” or FOP. According to the Ministry of Justice, there are more than 210,000 FOPs in the IT sector of Ukraine. In 2021, their number increased by almost 30 thousand. With the revenue tax, you must pay up to 5% of all the income that you make. You must pay this tax to the fiscal authorities once per quarter. Thus, most outsource software development companies in Ukraine prefer dealing with FOPs rather than hiring employees. Employers often reimburse the contractor for the taxes he has to pay as a sole proprietor. For the company, it is still more cost-effective.
The Ministry of Digital Transformation of Ukraine is trying to find a compromise by regulating and liberalizing tax relations. Thus, they launched the initiative ‘Diya.city” the first virtual business country in the world, within which for the first time an accessible, transparent and comprehensive register of business entities in the IT industry in Ukraine will be created. The program includes AgroTech, Fintechб Blockchain, AI, cloud computing technologies, medical neural networks, biotechnology, and IoT, etc.
The Ukrainian government has taken measures to support the growth of the IT sector. Since it is one of the most prominent industries, it contributed $5 billion to the Ukrainian budget last year. The government is taking active steps, as for example declaring the facilitation of IT entrepreneurs.
Ukraine and Cybersecurity issues
According to the IT Ukraine Association, the CyberAccelerator UA is run by the SocialBoost team within the USAID Cybersecurity for Critical Infrastructure of Ukraine Activity. They have launched a four-year initiative to support and strengthen the country’s cyber resilience and build state-level cybersecurity. Moreover, when hiring software developers in Ukraine, you may be sure they follow the international security regulations, including ISO, PCI, and HIPAA.
Education
According to the Ministry of Digital Transformation, 15 to 17 thousand IT professionals graduate every year. Software engineers in Ukraine get their degrees from higher technical educational institutions (there are more than 50 of them in Ukraine) and in various IT academies and schools.
Software development companies greatly contribute to the education of yet-to-be IT specialists. They provide traineeships, conferences, and IT courses.
Technology parks
Ukraine encounters 16 technology parks that are officially documented by the Ministry of Education. The main aim of these hubs is to create the necessary facilities and conditions for the creation and implementation of new technologies. These parks combine the potential of universities, research structures, industrial enterprises, and subjects of innovation infrastructure at the regional, national, and international levels. In April 2017, the first buildings of the innovation park UNIT.City were established. They were financed by UFuture Investment Group, headed by businessman Vasil Khmelnytsky. The project became a regional hub that hosted the programming school UNIT. Factory, startups headquarters, R&D centers of global leaders, Ukrainian companies’ innovation centers.
The European Investment and Development Bank (EIB) recently extended a EUR 50 million loan to this innovation park.
Market overview in numbers
- Ukrainian software development cluster has increased by nearly 46 times over the last 17 years from $110 million in 2003 to about $6 billion in 2022;
- The talent pool in Ukraine encounters about 210 000 IT specialists;
- The country’s IT ecosystem encounters 4.000 local companies and 110 leading global R&D centers (Samsung, Microsoft, Ring, Snap, Magento, Plarium, Boeing, Siemens, Ericsson);
- Currently, the main customers are the United States (about 50% of all IT services are exported there), the EU (35%, including Germany, the Netherlands, Denmark, Sweden) and Canada (8%);
- The International Association of Outsourcing Professionals (IAOP) announced the top 100 IT-vendors supplying outsourcing services in 2020. The list included 13 Ukrainian software companies and 8 companies with their offices in Ukraine.
- In 2020, Ukraine rose to the 2 position in the ranking of StartupBlink, reaching the top 30 in the development of the ecosystems for startups.
- Ukraine occupies the leading position in the rank of countries for offshore software development and becomes a global IT center;
- One of the top 20 offshore locations in EMEA by Gartner;
- One of the top 50 most innovative countries by The Global Innovation Index
According to Clutch, there are more than 1,000 verified web development companies in and 870 app development companies.
Tech conferences
Ukraine is an active participant and contributor to various international events and gatherings. The country hosts numerous events dedicated to IT. They comprise conferences and workshops with speakers and attendees from all over the world. The list of the large-scale conference for 2021-22 include:
- Js Fest Conference – international IT conference covering all the aspects of JavaScript developers;
- Games Gathering Conference – the largest B2B conference for game developers in Eastern Europe;
- Blockchain & Bitcoin Conference Kyiv – trends and latest innovations, including the topics of cybersecurity, virtual actives, NFT markets;
- TechComm Conference – global technical communication conference held for the third time;
- World Congress on Information Technology and Computer Science (WCITSC)
IT outsourcing to Ukraine in comparison to other countries
Europe offers a variety of outsourcing spots, apart from Ukraine including Poland, the Czech Republic, Bulgaria, and Slovakia. See the table below to evaluate Ukraine in comparison to the nearest software development destinations.
Altamira on the native IT arena
Altamira is a mature consulting and software development company with more than 10 years of experience in the homeland market. Starting our path as a small team of enthusiasts, we have managed to turn into advanced tech experts, gaining rich practical experience. We have successfully helped more than 100 of our clients have gained great reputation and great feedback.
The team encounters more than 70 advanced specialists – DevOps engineers, Business Analytics, Front-end and Back-end developers, UI/UX designers, AQ specialists, and Scrum masters.
Thanks to our gained professional experience, our team can cope with both large-scale projects and small ones, delivering excellent solutions through all stages of development.
Services we offer:
- Custom web and mobile app development;
- Building MVP to test your idea in the real market conditions and get user feedback;
- Outstaffing or choosing dedicated teams to support and maintain ongoing projects;
- Discovery stage to define specifications and create the best product design. It helps to compile forecasts for rational budget distribution and evaluation of time frames.
- Depending on the needs of your application, we offer continuous support and maintenance;
- Our team stick to all security standards, sign the NDA agreements, and guarantees regular code reviews while keeping the highest level of safety;
- The utilization of Agile methodologies allows us to secure the process transparency, guarantee fast time to market, introduce changes quickly, and control the whole development process;
Cross-industry expertise, rich tech stack, and dozens of successfully delivered projects allow us to implement the best practices and technologies and make any idea a reality.
Our expertise niches:
– Fintech;
-Company Management Tools (CRM, ERP);
-Internet of Things;
-Social Networks Entertainment;
-Utility Fitness and Sports;
-HR and Recruitment;
-Education;
-Software as a Service (SaaS);
The Altamira is established in compliance with all the state legislative regulations. We have two offices in Kyiv and Zaporizhia and a vast team of professionals with advanced expertise and unique tech skills.
Extra-benefits of Altamira:
- We have experience of successful cooperation with global market leaders, demonstrating a high level of expertise and successful delivery of our customers’ visions;
- We build transparent communication, enabling a client to control the development process from any point of the world. Our clients can attend regular team meetings which are usually scheduled in the commonly suitable time;
- We provide our customers with access to Jira and Confluence reports, thus they can easily track the project updates;
Projects that we are most proud of
ZEMP
Ukrainian IT Hubs overview
DOU states that the biggest number of tech specialists are concentrated in Kyiv, Kharkiv, and Lviv.
Kyiv
Kyiv has occupied the leading positions in the list of 35 most developed IT ecosystems. It provides favorable conditions for project launch and development. Many talented experts here have the opportunity to work for international companies. The city has more investors than Warsaw, Vienna, Oslo, and Copenhagen.
A number of companies: more than 500.
Most popular technologies: Node.JS, React, Angular, PHP.
Project industries: Data science, IoT, healthcare, machine learning, fintech, e-commerce, HoReCA, etc.
A number of developers: up to 80K.
Salary range: from $1900 to $3900 (a senior software engineer).
Kharkiv
It is the second-largest city in Ukraine and has more than 400 IT companies. Each year, it supplies 3000 IT graduates. It is also the birthplace of GitLab.
A number of companies: more than 400.
Most popular technologies: Python, PHP, Java.
A number of developers: up to 30k.
Salary range: from $1600 to $2800 (a senior software engineer).
Lviv
The city encounters more than 20.000 software engineers. Lviv takes the third place by the number of programmers. Most IT specialists provide services to Western Europe, the UK, and Nordic countries.
A number of companies:317 IT companies;
Most popular technologies: JavaScript, Java, C++, Python;
A number of developers: up to 30k;
Salary rates: from $1800 to $3000 (a senior software engineer).
Dnipro
Dnipro counts more than 12,000 software development specialists. It has a highly educated workforce and encounters nearly 170 IT companies.
A number of companies: more than 400.
Most popular technologies: Python, Java, Ruby, C++.
A number of developers: up to 30K.
Salary rates: from $1500 to $2400 (a senior software engineer).
The expertise of Ukrainian developers
Ukrainian developers attract more and more customers thanks to their talent, expertise, and best price-quality ratio. The country occupies 64th place out of 190 countries in terms of doing business. The country boasts a high level of digital adoption – being centered on connectivity, knowledge, and infrastructure. Software developers from Ukraine are ranked at the 11th position according to Hacker ranking in terms of programming quality. Let’s discuss why more and more global business leaders trust software development to experts from Ukraine!
For sure, one of the most significant reasons is their expertise. Recognition of local software developers as the strongest players in the outsourcing arena is proven by the global companies setting up their development centers in Ukraine (Apple, Google, Microsoft, acc. to TopCoders).
The country has a high level of tech education, and software engineers possess academic degrees from tech STEM education and academies. Most experts in Ukraine have more than 5 years of practical experience, allowing them to deliver the highest quality products.
Ukrainian software developers demonstrate a high level of involvement. So commitment to a long-term partnership is guaranteed.
The Ukrainian development society consists of highly skilled experts (Big Data, IoT, Blockchain, AI, cloud solutions) and software engineers with general backgrounds (PHP, Node.Js, Agular, React etc). According to DOU report (2021), Ukrainian developers keep up with the tech pace showing advanced expertise in diverse technologies.
Soft and hard skills of software developers in Ukraine
- Productive communication. Tech specialists in Ukraine demonstrate a high level of communication skills and knowledge of the English language. That guarantees the required level of synergy and allows for an easy communication process without misunderstandings. According to the English proficiency index, 85% of software developers in Ukraine proved at least intermediate English level.
- Passion and motivation. Software engineers demonstrate a flexible and expert approach, untangling complex tasks. Full dedication and hard work are the key drivers of their success in the global arena.
- Fairness and adequate assessment of abilities. Experts will not give you biased information. They conduct in-depth research and assessment, providing only those solutions that they can 100% deliver, based on your needs and requirements.
- Learning capabilities. Ukrainian software engineers successfully keep up with the rapid pace of innovations. They are active learners, they attend international conferences, trainings, and are constantly improving their expertise.
5. Expertise. Tech experts in Ukraine are valued on the international IT market for their solid technical background and wide expertise. Around 65% percent of Ukrainian developers have more than 3 years of coding experience. Ukrainian talent pool presents
6. Diversity. Looking at the structure of the Ukrainian IT expert pool, you can notice the following division: 54% of software engineers, 19% of designers, 14% of project managers, 11% of QA specialists, and 2% of DevOps engineers.
7. Global recognition. Ukraine has the 4th largest number of certified software developers globally.
8. Data-driven approach and advanced business ethics. Ukrainian experts share the Western world values and approaches to building business relationships. It allows clients to feel comfortable and be on the same page with their outsourced teams.
Trends on the modern market
Ukraine has always been active in adopting the latest technology trends. Thanks to the quick learning abilities, flexibility, and evolving expertise, Ukrainian developers have always kept their thumb on the pulse of the upcoming innovations. Moving everything online due to the pandemic has changed the pace and speed of how businesses accelerate digitalization, and they look for tech instruments to quickly put it into reality. An increase in the need for sustainability and ability to process big data volumes, flexibility, and agility are the instruments allowing to survive in the changing modern market. Demand creates the supply, and here are the top technology trends that will be popular in Ukraine in 2022.
The Internet of Things (IoT). Integrated with AI and ML, the IoT helps businesses to digitize their business operations and improve connectivity. Combined with 5G and cloud edge computing, the IoT is supposed to power up the connected sensors and machines and move to the new level of innovating.
Big Data and Analytics. Allow to upgrade the decision-making process and make it more data-driven. It can be applied in verified industries and Ukraine offers experts with cross-cultural expertise. They use complex algorithms to extract readable data in the shortest terms, moving business processes to the next level.
According to LinkedIn, the number of Ukraine encounters 1,500 big data software developers and regularly gathers global conferences boosting their expertise.
Generative AI. The AI-driven technologies have enforced the business digitization process. Business CRM systems can expand the potential they extract from data, increasing the efficiency of data analysis and extracting valuable insights. AI-driven algorithms learn from the available generated data and use it to generate brand-new realistic artifacts. Frameworks and best practices are emerging to secure fair and easily explainable results.
The focus on security. Software developers in Ukraine understand security as an internal part of the software development process. Customized software solutions undergo testing from the preliminary stages of development. Security is a top priority.
Edge computing. Edge computing is a new challenge for business entrepreneurs. However, outsource software development companies in Ukraine successfully utilize cloud computing, creating scalable big data solutions. It ensures efficient big data processing and analytics. The latest computing architectures include many types of computations that increase the capacity for most apps.
Myths and concerns associated with software development in Ukraine
Ukraine is often associated with Chornobyl, revolutions, and economic crisis. Such perceptions have created numerous myths and concerns around software development in Ukraine. Here are the most widespread ones and the strong facts dispelling these myths and legends.
Myth 1 – Economic instability and tense political situation.
Despite all the economic downfalls and political issues, Ukraine now demonstrates growth and improvements. About 7 years ago, Ukraine started active Euro Integration. The Ukrainian government together with the USA and European colleagues are putting all their efforts into stabilizing the situation.
Numerous R&D facilities of global market leaders are established in Ukraine, including Samsung, Google, Siemens, Oracle, etc. More than 100 companies from the Fortune list have chosen Ukraine as their outsourcing destination.
Myth 2 – The level of expertise of software developers.
According to the DOU report, Ukraine has the biggest tech talent pool in comparison to other Eastern European countries. Moreover, they offer the best price-quality ratio, leveraging the latest technologies and offering out-of-the-now solutions. Hiring developers from Ukraine located in the heart of Europe will pay off within the shortest period.
Myth 3 – Cultural and language differences
The country is located on the crossroads of Europe and shares the same cultural values. As it was mentioned previously, software developers possess strong English skills and about 85% of them possess the intermediate level.
Myth 4 – Low level of security
Security is the key priority for Ukrainian software developers. Data protection and protection of intellectual property are regulated by legislation and contracts. The factor that matters when it comes to security issues is the reliability of a vendor, not the location.
Reliability and success stories
Despite the global positive image of the country, there are still customers that hesitate to trust software development to custom software development companies in Ukraine. About 85% of software services in Ukraine are supplied to foreign countries. The most popular services include web and mobile app development, system integration solutions, cloud solutions etc. Outsource software development companies in Ukraine offer flexible cooperation conditions, enabling them to choose the best pricing and cooperation, models.
The level of service in Ukraine comprises a combination of expertise, flexibility, diligence, hard work, and full dedication. However, the level of expertise and the quality of the future product depends on a vendor.
Reasons why Ukraine is a reliable outsourcing destination:
- One of the largest mature outsourcing markets in Europe;
- Solid education and advanced technical skills;
- Software vendor world-renowned market leaders;
- The best possible price-quality ratio;
- Western culture orientation and shared values;
- Perfect location and time zone difference.
Altamira as a software development partner offers stability and reliability. Among the variety of partners to choose from, we are the ones offering transparency, fast time to market, security, and individual approach. Our orientation on the customer’s business needs, stability, and well-tuned processes inside of the company allows delivering the best quality of service. Efficient communication enables the client to move all the concerns away and concentrate on elaboration of the business strategy while we are taking care of the tech aspects. Inspired by the success of our clients, the Altamira is constantly moving forward in the tech world and it allows us to be among the best software developing partners for you!
Bottom Line
Ukraine has become one of the leading outsourcing destinations in Europe. Among the reasons why global leaders choose Ukraine as an outsourcing destination is the rich tech talent pool, advanced expertise, safety, and guarantee of stable and productive cooperation. The old stereotypes concerning Ukraine are left behind. The reputation of this software destination and the quality of service Ukrainian software companies offer is the best proof that the sky is the limit! the IT cluster is actively developing expanding the tech horizons and attracting global companies who trust their solutions to Ukrainian developers!
