What is An Offshore Development Center? Basics to Know (2023)

With the rising demands of programmers and developers nowadays, IT companies often use offshore development centers when they need more developers to complete their projects. An offshore software development center is becoming even more essential in today’s fast technological growth. It can help companies with their project completion and business expansion plan. Here are the basics you need to know about an offshore software development center and its meaning:

The Offshore Development Center Meaning

What is an offshore development center? The offshore software development center is the company that handles various software development projects and services in another country. The country where the offshore development center is located can vary. Still, it is often the country that has lower software development costs. 

A company can build their offshore development center to help them work on various projects they need to get done. The offshore development center will act as the subsidiary company to the primary company, or they might act as the supporting company. The offshore development center can also provide offshore development center services for other businesses.

Benefits of Offshore Software Development Center for IT Companies

Offshore development centers (ODC) can benefit IT companies, such as those with a huge workload and plenty of projects to complete. First, ODC can help speed up the progress for the projects they are working on. So, the company can expect their software development projects to complete on time or earlier than scheduled. Second, ODC can also help lower the software development costs for IT companies, which can be very expensive if they don’t assign some development work to the offshore development center.

It’s also important to note that offshore software development centers can also become the initial step for the company to expand their business overseas, such as in developed countries. ODC can become the company’s representative in such countries. They can provide various services, such as sales, support, customer care, etc.

Disadvantages of Offshore Development Center

Aside from the benefits, there are also some disadvantages of ODC you need to know. For an IT company to build an offshore development center, it will cost them quite a lot of money as an initial investment. They will need to build an office overseas, hire the staff for the offshore development center, pay the overhead costs, and recruit new developers to join their ODC team. 

Also, building the offshore development center in another country requires the primary company to deal with the ODC’s registration process, which can get complicated. IT companies might need to pay more money to get their ODC office established, depending on the country. They also need to wait for months or even years to get the license for their ODC office. There are other disadvantages that IT companies might need to deal with, such as cultural differences, time zone, security risks, communications, and others.

Various Offshore Development Center Models

There are various offshore development center models you can use for your IT company. You will need to pick the offshore development center model suitable for your IT company’s needs and preferences. Here are some offshore development center models available for you to use:

  • Full-Form or Private ODC. With this model, you will allow your customers to get their own offshore software development centers based on their preferences. You will ask your customers which types of offshore development center they want to use, and you will give it to them.
  • Software ODC Classic. It allows your customers to access the human resources from the offshore development centers based on their project requirements. The ODC will help with the software development progress and deploy their development team as necessary based on the customer’s needs.
  • Software ODC Branded. It allows businesses to get an active part in the development process. The ODC will get supervised by the businesses that need the services from the offshore development centers.
  • Software ODC Trust. You can use this model if your business needs the help of ODC to build confidential or one-of-a-kind software with your proprietary design.


You’ve learned the offshore development center meaning. Building your own offshore software development center is an excellent way to expand your IT company’s operations, get more projects done, and lower your overall development costs. You can use it for your own company or offer it to your clients. Offering it to your clients can help businesses expand their development potential without dealing with the hassles of building their offshore development center. 

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