Software development crisis

Software is not eating the world

All the business say that there are too few developers in our modern world. Large, medium and small businesses need the developers. Frontend and backend programmers, designers. Specialist’s rate can reach the $200 per hour!
However, the customers complain about the high price, saying that the development market is overheated. Those clients don’t understand one simple thing: mostly, developer’s price contains from the selling costs. Neither for knowledges nor expertise, but for sell. Clients are still buying the IT services in old-fashioned way. The one who sells better is making money. Despite the fact that the location of developers doesn’t matter in IT market, medium and large business prefer personal meetings with colorful and beautiful presentations, which usually won’t let to make the right decision.

Meetings with the customers, wearing white shirts, showing breathtaking presentations, fancy office in Central London or New York, the first lines in the rankings, expensive advertising — that’s the basis of “overheated” prices, not the lack of supply.

Let’s try to understand what is this market and what rules it works.

I suggest to divide the entire development market in five categories:

Each of these groups is intended for absolutely different target audiences of clients, although they can overlap. It is not always possible to find clear criteria for differentiation of these groups, especially in the case of freelancers and prolancers. So I suggest to start with them.

From the point of view of a customer, in any of the freelance platforms there is always a great deal of unpredictability and unknown. You order services and just hope for the best, sometimes you get lucky, sometimes you don’t.

On such platforms no one thoroughly checks the contractor. Also, no one gives guarantees that the work will be done on time — hiring a service provider you never know what can happen to them — they have to move, they got sick, they are going camping, and not everyone will warn you in advance, or will ask for an extra day, most simply cease to communicate and disappear for an indefinite period of time. The only risk the contractor is facing is their rating on a particular resource, but because there is huge number of these resources, he or she doesn’t particularly value this rating anyway.

Of course, it doesn’t mean that one should never use freelance sites. This is the only option on the development market where you can get the maximum return from the labor for the lowest price, if you are lucky, of course. But to be completely serious, the main problem, in my opinion is not in the freelance platforms, and not even that freelancers don’t value their reputation, but it is a problem of understanding that for he process of development, hiring just one person does not help at all. For the development one needs a team of people with different expertise, and to to hope that one person will be competent in all of these areas of expertise, or that they will quickly get on with unfamiliar people in a new workplace is absolute stupidity.

This market is not yet formed completely, the main challenges here are in two different spheres:

On the whole, the Prolance market is much more predictable, but is also more expensive. In my opinion, the main innovations in development will be in this particular sphere. The only serious con is the fact that development is not a one person task, and there are less jobs are executed using the principle of waterfall.

There are more and more agile frameworks being introduced. But the mechanism of working with agile frameworks, as far as I know, has not been offered by a single platform. But this is where the future is.

I would conventionally divide this group in three categories. Two of them are ‘business as usual’ and experimental companies, that do the dirty work for others. The price for the services of such companies varies between the price of prolancers and the price of the services of unknown agency.

The first category I refer to as ‘business as usual’. It is a team of several people who work on the development of customized software. There is a great number of such companies, therefore it is tough to choose any one of them, while the price is highly dependent on the region. If we are talking about the US — there’s one price, if we take India or Ukraine — the price is much lower, but problems arise with management, time difference and the lack of a unified process.

Such companies only work on projects for transnational companies and the public sector. Their main specialization is complex back-end projects. All of them focus on working for T&M and sell people’s labor with 100% utilization.

If you get the gist of my reasoning, then you will come to the following conclusions:

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