Why Google and other successful companies outsource their IT

24th October 2022

It’s no secret that some of the Worlds most successful companies originated from humble beginnings of entrepreneur’s bedrooms and college dormitories. What is less well known is how these now household names used outsourced IT and software development to rapidly expand, and continue to use within their company structures today. Here’s why.

Why successful companies outsource their IT

The two principal reasons why successful companies use outsourcing is to save on cost and to work flexibly; Software development requires highly skilled IT professionals that command high salaries. The attraction of outsourcing is to have access to this skilled workforce for only as long as you need; on key development projects that stimulate growth and better serve your customers.

4 Successful outsourcing models seen in tech companies

For tech start-ups that have grown to become global success stories, each of them has used outsourced development at crucial stages of their growth. The following examples explain the benefits of the outsourcing business model. 

Google – New Markets and ongoing services

Outsourcing has been part of the Google success story from its early days. In the past the search giant outsourced core projects to develop new products such as its Google Ads platform to outsourcing firms. This approach has allowed the firm to enter an entirely new market and one which it now dominates. 

Today, Google sees greater value in outsourcing noncore parts of its business to third party developers, including managing its infrastructure, and maintaining its software and services. This approach is more cost effective and flexible than employing full time staff.

Microsoft – Ongoing services

In 2010 the software firm partnered with Indian outsourcing firm Infosys to manage its IT help desk service. More recently Microsoft made sweeping changes to the way managers could use outsourced resource, focussing on a strict outcome based process, where every project followed consistent key performance indicators and service level agreements. This approach has strengthened the relationships of internal Microsoft employees and their external counterparts while working on development projects. 

WhatsApp – Growth 

The rise and growth of WhatsApp is a classic example of a start-up that took advantage of outsourced development to keep its costs low. With limited starting capital the firm looked to overseas developer talent to build and launch the platform we all know so well. 

While WhatsApp’s own employees focused on operations and customer service responsibilities the firm was able to launch and expand quickly thanks to its outsourced developers.

Skype – New Markets

Skype is another example of a start-up that used outsourced developers at the very start of their growth journey. The platforms Swedish and Danish creators Niklas Zennstrom and Janus Friis accepted at the beginning they didn’t have the expertise to develop the web platform themselves. By reaching out to outsourced expertise at this crucial early stage, Skype grew rapidly. Plus, the company’s creators and their outsourced team forged long-term relationships, becoming strategic partners in Skype’s growth, which ultimately lead its sale to Microsoft in 2011 for $8.5 Billion.

How Small businesses can benefit from outsourced IT management

While the examples of tech giants outsourcing their IT may feel far away from UK small businesses, the outsourcing models preferred by ambitious start-ups and tech entrepreneurs are directly applicable to small businesses that are looking to scale.  

The IT function of your business requires skilled staff and access to hardware to maintain in-house, requiring a significant financial commitment. Outsourcing offers a lower cost option while giving access to up-to-date technologies such as cloud services and Artificial Intelligence solutions. Beyond the IT helpdesk, data security and hosting requirements every business now needs, aspirational small businesses are looking to transform themselves digitally. 

To take your business towards this exciting direction requires software development and a managed approach to your digital operations. Here again we can look back at the examples from tech giants and how they used outsourced software development to offer new services to customers and grow their businesses fast.

Interested in outsourcing? Speak to us

Businesses of all sizes can reap the benefits of outsourced IT to help them grow and reduce costs. To find out more about accessing a network of skilled developers, speak to our team.

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