In a recent study by Computer Economics, 33 percent of companies surveyed said that they were currently outsourcing application development. That’s about a 20 percent drop from the more than 50 percent of companies that were outsourcing app development in the previous two years.
“Such a precipitous drop indicates the overriding factor driving the downturn was the deepening recession, which caused many organizations to curtail spending on new initiatives and delay ongoing projects where possible,” says the report. “As application development is project-based, application development outsourcing activity is far more subject to swings in the economic cycle than outsourcing of data center, help desk or other IT functions. Outsourcing activity declined across the board last year, but no single function declined more than application development.”
Despite the decline, application development is still the IT activity most likely to be outsourced, closely followed by application maintenance. Security is the category least likely to be outsourced.