Successful offshore software development is all about match making. Identify a development team that meets the expectations and needs of the client, and vice-versa. It’s all about alignment. In our last post we discussed the pros and cons of different types of offshore software development teams, but that is only half the equation. For a project to be successful, the right type of development team needs to be paired with the corresponding type of software development client.
Check out the five different types of clients below, and be honest with yourself about what type of software development client you are. Taking an honest look in the mirror to identify your needs and expectations is essential to attracting top vendors, and ensuring a successful engagement.
Large Enterprise Clients
These types of clients are the counterparts to the large enterprise software vendors mentioned above. They typically need months or years of development from larger teams, and often use technologies like Java or Oracle. These projects can be valued in the high hundreds of thousands or millions of dollars.
Mature Clients with Medium-Sized Projects
This type of software development client is generally the most desirable from the perspective of many offshore vendors. They can be loosely described as companies that have experience with offshore software and have budgets of $50k or more. They also tend to have internal resources such as in-house developers or project managers that can co-manage the project. These types of clients are attractive because their experience makes them easier to negotiate and work with. They understand the estimation process, risks associated with scheduling, cost overages, and other aspects of outsourcing. Therefore they are seen as more likely to be realistic clients that are poised to be successful offshore.
Resellers are domestic companies that sell software services to domestic clients, but outsource much or all of the development work overseas.
Offshore groups of all sizes see resellers as highly desirable clients. They have experience with offshore development and can bring steady work to an offshore team without the need for a sales cycle. Resellers tend to be savvy customers. They retain the best offshore development teams and get better rates than ordinary clients for the same work.
Reseller arrangements are usually “white-label,” which means that both client and vendor keep the relationship a secret. So you may never know that the vendor you are negotiating with is the same team that builds software for your competition. Reseller arrangements are particularly popular with software development companies as well as SEO, virtual- assistant, and QA/testing agencies. One thing you can assume, though, is that if you are a small business or a startup you’re probably getting quoted higher rates than you would be if you were a reseller. Resellers are your unseen competition.
Caveat: Resellers are good, but only if they are stable. If your agency/company is just starting out and you aren’t able to send steady work to your vendor, they’ll see you as a potentially painful client.
Small Businesses, Startups, and Individuals
This is the largest and most diverse type of software development client. It includes bloggers, funded startups, small and home businesses, vanity efforts, non-profits, and others. Project sizes typically range from $10,000 to $25,000. This category is typically works with upstart companies, freelancers, boutique teams, and, unfortunately, the bottom-feeding vendors (see here).
Clients in this category have a tough time finding success for a variety of reasons, including:
- Upstart companies are bidding for this type of work, but cannot always deliver quality
- Great boutique firms take these types of clients, but are relatively expensive
- Bottom feeders are abundant and make it hard for these clients to choose
- The marketplace is extremely noisy and confusing
- Many clients in this category are relatively inexperienced, which makes them less attractive to the best vendors
This category is difficult to characterize but easy to understand from a motivation stand- point: Almost everyone would love to get something for nothing. They may even have legitimate reasons — they’re a startup or non-profit, revenues are tight — but if they can just get this new website or app launched they’d be a solid customer, their friend at another company did it succeeded. But the truth is a bottom-feeding client will rarely if ever rise to the top for a legitimate vendor.
If you think you’re going to get quality development for half the rates of other clients or the market, stop and think. Are you acting like a bottom-feeding client? If you are, remember there’s no free lunch in this business.
Got a question about what type of client you are? Let us know in the comments, or feel free to contact us, we’re here to help.