Startups are often cash-strapped even after succeeding in their recent funding rounds. Larger companies have budgets, too. Cost reduction is a major theme in outsourcing because most IT staff are able to perform their jobs wherever they may live. Costs of living and doing business vary widely by location. Wages, overhead, and benefits for an in-house employee in Silicon Valley can run 2-4 times the cost of outsourcing to an equally skilled developer in Europe.
There’s more to the equation than hiring an in-house software team. You’ll need the office space, hardware, software, organizational structure, and long-term plans with ROI projections to make this a viable investment. So, as many companies start with a Minimum Viable Product, it can also be a good idea to start with a Minimum Viable Office. Once profitable, you might look at having an in-house team, state-of-the-art hardware, and pinball machines.