NearShore vs. Offshore

NearShore vs. Offshore

Information technology and software development are two of the fastest growing industries in the world. According to Gartner, a global US-based Research Company, the spending for the IT sector is expected to be around $3.7 trillion in 2018. That is a substantial amount, and a huge chunk of this spending is focused on Data Center Systems and Enterprise Software. The advancements in IT have made it almost impossible to grow and survive without embracing these states of the art solutions.

However, the growing demand for IT related products is not being matched by an equal number of qualified professionals entering the market to supply these solutions. Companies are perplexed to see the scarcity of human resources, especially in the US. The most widely used solution for this is to look for quality developers beyond US borders. This is where the concept of nearshore and offshore comes in. Let us explain these terms in more detail:


Nearshore and offshore are two different types of outsourcing techniques that are implemented when technical expertise is required beyond the borders of a certain country. As the name indicates, nearshore is when a company enlists the services of developers that lie within the time zone of the country where the company is based. Some countries that share time zones with US states include Costa Rica and Peru.

While every country has its own respective competencies and weaknesses, when it comes to a certain task, not every country offers favorable workforces for software development. India is considered a good choice but it falls way outside the US time zones. One of the greatest options for US companies looking for nearshore outsourcing is Costa Rica. The country has one of the highest rated quality education systems in Latin America, a stable business environment, a diverse pool of developers available at affordable costs and in case you choose to go there, you’ll be in impressive company; Enterprises like IBM, HP and P&G, to mention a few, have realized the potential and set up offices in Costa Rica, owed to the favorable factors for outsourcing.

Nearshore outsourcing offers a number of benefits over other categories because of the time zones alone. Communication becomes effective and timely, feedbacks are traded efficiently and as a result productivity foregoes a considerable boost, equally favoring both sides of the trade.


It is the opposite of nearshore outsourcing. The work is transferred to professionals in a different time zone. The prime example of this is the amount of services that companies in the US obtain from Indian developers. This is extremely cost effective because the hourly rates are as low as $20, but it comes with a plethora of drawbacks.

There are extensive hassles in offshore work. Communication is delayed due to the time barriers, causing losses in production and customer experiences. Then if we consider India as an example, the language and cultural differences are quite often a cause of discontent. And last but not least, the stress that you receive from the entire operation is enormous.

To conclude, it is safe to say that nearshore outsourcing and its benefits outweigh those of offshoring and hordes of transnational enterprises have banked on these multiple benefits and grown their businesses.


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