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Nearshore Software Development in Mexico: Everything you need to know

Software outsourcing in Mexico has experienced a surge in popularity, making it an irreplaceable component in the software development process.  Mexico offers several advantages that software companies are finding attractive, including favorable tax rates, an educated workforce, and lower costs compared to other international prospects.

Mexico is the eleventh-largest economy globally and has a strong history of software development. They are home to highly skilled developers in similar time zones to North American tech hubs.

According to a recent study conducted by Gartner, Mexico ranks third for offshore services and software outsourcing, just behind India and the Philippines.

Read: Nearshore Software Development Industry Report (2024)

How nearshore outsourcing in Mexico can save you time and money

Mexico is currently the 5th largest outsourcer in terms of exports in Latin America. Its IT industry provides over $50 million in revenue, which shows substantial growth in the last few years.

Emerging trends suggest that Mexico, the world's nearshore software outsourcing hotspot, has growth rates of more than 6% for 2021. With it being declared an essential service by the Mexican government, its IT sector grew even during the COVID-19 pandemic.

A recent Select newsletter included survey results on the IT outsourcing industry. According to the report, the industry’s growth is closely linked to segments like smartphones and cloud services—cloud services will play a key role in future growth.

Learn about the benefits of nearshore software outsourcing in Mexico

Nearshore software developers in Mexico can create quality, valuable content on par with top software development companies like IBM and Intel. According to research by market analyst Gartner, “Nearshore delivery can be a strategic solution for cost-sensitive large multinationals while enabling new business models.” Although IT services have been outsourcing since 1995, they surged in 2000 and will continue to grow for the foreseeable future.

The United States and Mexico have a close relationship in investment and trade, mainly due to the North American Free Trade Agreement (NAFTA) and the U.S.–Mexico–Canada Agreement (USMCA). As part of these agreements, Canadian companies can own 100% ownership shares in Mexican enterprises.

Mexico is a member of the G20, the Pacific alliance, and OECD and is home to competitive Fintech regulations via March 2018. Outsourcing will ensure beneficial operating conditions in the region, with a wide range of assets in good hands for businesses.

Spoiler alert: Mexico is the best nearshore software outsourcing option!

Outsourcing your software development to Mexico can provide you with financial benefits that other countries don't offer, namely, not having to pay local or state taxes on corporate earnings. Due to their high rating, Mexico's infrastructure is also well-suited for development.

Computer programming in Mexico is a rapidly growing industry, primarily due to the institutions that have been built to promote the development of infrastructure and outsourcing efforts. For this industry to grow sustainably, there has been a rise in local entrepreneurship sponsored by governments to outsource foreign investments.

U.S. companies show a growing interest in Mexico’s ability to leverage Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). The U.S. has been looking for outsourcing partnerships with Mexico that align with their latest technologies in recent years. Leading organizations like Coca-Cola already rely on Mexico's nearshore solutions to effectively manage business process outsourcing.

Which of the ten Mexican tech centers should you outsource your project to?

When looking for a nearshore location, Mexico can be your destination to develop or outsource software. Like Silicon Valley, Guadalajara and Monterrey represent the second-largest technical industrial centers.

With nearly 20 technological parks, Mexico can attract foreign investments, develop IT skills and create products. The hubs work with nearshore services providers, universities, and governments to help promote different kinds of programs related to IT practices.

In the nearshore outsourcing model, the time zone is of keen importance. There are three parks of note: Monterrey Technology Park, Apodaca Technology Park, and Guadalajara Software Center.

How co-working spaces and accelerators can improve your software company?

Mexico is a hotspot of entrepreneurial activity and IT outsourcing. Recent years have seen co-working spaces and accelerators grow in popularity among startups and freelance designers.

There are now more than 70 coworking spaces in Mexico, but over half are found in the capital. New areas are emerging in every state, with many using innovative applications to attract customers.

Mexico has some of the best and most sought-after accelerators in the region, with a wide variety of high-quality programs and different sorts of investments. Nearshore Software Outsourcing in Mexico helps businesses effectively operate or outsource to make factories more competitive.

Startups in Mexico: With the world’s most active venture capital fund, 360 Startups, and names like 500 Startups and Hatch LATAM, Mexico might be one of your following entrepreneurial destinations.

Software outsourcing offers both nearshore and offshore solutions for companies looking to partner with an IT company in Mexico. This helps to enhance knowledge of foreign languages, spending more time learning about the client's background, location, or issues. Nearshore features all the benefits associated with offshore but often with fewer tradeoffs.

The most commonly used in Mexico are PHP, Java, Microsoft .Net, Python, and Ruby when it comes to programming languages. These languages are mainly used for Android, IOS (Operating System), and Windows operating systems.

Mexico is an increasingly attractive option for nearshore software outsourcing. The country has 800,000 industry professionals and is expected to produce many more skilled graduates.

A recent CBRE report states that Mexico City is the second-best city for technical talent across Latin America. There are more than 160,000 developers per capita, so Mexico City offers skilled labor that may be expensive domestically.

Were you relying on outsourcing and in-demand skills in another country or state? As of 2018, there has been a significant increase in growth rates for hiring software developers. Mexico City (8.8%), Guadalajara (7%), and Monterrey (10%) showed the most significant growth rates—in 2016, those rates were as much as 4% lower in some cases, according to LinkedIn data.

Information about Mexican universities with Information Technology degrees or courses

Mexico is also one of the most abundant countries globally with over 600 universities, ranking top on QDES and Times World University Ranking.

The country’s geographical proximity to the U.S., home to more than 400M inhabitants, makes it an ideal location for providers of nearshore services—offshore outsourcing services performed within 120km (75 miles) of the client’s office. Framework Science is one such provider; with its deep pool of engineering graduates and bilingual employees, it can provide round-the-clock support nowadays.

Mexico incentivized the development of nearshore software outsourcing by opening 120 university-level institutions with 4,000 courses in computer programming, math, and engineering.

What are the criteria used to judge rankings for Mexican universities? 

Two specific things that colleges are graded on are international recognition and reputation.

National Autonomous University of Mexico (UNAM) recruits global analysts and software teams for remote industrialized development.

Mexico City was ranked the 39th best city globally to live by ECA International and 8th out of 131 cities worldwide for the quality of living. Globalization provides unique educational opportunities because just across the border is where UNAM's wealth of intellectual capital thrives.

The University of Guadalajara has four resources for different studies for engineering degrees. They offer computer science theory, software and database engineering, natural language processing Artificial Intelligence, computing networks and cybersecurity, imaging, and virtual reality.

The advantages of Tecnologico de Monterrey (ITESM)

Tec de Monterrey, ranked among the 200 Best Global Universities by QS, is also ranked as one of the best in the region. This university offers degrees in data engineering, science and math, nanotechnology, robotics, digital systems, biotechnology, and computing technologies.

ITESM, an ITESM graduate school in Mexico, offers many different certificate programs in STEM majors. Computer science, nanotechnology, cybersecurity, electronic engineering, Big Data as a business strategy, and more.

Universidad Autonoma de Nuevo Leon offers everything you need to know about Nearshore Software Outsourcing in Mexico.

In Mexico, UANL is Ranked as #666 among the top 1,209 schools as ranked by QS. In Engineering at UANL, students can take degrees in -Electronics and automatization, mechatronics, software technology, computing sciences, information technologies, and system administration. This school ranks as the 1015th engineering school in North America and is well worth looking into "Nearshore Software Outsourcing"!

The university also offers masters in information security, telecommunications, nanotechnology, and information technologies.

Yet another university with exciting and forward-thinking specializations and masters is the National Polytechnic Institute. The school ranked 703th in a QS Best Universities for Engineering ranking article, proving it to be a school to look out for.

Nearshore software outsourcing in Mexico- does language pose a barrier for business?

English speaking skills are essential within Mexico, which mirrors countries in Latin America according to Education First’s 2020 English Proficiency Index.

The National English Program (PRONI) recently instated mandatory English classes that all students need to complete by graduating high school. Despite this mandatory requirement, there has been no guaranteed quality of education and quality of materials and training available. Many corporations still publish any English they need to be written, outside of Mexico respectively.

As software outsourcing to nearshore markets is becoming more popular, offshore developers are becoming more expensive. However, English-speaking Mexican developers are still affordable.

Connectivity is Key for Software Outsourcing

Although most places in Mexico have the same access to the Internet, costs differ based on where you live versus connection quality. The original article provides essential information about the importance of location and how it impacts connection speeds and prices.

One problem that continues to be problematic for many Mexicans living far from major cities is connection speeds. Recently, the Mexican government has been focusing on expanding and fixing mobile infrastructure. However, with connection speeds remaining at red alert due to the lack of cellular towers, they may need to start focusing on this problem, as well.

Nearshore products serve the many business operations in Mexico, including Nearshore companies based in USA companies or other international clients. The communications infrastructure of Mexico is highly developed and mostly privatized. It is connected to more than 30 Intelsat satellites, 2 Solidaridad satellites, Inmarsat mobile satellite stations, and fiber optic cable lines such as the Columbus II, which allows traffic to flow between Mexico, the U.S., Europe, and, ultimately, the rest of the globe.

The future of software outsourcing

Nearshore software outsourcing in Mexico has many benefits, including cost savings to companies that would otherwise have to bring their employees overseas. Employers can achieve these benefits by engaging with companies with physical offices in the country, permitting them to increase productivity without spending extra money. Time differences take having all time zones dialed-in making Mexican employees available 24/7 for their U.S. counterparts.

And, of course, if you want innovation, check out the GII 2020 ranking for Mexico. Coming in second for innovation in Latin America is very reassuring.

When considering nearshore outsourcing to Mexico for your company, there are a variety of beaches, highs, and lows to evaluate. U.S. companies should make sure they keep in mind their availability in Latin America when considering Mexican providers for staff augmentation or projects for nearshore software development services.

Your business can build its team by outsourcing to Framework Science in Mexico. Contact us to get started today.

As of 2023

Market Size

  • The outsourcing market in Mexico reached a total contract value (TCV) of $92.5 billion in 2023, up significantly from $64.6 billion previously.
  • The business process outsourcing (BPO) services market in Mexico is expected to reach $525 billion by 2030.
  • The demand for nearshoring services in Mexico is forecast to grow substantially in 2023 as companies seek to reduce costs and gain access to talent.

Cost Savings

  • Software developers in Mexico earn significantly lower salaries compared to the U.S., allowing companies to achieve substantial cost reductions through nearshoring (estimated at around 67%).