Nearshore Software Development In Mexico: 5 Things That Will Change in 2023

by Gustavo Reyes Quiroga

Nearshore Software Development In Mexico: 5 Things That Will Change in 2023

The nearshore software development industry is constantly evolving. In order to stay ahead of the competition, it's important to understand what trends will be shaping the industry in 2023. There are 5 things that we think will have a major impact on nearshore software development in the coming year. But first, let's discuss what is nearshore software development and why it is needed. 

What is Nearshore Software Development? 

Nearshore software development is a type of outsourcing where companies contract with software development firms in neighboring countries. The main benefit of nearshoring is that it allows companies to access a larger pool of qualified workers at a lower cost than if they were to hire domestically. Additionally, nearshoring can help to reduce language barriers and cultural differences, as workers in neighboring countries are likely to be more familiar with the company's language and values. While nearshoring does have some benefits, it also comes with some risks. For example, if a country's political situation is unstable, it could lead to disruptions in the supply of software developers. Additionally, distance can make communication more difficult, which could impact the quality of the final product. As with any outsourcing arrangement, companies should carefully consider the pros and cons of nearshore software development before entering into a contract. 

Why is It Needed? 

Nearshore software development has become increasingly popular in recent years; here are the reasons why it is needed. 

1. Cost Effective

Nearshoring can help to reduce costs associated with software development. Companies can save money on their projects by taking advantage of lower labor and overhead costs in neighboring countries while still ensuring quality results. 

2. Access to Talent 

Companies have access to a larger pool of talented software developers when they outsource nearshore. This allows them to find the right professionals who are skilled and experienced in the software development process. 

3. Increased Efficiency 

Nearshoring can help increase efficiency due to shorter distances between the client and the developer, which in turn makes communication and collaboration easier. This also reduces the time it takes to get a project completed. 

4. Time-Saving 

Nearshoring can help to save time, as developers are able to work more quickly due to the shorter distances between them and the client. This reduces any delays associated with long-distance communication. 

5. Improved Quality 

When businesses outsource nearshore software development, they have access to experienced professionals who are fully aware of the latest technology and tools. This can lead to improved development quality and better results for the project. 

Nearshore Software Development Market Overview 

1. Much has been said about the outsourcing of jobs to other countries. While some argue that it takes work away from locals, others believe it can be beneficial for both the company and the workers. A recent study by Deloitte found that worldwide outsourcing spending is expected to reach $731 billion by 2023, up from $609 billion in 2018. The report also found that the healthcare, manufacturing, and IT services industries are the most likely to outsource. 

2. Business process outsourcing (BPO) is a rapidly growing industry. According to a recent Grandview Research report, the BPO services market is expected to reach $525 billion by 2030. A number of factors, including the need for cost-effective solutions, the increasing complexity of business processes, and the

shortage of skilled labor, is driving this growth. BPO providers offer a wide range of services, from back-office support to customer service. As businesses increasingly look to outsource non-core functions, the demand for BPO services is expected to continue to grow. 

3. The outsourcing market is booming, with the total contract value (TCV) reaching $92.5 billion. This represents a significant increase from the past when the TCV was $64.6 billion. The rise in the TCV can be attributed to a number of factors, including the increasing need for businesses to focus on their core competencies and the growing availability of mobile and cloud-based services. With more and more businesses turning to outsource, the market is expected to continue to grow in the coming years. 

With these benefits and market overview in mind, let’s take a look at what to expect from nearshore software development in Mexico in 2023: 

5 Things That Will Change in 2023 

Now let's have a look at 5 key changes which will occur in Mexico in 2023: 

1. Increased Demand For Nearshoring Services 

In recent years, nearshoring has become an increasingly popular option for businesses seeking to outsource their software development projects. Nearshoring offers many benefits, including cost savings, skilled labor access, and proximity to major markets. As a result, the demand for nearshoring services in Mexico is expected to grow significantly in 2023. This trend is likely to be driven by organizations looking to reduce their costs and gain access to skilled professionals. In addition, the Mexican government has been investing heavily in the country's nearshoring infrastructure, making it an increasingly attractive destination for businesses looking to outsource their software development projects. With its cost-effective solutions and skilled workforce, Mexico is well-positioned to become a leading provider of nearshoring services in the coming years.

Job Market Level Prospection 2023

2. Strengthening Of The Software Development Ecosystem 

With the increasing demand for nearshoring services, Mexico is expected to strengthen its software development ecosystem in 2023. This will include a range of initiatives, such as investing in new infrastructure and providing training opportunities for local talent. The government is also looking into ways to attract foreign investors and entrepreneurs to create start-ups and other innovative tech products in Mexico. These initiatives are likely to have a positive effect on the Mexican IT industry, creating more jobs and driving investment into the sector. 

3. Improved Technology Expertise 

Mexico is home to some of the most talented software developers in the world, and this expertise is expected to become even stronger in 2023. This will be driven by increased investment in the country’s technology infrastructure and improved access to training opportunities. As a result, Mexican developers will have access to a range of cutting-edge technologies, allowing them to develop innovative products that can compete with those from other countries. 

4. Increased Specialization 

In 2023, Mexico is expected to become more specialized in terms of software development. As the country continues to invest in its nearshoring infrastructure and trains more software developers, it will be able to offer a range of specialized services. For example, Mexican firms may specialize in developing mobile applications or creating artificial intelligence (AI) solutions for businesses. By focusing on providing niche services, companies can become more competitive and better positioned to win contracts from international organizations. 

5. Improved Outsourcing Practices 

In 2023, Mexico is likely to improve its outsourcing practices, offering more transparent and cost-effective solutions for businesses looking to outsource their software development projects. The country's government has already taken steps in this direction, such as implementing a code of ethics and introducing measures to protect intellectual property rights. These measures will likely improve the quality of nearshoring services, making it an even more attractive option for companies looking to reduce their costs and gain access to talented software developers. 

Factors To Consider Before Outsourcing 

When you’re looking to outsource to Mexico, there are a few factors you should consider. 

1. Costs: 

Mexico is often lauded for its cost-effective solutions. Whether you're looking for cheap labor or lower manufacturing costs, the country has a lot to offer. However, it's important to remember that not all providers are created equal. When you're considering doing business in Mexico, it's essential to compare quotes from multiple providers. This way, you can be sure that you're getting the best possible price. Keep in mind that cost isn't the only factor to consider when choosing a provider. You should also look at factors like quality of service and delivery times. With a little research, you can be sure to find a Mexican provider that's a good fit for your business needs. 

2. Quality: 

Mexico has a reputation for being a manufacturing powerhouse, and this is especially true when it comes to nearshoring services. In recent years, Mexican companies have become known for their ability to produce high-quality products at competitive prices. As a result, many companies have begun to look to Mexico as a source for nearshoring services. This trend is likely to continue as more companies discover the benefits of working with Mexican suppliers. In addition to being cost-effective, nearshoring services from Mexico can also help to improve lead times and reduce logistical complexity. As more companies look to Mexican suppliers for their nearshoring needs, the country is poised to become an even bigger force in the global marketplace. 

3. Skillset: 

Mexico's software development industry is on the rise, and it is expected to become even stronger in the next few years. Mexico has a large pool of talented developers, many of whom are well-educated and have experience working with international companies. This expertise is expected to become even stronger in 2023 as more Mexican developers enter the workforce and gain experience. In addition, the Mexican government is investing in developing the country's infrastructure, making it even easier for companies to do business in Mexico. As a result, Mexico is poised to become a major player in the global software development market. 

4. Culture: 

When it comes to working with Mexican providers, culture matters, the country has a rich cultural heritage that can be a great asset to companies looking to outsource their software development projects. In addition, Mexico's diverse population provides an interesting and dynamic work environment that can help foster creativity and innovation. As the country continues to develop its tech industry, its culture will become even more important to companies looking to outsource software development projects. 

5. Security: 

The security of nearshoring services is an increasingly important issue for businesses looking to outsource their software development projects. Mexico has taken steps to protect intellectual property rights and ensure that companies are able to access their data securely. This is especially important for companies who want to protect their sensitive information from potential security threats. In addition, Mexico has recently implemented a framework that allows for easier and more secure data exchange between companies and their Mexican providers. This will make it easier for companies to access the data they need without compromising their security. 

Characteristics of a Good Nearshore Software Development Company 

When it comes to finding the right nearshore software development company for your needs, there are a few key characteristics you should look for. 

1. Experience: 

The software development industry is continuously changing, so it's important to work with a provider that has experience working with the latest technologies and trends. A good nearshore software development company should be able to provide you with high-quality solutions that take advantage of the best practices in the industry. They should also have a track record of successful projects and satisfied clients. 

2. Professional Services: 

Before you commit to working with a provider, make sure that they offer the professional services you need. This includes support for development, testing and debugging, deployment, maintenance and training. A good nearshore software development company should have a team of highly-skilled professionals who are knowledgeable about the latest software development tools and technologies. 

3. Reliability: 

Reliability is key when it comes to working with a nearshore software development company. Make sure that they are available when you need them and can deliver on time without compromising quality. A good provider should have processes in place to ensure that they meet deadlines and provide consistent support throughout the project. 

4. Communication: 

It's important to have good communication with your nearshore software development company. Make sure that they are responsive and able to provide detailed updates on the progress of the project. They should also be willing to take feedback and suggestions in order to make the most out of the project.

5. Technical Proficiency: 

When it comes to working with a nearshore software development company, it's essential to verify their technical proficiency. Make sure that they have experience developing the type of product you need and are familiar with the tools and technologies you plan to use. This will ensure that your project is completed accurately and efficiently. 


The nearshoring industry in Mexico is on the rise, and this trend is set to continue in 2023. Companies looking for cost-effective outsourcing solutions should definitely consider Mexico as a potential provider. With its talented workforce, improved infrastructure, cultural understanding, and secure data transfer, Mexico is an ideal nearshoring destination. By considering the points mentioned above, businesses can find a reliable and professional nearshore software development company in Mexico that meets their needs.

Gustavo Reyes Quiroga

CEO at Alluxi

Develop safe, scalable and delightful mobile and web applications at a fraction of the cost and time is our mission at Alluxi. I’m also Co-founder of the startup Tonder which is aiming to harmonize the payment ecosystem in LATAM.