Ukrainian offshore outsourcing began developing in 1990s.
And now Ukraine has become one of the most attractive outsourcing destinations in Eastern Europe.
Indeed, this country can boast the fastest-growing software development history.
One of the main factors that contributed to this rapid development was the fact that more than 40% of the research programs of the former Soviet Union were conducted in Ukraine.
Scientific and research institutes, great amount of higher educational establishments, 30 000 IT professionals graduating annually - all this helps to provide highly-educated engineering and scientific workforce, necessary for IT outsourcing.
The largest concentration of outsourcing companies is observed in Kyiv, the capital of the country.
A lot of companies are situated in Lviv (18%) and Kharkiv (13%), cultural and scientific centres of the right-bank (Lviv) and left-bank (Kharkiv) Ukraine.
Smaller amount of the companies working in the IT area are located in Dnipropetrovsk, Vinnytsia, Odessa and Donetsk - other large cities of the country.
According to the research of GoalEurope, a leading expert on Russian & Eastern European software development, the offshore outsourcing market in Ukraine reached $246 million in 2006.
Number of IT professionals reached more than 7,500 people in 2006.
And this number is constantly growing.
Over 60 German companies are currently outsourcing their software development to Ukraine.
The billing rates charged by the outsourcing providers range between $13 and $45 per hour.
The rates depend significantly on the location of the outsourcing provider, and on a particular experience of the software developer sought.
Due to its geographical position, Ukraine has become attractive for the nearshoring.
The term 'nearshoring' refers to the outsourcing to the country that is relatively close in distance and time zone (or both) to the country of a client.
The more the distance between two countries the more risks appear and the more complicated management process becomes.
That's why sometimes nearshore outsourcing seems more preferable than offshoring.
Main competitors: India, China and Indonesia.
Low-cost labor at these countries attracts clients.
However Ukrainian IT companies have much more advantages, than just low billing rates, due to which customers from all over the world prefer to outsource to Ukraine rather than India or China.
Several reasons - named by the European companies - for outsourcing to Ukraine: 1.
A large number of highly-educated IT professionals available.
2.
Geographical position of the country is very convenient: central part of Europe.
3.
Small time difference which keeps from slowing down the work process.
4.
Well-built infrastructure which provides good connection with other countries.
Great number of international airports is situated in Kyiv, Kharkiv, Lviv and other main Ukrainian cities.
5.
The level of English of Ukrainian professionals is much better than the one in China or India.
6.
Cultural differences are less noticeable compared to those in oriental countries, what makes Ukraine more convinient for conducting business.
7.
Ukrainian professionals are quality-aimed.
8.
Visa-free regime for visitors from EU and North America.
Recently the government has announced the IT sector 'one of its priorities for development'.
With strong governmental support this area has a huge potential.
Basing on the research materials provided by GoalEurope