Application Development Outsourcing: Belitsoft's 2026 Market Report

The Belitsoft [https://belitsoft.com/] bespoke enterprise application development firm notes that new ideas for business software are emerging at a rapid pace. For instance, TechCrunch reports that companies in Europe and Israel utilizing AI are now receiving significantly more funding from investors. In 2025, US companies invested money into European and Israeli cloud and AI companies. For every dollar they put in, they received about 66 cents back. A strong, worldwide ecosystem for AI-focused software platforms is starting to take shape, and the funding gap is getting smaller.

Developers Are Working on and Releasing Code Faster than Ever Before

The Octoverse study from GitHub shows that the speed of software development has significantly changed. A year ago, developers made about a billion code commits and added more than 230 new code repositories every minute. Teams are relying more and more on fully automated processes to keep up with this incredible speed without sacrificing quality. New code is rapidly tested, created, and deployed. Additionally, they employ a range of technologies, such as feature flags, that allow them to safely integrate incomplete work into the finished product.

Specific Patterns That Show This Speeding Up

Based on these results, some important trends are starting to emerge:

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Business Strategy is Moving Away from Digital-First and Toward AI-First: The entrepreneur notes that a survey discovered that 67% of businesses are already allocating at least 10% of their digital budget to AI. As businesses transition towards AI-first projects, this expenditure is likely to rise sharply in 2025. In fact, 27% of businesses are ready to utilize AI agents (automated programs that perform tasks) on a large scale, and 61% are still testing them. Consequently, the amount of money spent on AI agents is expected to go up by three to four times in 2025, which will often result in less funding for other projects. AI has become a crucial aspect for business leaders. Eighty-one percent say they will spend more on digital projects this year than they did last year. The most important of these is AI.

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The Surge of AI Development Tools and Vibe Coding: Business Insider reports on how rapidly businesses that utilize AI to write code are growing. AI coding assistants, known as "vibe coding," are replacing a significant number of outdated low-code and no-code solutions that did not always function effectively. With vibe coding, users can create apps using simple English instructions.

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Managing Risks Linked to AI-Generated Code: Experts say that vibe coding can make it much faster to make the first prototypes. It does, however, have some problems that may not be immediately apparent unless you use it carefully. Some of these risks include writing code that is not secure, accidentally sharing private information, and taking on too much technical debt. Experts advise being cautious. You can use AI without limits for front-end or user interface work (the green zone), but you need to be much more careful when it comes to important business logic (the red zone). They say that adding expert tools to AI will help keep them safe and in check.

Outsourcing the Development of Applications in 2026

The Deloitte Global Outsourcing Survey states that when it comes to outsourcing, finding qualified workers and being flexible are just as important as keeping costs low. In other words, companies are looking for help from people outside the company who have skills that are hard to find inside the company, such as a deep understanding of AI and machine learning or cloud-native DevOps. According to the survey, 83% of the business leaders who participated said they already use AI in the services they hire out. This indicates how companies use AI tools to enhance testing, maintenance, and development.

Two of the best things about outsourcing are that it is fast and flexible. Companies can easily and quickly change the size of their teams thanks to global talent pools. Outsourcing can also help you get your product to market faster because many outside partners work on development all the time, every day of the week, and in different time zones. More and more businesses are using outcome-based contracts as they hire other businesses to do work for them. Instead of just paying suppliers by the hour or the number of workers, companies now hold them accountable for key performance indicators (KPIs) such as faster releases, more uptime, and quality measures. The ISG Provider Lens study found that American companies prefer contracts that focus on results and reward strength and creativity. For example, a contract might reward suppliers for faster release cycles or penalize them if significant defects make it to production.

Nearshoring and specialized hubs are still growing in size. A lot of businesses in North America and Western Europe work with development hubs in Eastern Europe, Latin America, or Asia to save money and find skilled workers. Businesses in Europe should still hire people from Eastern Europe.

These nearshore models help fill the gap because there aren't enough skilled workers in the area. They also make it easier for people from different cultures and time zones to work together. Rules can affect the decisions that businesses make. For example, businesses in the health and finance fields often hire other businesses in the same field or area to help them follow data rules more easily.

Co-innovation is another trend. Outsourcing employees are expected to do more than just complete tasks; they are also expected to offer guidance. For example, a bank may collaborate with a systems integrator to develop an AI-powered fraud detection system, in addition to updating outdated code. According to the ISG report, providers are accelerating modernization through the use of generative AI (GenAI) and AI-assisted refactoring. For instance, they are automatically converting outdated COBOL logic into microservices for the cloud. These AI-powered services create value faster than traditional hand-coding.

In the near future, outsourcing will be about more than just eliminating tasks, according to CTOs and company executives. Value-based relationships are becoming more prevalent in outsourcing delivery models, according to Deloitte. In terms of digital strategy, vendors are expected to become enduring partners. Access to innovation and agile scale-up/down capability are the main motivators, apart from cost. Many companies that are focusing on digital transformation (81% plan to spend more on IT) see outsourcing as a way to speed up the process.

Of course, there are drawbacks to outsourcing, including an increased workload for managers, concerns about intellectual property, and the need for clear communication. However, best practices are beginning to emerge by 2026. A lot of companies, for instance, build big Vendor Management Offices (VMOs) and use the same DevOps tools (pipelines, shared repositories) for their own teams and the teams of their vendors. To ensure that outsourced engineers are appropriately integrated into agile teams, they collaborate to conduct security assessments and employ collaboration technologies. The aforementioned trends may be strengthened by outsourcing. For instance, companies can employ cloud and AI experts from around the globe to create innovative features that would be challenging to implement internally.

In conclusion, outsourcing has grown to include more than just cheap labor. Research indicates that it facilitates the acquisition of novel ideas. Deloitte states that AI integration and outcome-driven models are changing how companies find new suppliers. The most successful companies will use outsourcing as part of a mixed strategy that includes internal teams, offshore partners, and even Global In-house Centers (GICs) to build the next generation of apps on a large scale.

The process of developing corporate applications will be significantly different in 2026 than it is today. Every stage of the software lifecycle will utilize AI-powered tools and architectures, and creative software delivery methods will be the most widely used. These trends - agile, cloud-native systems with AI integrated, created by teams of individuals from various fields, including citizen developers and international partners - are being quickly adopted by businesses in the United States and Europe. The headlines and data show that the benefits are clear: faster innovation, better user experiences, and a competitive edge.

The message is clear: tech CEOs and CTOs should use AI, low-code, and cloud-native methods now, but only if they are well-managed. Put money into people and relationships that can effectively utilize these tools, such as outsourcing agreements. Those who do will be in a good position to lead their fields when the next phase of the digital transformation era starts in 2026 and continues on.

About the Author:

Image: https://www.abnewswire.com/upload/2026/02/520b25a3ec692dea91fda6ae15e4e160.jpg

Dmitry Baraishuk is a partner and Chief Innovation Officer at a software development company Belitsoft [https://belitsoft.com/] (a Noventiq company). He has been leading a department specializing in custom software development for 20 years. The department has hundreds of successful projects in AI software development, healthcare and finance IT consulting, application modernization, cloud migration, data analytics implementation, and more for startups and enterprises in the US, UK, and Canada.

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