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Offshore vs Nearshore Development: Risks & Benefits [2024]

Last updated on
January 11, 2024


The difference between onshore, offshore, and nearshore development could be described with one picture below.

Compare nearshoring vs offshoring vs onshoring.


Offshore vs Nearshore Development: Risks & Benefits [2024]


If you are rubbing shoulders with software developers or are fresh in the industry – there is a high chance you have heard about the terms offshore, onshore, and nearshore software development.

And while you may be thinking about shores and beaches, there is an actual meaning and difference between all of these phrases.

The ‘shore’ term is connected with software development outsourcing to companies abroad. Knowing that there are markets with skilled and affordable talent, a lot of venture capitalists, small business owners, and startups decide to go this path and outsource to a carefully chosen web development company abroad.

However, when the terms offshore, onshore, and nearshore are brought up – they usually start Googling them and their meanings.

In order to save you some clicks next time, we will explain the difference here.

Onshore software development = comfortable, but pricey

Onshore software development definition

Basically, onshore software development is an outsourcing option that is the closest to your home.

In most cases, this means working with companies that are located in your home country. The advantages of onshore software development are evident – you can work with skilled teams in your own country and speak their language.

However, there is one major concern with this option – the cost.

While offshore and nearshore development cost less, onshore software devs come with a high price tag and therefore cannot compete with the prices of nearshore and offshore development companies.

Offshore software development = affordable, yet hard to maintain

Offshore software development definition

In a nutshell, offshore software development means hiring a team from abroad to do the work remotely and virtually.

It is an option that supports your project needs – however, from further away. India, China, Poland, and Ukraine are some of the most popular countries for offshore software development – and their cost can be hardly beaten compared to the onshore option which is normally expensive for many companies and startups.

Poland could be considered the go-to place regarding offshore software development for a partner from the US.

Why is that?

Compared to India/China/Ukraine you will get developers with better English language skills, with top-notch coding skills, and almost no cultural differences, which really helps on a daily basis.

The only drawback of offshore software development is the fact that working with a software development team located on the other side of the globe comes with major time zone differences. In the case of Poland, a difference between New York City is only 6 hours; which could be even an advantage to speed up the development process, while having two separate development teams working 24/7. 

However, the communication can be a lot more difficult for teams that are not organized.

Still, the numerous benefits including quality, cost, and time efficiency are evident.

A rise of remote development teams

<span class="colorbox1" fs-test-element="box1"><p>Check out the ranking of custom software development companies from various locations.</p></span>

Thanks to more and more advanced technology for developers working remotely or a huge need to develop high-quality software instead of hiring teams for in-house development, the new trend is rising over the past few years.

<blockquote><p>Remote work seems to be the wave of the future. A recent survey of business leaders at the Global Leadership Summit in London found that 34% said more than half their company’s full-time workforce would be working remotely by 2020. A full 25% said more than three-quarters would not work in a traditional office by 2020, which is not some far off, futuristic era. It’s six years from now. </p><p>— Laura Vanderkam, Journalist atFast Company</p></blockquote>

Remote development teams, or so-called team augmentation for IT resources, is a way to build teams globally and on-demand. You don’t have to hire in-house and worry about resources; your focus should be on the core value of the product, and for the rest, you can find skillful resources outside your city, country, or continent.

Understand that a remote or augmented team, ‘delivered’ by a software development company, could be your natural in-house team extension.

Look for partners who will bring additional value along with their coding skills.

Look for engaging, passionate, people to encourage you to make a better product or challenge your user stories.

Nearshore development = a win-win solution

Nearshore software development definition

Last but not least is nearshore development – defined as the ‘in-between choice’ among the two options we described above. Technically, nearshoring works just like offshoring with a single difference being the location.

Nearshore software development companies are basically located in countries with similar time zones or ones with minimal differences.

This not only puts the communication on a higher level – it also adds up the major cost savings and pretty much makes everything a breeze. The possibility for onsite visits is also there, and compared to onshore outsourcing, nearshore software development is basically a win-win situation with no drawbacks.

Additionally, despite the almost null time difference in software development nearshoring, there is also the cultural aspect.

What about the quality of offshore, onshore, and nearshore development?

<span class="colorbox1" fs-test-element="box1"><p>Check out the rates for various outsourcing destinations.</p></span>

If you decide to outsource your software development but still wonder about quality, you should know that in most of the cases, quality depends on the provider you hire. That being said, if you choose the right provider – the quality will absolutely show.

The good side of the story is that even if you make a mistake on your first try, outsourcing allows you to immediately change decisions and plans and eventually come to the perfect solution for your needs (and budget).

Final word

In the end, outsourcing of software development has proven to be very profitable for many startups and companies worldwide. In a connected world driven by the digital era, it is very easy to reap the benefits and have a devoted team that works to their full potential.

Thanks to globalization, a lot of companies have improved their competitive edge and made the choice to outsource.

The bottom line is that whether it’s nearshore, offshore, or onshore – there are numerous software developer teams you can choose from when outsourcing.

If you’re looking for a qualified software development vendor, take a look at one of the comparison lists below:

  1. Top JavaScript Development Companies
  2. Top Node.js Development Companies
  3. Top React Development Companies
  4. Top React Native App Development Companies
  5. Top Fintech Software Development Companies

From our experience, the second thing to check after the right skillset and engagement of your software development partner is communication. Weekly demos, daily progress reports, and a decent level of English are the important points while building a fruitful relationship with your outsourcing partner.

So, have you decided to outsource your software development yet – or are you still thinking about it?

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Matt Warcholinski
Chief Growth Officer

A serial entrepreneur, passionate R&D engineer, with 15 years of experience in the tech industry.

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