Many factors made offshore software development a popular trend among many companies in both European and American countries. For example, the value of IT outsourcing in North America in 2001 was $59 billion. Key drivers in offshore software development growth increased revenue potential, selling capabilities to outside users, increased process effectiveness, freeing up internal resources, company philosophy of outsourcing non-core activities, lack of skill set adequate, cost control and access to world-class capabilities. Software companies significantly increase their revenue by entering OSD contracts in addition to production software for the marketplace. By signing a contract, customers can avoid unnecessary expenses by setting up their own in-house software development infrastructure. Many companies offer custom web development services with the intention of offering the most cost effective solutions.

OSD offers greater process efficiencies for customers. All processes, such as development, maintenance and other parts of the software life cycle, are carried out by professionals specialized in this type of work. This makes it possible to avoid many organizational, marketing and management errors that are discovered more frequently. This may result in decreased consumer order cycle time. OSD provides the ability to free up internal resources where customers can direct the huge resources usually required by internal development to other activities. The supplier, in turn, is free to promote and deliver a specific product to the market. This is often a more difficult process than announcing expansion services, as it allows you to focus on core software development activities.

The IT function has always been difficult to manage in organizations. Similarly, custom web development projects require in-depth and up-to-date technical knowledge, which most business managers lack. Due to this discrepancy, many software projects are supplied across national borders. With the growing popularity of ‘business process outsourcing’, many companies have begun to agree to outsource core activities, concentrating on primary business processes. The lack of appropriate skills is one factor behind the growing importance of OSD. In Germany, for example, the whole number of programmer vacancy estimates for the period 2001-2005 was 210,000. With OSD, the Customer is freed from most of the fixed costs of development. The provider, in turn, can reduce costs due to lower wages, corporate tax rate, rental expenses, etc.

Access to world class capabilities can once again be discovered as one of the key success factors for OSD. With its help, small businesses can get world-class quality services according to international standards because development companies tend to offer high-quality development due to increased competition brought about by globalization. Global outsourcing of custom web development provides a better quality service. Offshore software companies specialize in detailed services such as Java programming language, web-based development, etc., and they are also more skilled than the company’s internal service purchasing department. Here, the outsourcing company gains the advantage of increasing its capabilities from its practices and experiences, especially in offshore contracts, where the client resides in a developed country with a well-established R&D base.