Offshore Software Development is the practice of outsourcing software development services to another country, typically one with lower labor costs and an abundant IT workforce.
Businesses adopt this model to reduce expenses, scale operations quickly, and gain access to highly skilled engineers without the need for direct in-house hiring.
1. Global IT Spending Continues to Grow Strongly
In 2025, global IT spending is projected to reach $5.74 trillion, marking a 9.3% increase compared to 2024. This growth is driven by investments in artificial intelligence (AI), cloud computing, and other advanced technology services.
2. Japan Faces a Serious Shortage of IT Talent
Japan is experiencing a severe shortage of IT professionals, with a talent gap rate reaching 85%—the highest in the world and over 10% higher than the global average. Although the average unemployment rate fell to 2.5% in fiscal year 2024, the labor market remains tight due to demand far exceeding supply.
To address this issue, Japan has significantly increased foreign labor recruitment, reaching a record 2.3 million foreign workers as of October 2024, up 12.4% from the previous year.
3. Vietnam Emerges as a Leading Offshore Software Destination
Vietnam is rapidly becoming a key software outsourcing hub in Asia, with an expected annual growth rate of 8.48% from 2024 to 2029. In 2024, the global software outsourcing market was valued at approximately $122 billion, and it is projected to reach $283 billion by 2031, with an annual growth rate of 10.13%.
Vietnam is highly regarded for its competitive costs, skilled software engineering workforce, and strong English communication capabilities. Companies like Saigon Technology are leading the field by offering high-quality software development services at reasonable costs.
4. Outsourcing Software: A Solution for Japanese Businesses
Facing high development costs and a shortage of IT manpower, many Japanese companies are turning to software outsourcing in Vietnam. This not only helps reduce expenses but also ensures product quality and project timelines.
Offshore software development is becoming an optimal solution that enables businesses to save costs, address workforce shortages, and maintain high-quality outcomes. It is a strategic option worth considering for companies looking to expand their technological capabilities effectively.
