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Software Development Industry in Israel

June 27, 2019
#Outsourcing #SoftwareDevelopment

Israeli software development industry is growing but it still has hurdles. To overcome them they might find a helping hand in the form of Russian partners. Here’s how.

Looking at the Israeli technology field, you can see just how multifaceted it is. On one hand, you have giant corporations who are well established worldwide. On the other, you have a huge number of tiny startups that have earned Israel the reputation of “Startup Nation”. Depending on who you ask, the percentage of IT businesses is somewhere between 15% and 60%. For such a small region that is an impressive number.

It makes sense, however. This nation has thousands of highly educated professionals. In addition to that, it is one of the most militarized states in the world. While in mandatory service, many take the opportunity to study military technology, work on cybersecurity, and develop their skills. As a result, the country has some of the brightest minds and deservedly takes third place among the most educated nations in the world.

So, What About Russia?

Russia is incredibly well established on a global scale when it comes to information technology and software development. It rightfully boasts some of the best developers and high-quality code. The local technical education is at an incredibly high level. This, along with a high population, has resulted in a great number of IT specialists and companies.

It is obvious that both countries have amazing minds working in the tech field, a wide variety of big and small companies, and a great standard of education. The main difference is the direction smaller teams choose. While the Israeli people prefer creating new startups, Russians open outsourcing firms to lend their expertise to others, and it is quite successful at it too. The country has become one of the most popular IT outsourcing providers in the global market.

Language Policy

Hebrew is used in all facets of Israeli life, from street signs to documentation. However, 85% of Israelis speak English. As a result, even if you don’t know the national language, it is still possible to communicate with the vast majority of the local people. Despite the fact that English is so widely spoken, Hebrew is massively dominant in the nation’s culture. If you’re planning on finding a job and living there, you’re going to face many difficulties if you don’t know the language. In terms of technology, there are some difficulties too. For example, Hebrew is written right to left. User interfaces of most applications and websites have to be developed with that in mind. Overall, the structure of the language is very different from western ones too.

You can see a similar situation in Russia. However, their language is more accessible. It is written from left to right and has many recognizable Latin symbols. While the percentage of English speakers is significantly lower, only 6% according to the 2014 census, this is still over 7.5 million people – more than the entire adult population of Israel. The people working in the software development industry are all highly educated and finding a specialist who doesn’t speak English is a difficult task. It’s quite the opposite, many have incredible communication skills and knowledge of multiple languages.

Despite possessing such different languages, both countries have very little problem communicating with each other. Many Israelis even fluently speak Russian. However, both of them can always find a common link in English, the universal language of technology.

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Time Zone

Israel and the European part of Russia are located in the same time zone. This means Russian developers can communicate with all Israeli businesses with nobody having to adapt their working schedule.

Both nations have vast experience working with clients from all parts of the globe. But, while working together, there is no need to go beyond the normal working hours. This natural connection is vastly beneficial for business since there will never be any delays or miscommunications because of time.

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Pros and Cons of Israel’s IT

Israeli technology seemingly has all the tools to be successful. It has a great infrastructure. The major cities like Tel Aviv and Jerusalem have everything necessary to establish a global business. Some of the best tech universities are located there, such as Tel Aviv University and Technion, Israel Institute of Technology. In addition, local enterprises receive a lot of financial support in the form of investments from large international corporations. Not to mention that the local people are extremely creative and innovative.

But herein lies the problem. Despite the availability of opportunities and high demand for software developers, there just aren’t enough of them. The low population of the country is the primary reason for that. Entrepreneurially and creatively minded professionals often choose to start new companies rather than be employed by an existing one. In turn, many of them close because nobody wants to work for them. That is the vicious cycle that the local software industry currently faces.

Are these problems fixable?

Israeli software development industry definitely shows a lot of promise. There are companies creating games, enterprise applications, working with databases and everything you can potentially think of. However, with a large number of smart people and ideas, there is a need for someone to make these ideas into reality. To deal with this problem, one of the two following solutions are often used:

  • They attract foreign developers to move to their country.
  • They outsource their development.

The first option rarely works and, even when it does, usually only in the short term. This country is very connected. Most of the companies require previous experience with local firms from their potential work candidates. This makes this solution harder than the problem they are trying to make easier. Then there is the issue of the language barrier and general difficulty in cultural adaptation. As a result, even those developers who successfully manage to find a job don’t tend to stay for long.

Outsourcing development is increasing in popularity among both the local startups and huge companies. This practice is more successful, even though many still don’t consider it an option. Not only do you solve the problem of staff deficit, but you also save money and resources. You can concentrate your attention on other matters while the work is actively being done in your background. This greatly increases the profits of any business, provided they choose a reliable outsourcing company.

How can we help?

Outsourcing definitely has its risks. According to multiple sources, the most widely reported are difficulties in communication, loss of control, hidden costs, big time zone differences, and security. We have built our process with these issues in mind in order to provide our clients with the best possible outsourcing experience.

Our transparent Agile development methodology means that you are always aware of the work being done. More than that, our clients can make suggestions at any time and we will do everything to implement them in the final product. At the start of our process, we provide a detailed breakdown of the cost. This ensures the client knows exactly what will be done, and what they will pay for. We also provide a non-disclosure agreement (NDA), so the ideas of our customers will not be stolen. In addition to that, all of our employees possess great communication skills and speak English fluently.

In Conclusion

The software development industry in both Israel and Russia shows great potential for a successful partnership. Their developers share the same creative way of thinking, great education, programming skills, and a good knowledge of English. They even live in the same time zone. This has resulted in a number of partnerships, such as technology incubators, in each other’s countries, Yandex School and Tel Aviv University collaborations, and cooperation in scientific work in general. By working together, Russian and Israeli software development industries can easily establish a mutually beneficial long-term business relationshipr.

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