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Software House

5 Software Outsourcing Success Stories from Biggies

[1] Jack Ma: Who in this room hasn’t heard of him? Jack Ma, Alibaba Group’s co-founder and former executive chairman, is a strong supporter of an economy that is open and driven by the market.ย ย 


Alibaba, which is now known as eBay of China, has 674 million annual active subscribers and a 60% share of the Chinese eCommerce market thanks to the outsourcing strategy. At the height of its 2020 11.11 global shopping festival, Alibaba processed a record 583,000 orders per second. Bravo, you!


The company’s businesses account for more than half of all e-commerce sales in China, according to Investopedia. However, software development was initially outsourced by Jack Ma as well. “Alibaba:” from Jack Ma’s autobiography In his book, “The Inside Story of Jack Ma and the Making of the World’s Biggest Online Marketplace,” he explained how the company decided to outsource as early as 1999 by employing remote developers from the United States. The goal was to appeal to a bilingual audience, which included people who spoke both Chinese and English, and to find people who had better skills than he could find locally.


Alibaba, which is now known as eBay of China, has 674 million annual active subscribers and a 60% share of the Chinese eCommerce market thanks to the outsourcing strategy. Well done!


[2] WhatsApp is a cross-platform, freeware messaging and Voice over IP (VoIP) service that Facebook owns. It is used to send and receive voice and text messages, make and receive video and voice calls, and share media such as images, documents, user locations, and more.


With 1.5 billion active users across 180 countries, you’ll be pleased to learn that software outsourcing is nothing new for WhatsApp. Jan Koum and Brian Acton, who founded WhatsApp, started the company with little money. They were determined to cut costs without sacrificing quality.


As a result, they outsourced their web development to app developers in Russia in order to save money on operations and gain access to highly skilled developers, who might be more expensive to find locally. WhatsApp is the third most downloaded Android app worldwide, and by 2021, there will be 25.6 million WhatsApp users in the United States.


[3] Slack Slack is a proprietary instant messaging platform that is hosted in the cloud. It is a company-wide chatroom meant to take the place of email as the primary method of communication. Users can use its workspaces to organize their communications into channels for group discussions or private one-on-one messages to share files, information, and more in a single location.


Slack is known to outsource its product design, which includes the design of its logo, website, and mobile appโ€”almost the entire look and feelโ€”to a web design company. In 2019, Slack generated revenue of 401 million USD and has more than 10 million daily active users.


[4] Procter & Gamble The Procter & Gamble Company (P&G) is a multinational American consumer goods company that focuses on a variety of personal/consumer health, hygiene, and care products. P&G also experimented with outsourcing and accelerated innovation, something that not many people are aware of.


Outsourcing for established businesses has a slightly different motivation than outsourcing for new businesses. These businesses no longer face a financial constraint, but it is still essential for them to introduce novel products ahead of their rivals. The same was wanted by Proctor and Gamble as well.


They outsourced activities related to research and development in order to radicalize and set new standards for the innovation business model of the company. Former P&G CEO Alan G. Lafley set a goal of acquiring 50% of innovation from outside the company. P&G outsourced IT infrastructure, finance and accounting, human resources, and facilities management for $4.2 billion in 2003.


Innovation productivity increased by 60% as a result, and P&G’s global net sales in 2019 were approximately 67.7 billion US dollars.


[5] Skype Skype is a software for telecommunications that specializes in making video and voice calls over the Internet between computers, tablets, and mobile devices. Video conference calls and instant messaging are also offered by Skype.


The majority of Skype’s software development was outsourced to European web developers. Skype claimed to have a great product idea but no expert web development team to put it into action. Consequently, software outsourcing was successful for them.


Microsoft purchased Skype because of its tremendous success. Skype now has nearly 1 billion downloads and 300 million monthly active users. Everything is because of outsourcing software development.


However, the fact that GitHub actually outsourced its MVP may surprise some of you. The backend of their product was built by a consultant named Scott Chacon, who is also the current CIO of GitHub. Since the founders of GitHub couldn’t afford to hire Scott at the time, they outsourced the development of the MVP to him.


GitHub currently employs more than 40 million developers and has created more than 44 million repositories in the last year. In total, more than 100 million repositories have been hosted on Github.