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Six things to know when hiring a software development company

Read Time 10 mins | Written by: Cole

Six things to know when hiring a software development company

The pace of digital transformation keeps accelerating, budgets are tighter, and most companies have fewer software engineers on staff than a few years ago. Everyone still has a product roadmap to build with less resources – and the roadmaps aren’t getting any less complex. 

That’s why product leaders at Fortune 500 and venture-funded companies hire software development companies to build their mission-critical systems and apps. 

It’s more and more common for CTOs, CIOs, VPs, and other product leaders to hire modern application development services  (MADS) companies. MADS providers build products faster than you can hire for, cost less than the fully burdened costs of FTEs, and deliver high quality software solutions. You just have to find a software development company you can trust. 

There’s a maze of MADS providers to choose from. Some are global consultancies, others are small custom shops, and many use off-shore developers. The ones you can trust work in your time zones, are cost-effective but not cheap, and have expert Agile teams ready to build world-class software with you.

They also have a unique set of capabilities you can identify when you’re ready to hire a software development company. Here are the six main things you need to look for.

What should software development companies be good at?

You need a company that builds enterprise software and systems at virtually unlimited scale. They need to know Agile DevOps and practice continuous delivery at the same (or higher) competence than internal engineering teams. It’s a tall order that many custom development companies can’t fill – but some can.

The kind of software development company you want to hire delivers full-stack agile development from product discovery to launch. You can engage them and spin up your product development faster (and more cost-effectively) than hiring internal resources. They build apps and data solutions with a cloud-native approach, know APIs inside and out, can connect your back-office systems, and work with your code libraries (even improve them).

The companies that can do all of those things (and more) do these six things extremely well. 

1. Cloud-native development and architecture

Kubernetes, containers, serverless computing, EDGE computing, cloud data warehouses – these cloud-native technologies power applications that run seamlessly across different cloud environments. Software development companies use these to enable faster deployment, improve scalability, and reduce your infrastructure costs.

Main benefits of cloud-native development:

  • Faster time-to-market
  • Scalability
  • Resilience and high-availability
  • Cost optimization
  • Improved observability and maintainability

Legacy infrastructure doesn’t cut it anymore – everyone has to build on AWS, Google Cloud, or Azure for the flexibility and cost savings. Hiring a company that knows cloud-native development allows you to respond to changing news, act on new ideas, and run scalable applications more cost-efficiently than before.

2. API-first design and developer tools

Everyone knows APIs are crucial but 95% experience challenges implementing them. Software development companies worth hiring specialize in API-driven development – they can build custom APIs and connect any third-party APIs you need. This makes it possible to build applications using modular, reusable components that communicate through standardized interfaces. 

Main benefits of API-centered development: 

  • Improved customer experience
  • Accelerated innovation
  • Better collaboration among internal development teams
  • Improved collaboration and joint development with partners and third-party dev teams
  • Improved developer experience 

Your API strategy should include building developer tools and portals for internal and external developers to interface with your APIs. This approach enables greater interoperability and flexibility, allowing your business to increase productivity, drive innovation, and create new revenue streams. 

3. Microservices

Microservices architecture breaks down your applications into smaller, independent components that can be quickly developed, deployed, and scaled. Software development companies that build with microservices give you greater flexibility, scalability, and resilience than traditional architectures.

Main benefits of microservices: 

  • Improved scalability
  • Fault isolation
  • Programming language and tech agnostic
  • Simpler deployment
  • Faster time-to-market
  • Easier experimentation and innovation

Microservices are a crucial component of cloud-native and API-first development. A 2020 O'Reilly survey found that 61% of respondents used microservices architecture in their application development, with an additional 28% considering its adoption. Finding a software development company that is comfortable with microservices is crucial to growing. 

4. Fully-managed data capabilities 

A 2020 report by IDC estimates that organizations can achieve up to 56% reduction in operational costs over five years by using fully managed database services like Amazon RDS, compared to managing databases on-premises.

You want to hire a software development company that knows how to manage your data lifecycle securely in cloud-based warehouses. It’s a critical step toward limitless application scale, low-latency access to data, and advanced security and governance features.

Main benefits of fully managed data: 

  • Cost savings
  • Scalability
  • Operational efficiency
  • Reliability and performance
  • Security and compliance

Fully-managed data services give your DevOps team more time to focus on building and deploying applications.

5. AI/ML implementation 

Now everyone can use AWS Bedrock to build and scale generative AI applications. You might also need to use OpenAI’s API to build an internal ChatGPT-like solution to maintain data security and while giving your workforce the efficiency multiplier of LLMs. 

Senior software engineers who know how to do this are in high demand, hard to hire, and take a long time to onboard. But you can hire a software development company with AI/ML experts to build these solutions for you quickly, cost effectively, and without the same trial and error. 

Main benefits of fully managed data: 

  • Force multiplier for workforce productivity
  • Improved decision-making
  • Increased efficiency through automation
  • Enhanced customer experience
  • Build new custom AI/ML apps

With cloud-native development, APIs, microservices, and fully-managed data taken care of by your software development company, you’ll position yourself to launch AI/ML capabilities faster than ever.

6. Software delivery with Agile DevOps

Agile DevOps is a combination of Agile software development methodologies and DevOps practices. This combination improves speed, quality, and collaboration in modern application development efforts. 

It brings developers, operations teams, and other stakeholders together throughout the entire software development lifecycle, fostering a culture of shared responsibility, continuous improvement, and rapid delivery.

Main benefits of Agile DevOps: 

  • Faster delivery and shorter release cycles
  • Improved collaboration and communication
  • Increased automation
  • Continuous integration and continuous deployment (CI/CD)
  • Monitoring and observability
  • Enhanced security and compliance

Agile DevOps also employ CI/CD pipelines to automatically build, test, and deploy code changes, ensuring the application is always in a releasable state. This reduces the risk of integration problems and allows for rapid feedback on code quality

Now that you know what you’re looking for, it’s time to start sorting through options. 


What are the different types of software development companies?

When most people think of hiring software development companies they think of outsourcing to cheap labor sources. That’s one way to save money, but not a good choice for quality software. And it doesn’t support long-term company scale and financial health. Offshore firms aren’t going to build you world-class software with cloud-native architecture and AI/ML capabilities. 

On the other end of the spectrum, you could hire a giant tech consultancy. You’ll get quality software, but it’ll be expensive and you won’t have direct access to the senior software engineers you’re working with. 

Ideally, you find a company that can build out your roadmap at the same or higher quality as a seasoned internal team, but you save money. They should work in your time zones, know your technology, and be able to handle everything a global business needs – from enterprise software integrations to data security.

Here’s a quick overview of the kinds of software development companies you can choose from. 

  • Offshore firms – This is what most people think of as “outsourcing”. You find teams in countries with lower labor costs than the US. They offer extremely cheap software development services by leveraging lower wages, lower overhead costs, and potential tax benefits. 

    Examples of popular offshore destinations are India, Eastern Europe, and Southeast Asia. They have a much lower sticker price compared to other options, but lack in all the important areas – senior software engineers, software quality, speed, data security, and technology expertise.

  • Nearshore firms – These countries are closer to home. They work in your time zone and offer some better quality work. It’s easier to communicate with them, track progress, and build solutions with the right cultural context. 

    Examples of nearshore locations for US clients include Mexico, Canada, and countries in Central and South America. You can still save money working with these firms and quality goes up a bit, but they still don’t have senior-level software engineers and product teams.

  • Large consultancies – These are companies that like IBM and Deloitte. Multinational consultancies with thousands of employees across the globe. They can build quality software and give you expert engineers and agile teams. They even provide end-to-end solutions, from strategy and design to implementation.

    But they’re very expensive and you’ll have to bring their engineers on-site. They’re not remote first organizations and they’re slower to get started on projects. You’ll get access to engineers, but they might be working on other projects and not have as munich personal bandwidth for your engagement. 

  • Internal labs – Some companies have enough money to fund an internal software development lab. You get clear control over the development process, better alignment with business goals and culture, and improved knowledge retention. But it takes years of focused effort and millions of dollars to hire, train, and retain this kind of talent. 

    This is a long-term investment in hiring, infrastructure, and employee benefits. For some it’s worth it, but for many venture funded companies and Fortune 500 working with less resources, it’s not a cost-effective way to build products faster. 

Ultimately, you want to hire a software development company that’s somewhere in between large consultancies and internal labs. That’s where you find the right balance of quality, speed, and cost. The companies that sit in this niche can get started quickly, provide full-stack agile development and build enterprise-grade software and security solutions. 

They’ll still be less expensive than building and maintaining your own internal lab, but you’ll get all the benefits.

Where do I find one?

You already have. Codingscape gets up to speed faster than other firms (or internal recruiting) to start delivering software you need. We’ve built world-class software, customer experiences, and development processes for Fortune 500 and venture-funded companies for over 20 years. Zappos, Twilio, and Veho are just a few of the companies we've built software for.

We’d love to talk to you about building out your product roadmap together. You can schedule a time to talk with us here. No hassle, no expectations, just answers.


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Cole is Codingscape's Content Marketing Strategist & Copywriter.