Quick Guide to Romania IT and Software Industry

Romania is one of the most attractive markets in Europe for technology investment and outsourcing, with a highly skilled and diversified workforce, competitive prices, and a stimulating business environment. Romania’s IT sector has seen continuous growth over the past decade, despite political turbulence and the economic crisis, which is a good indicator of its driving force. Known for their broad technical expertise, their flexibility, enthusiasm and excellent language skills, Romania’s software service providers are a great choice for long-term collaborations in both nearshoring and offshoring businesses.

RomaniaITMapThe large number of specialized Romanian software companies, which has more than tripled over the last decade to +17.000 companies with a total of over 65.000 employees, registered CAGR averaging +15% with only a short-lived setback during the economic crisis.[1] After Romania’s integration in the European Union in 2007, the country’s IT sector has expanded and attracted significant investors, establishing itself among the world’s top outsourcing markets with respect to its advantageous quality / price ratio.

In Romania, IT&C companies enjoy a number of benefits, among them a larger market, easier movement of qualified personnel, readiness for joint ventures, and the access to EU funds, including structural funds.[2] Government support has played a great role through the elimination of the salary tax for software developers, the introduction of the 16% unique taxation on profit, price liberalization, open foreign trade regime and encouragement of fair competition in the informational sectors. The Romanian Government’s vision is to develop and assure an increasing level of quality and security in the IT sector, in order to maintain its growth rate and attractiveness to investors.[3]

Romania’s main competencies in software development and offshoring services include: enterprise and customer management, production cycle management, technology based management systems, security applications and services, embedded automotive systems, product design & development tools, development services, consulting and implementation, maintenance and support.[4]

Even though other offshoring markets such as India, Russia or China have the advantage of size, Romania has a particularly well qualified management and technical workforce to keep up with and even outshine the competition in niche areas. The continuous shift in outsourcing toward Eastern European countries has allowed Romanian IT service providers to establish themselves on a respectively high position among the European competition.[5]

Romania is the 6th country in the world regarding the number of certified IT specialists per capita, ahead of UK, Germany and Canada, thanks to its educational system that favors multilingual and technical skills. Higher education in the IT area is provided by 5 top polytechnic universities, 59 domain specific universities, and 174 private colleges, which together produce over 5.000 computer science and engineering graduates per year.[6] The main academic centers beside the capital Bucharest, are Cluj, Iasi, Timisoara, Brasov, Craiova and Sibiu.

The constantly increasing level of professional training offered by the technical universities has also brought Romania more Informatics and Math Olympiad medals than any other European nation, for example the first place at the International Olympiad of Informatics in 2003 in the US, and third in the world at the International Mathematical Olympiad in Mexico in 2005.[7] The latest achievement was winning first place at the Central European Olympiad in Informatics (CEOI[8]) and the Junior Balkan Olympiad in Informatics in 2010, where Romanian students have dominated the competition through a high level of training, and have also brought home several silver and bronze medals.[9]

When it comes to a smooth collaboration with foreign companies, Romania tops the conventional outsourcing destinations as it is the 2nd most multilingual country in Europe, with an English fluency rate greater than 80% in the IT sector alongside with many other great circulation languages. Important multinational companies have made Romania their primary partner in specialized customer care services, such as Siemens, with over 2.000 in the local workforce, and Oracle, who maintains its European development and call centers in Romania, the main one in Bucharest providing support in 13 European languages.[10]

Other multinational companies have spread out over Romania, especially since the demand for qualified resources continues to grow. Examples are: HP software development center, Accenture and Genpact in Cluj; IBM in Brasov; Microsoft and Wipro in Timisoara; Ubisoft in Craiova or Continental Automotive in Iasi and Sibiu; Capgemini and Amazon in Iasi, and many more.[11]

Romania has always been known for its hospitality and open-mindedness, and increasingly for its flexibility and diversity. The Romanian professional youth is very similar in mentality to that of the US and Central European countries, adding to it the typical enthusiasm and strong competitive drive that define them. Building on a balanced blend of high-level technical proficiency in leading-edge technologies, with great communication skills, the Romanian IT specialists excel in fulfilling even the most sophisticated demands of their customers.

According to Brainbench, Romania is situated in the top 5 worldwide regarding skills in computer technical support, technical help desk, network technical support, computer electronics, telecommunications, LAN/WLAN communications, network design, ASP.NET, HTML, PHP, web development concepts and many other.[12] To name some of the Romanian software products that have gained international recognition by winning awards on the global market, one could look at BitDefender IT security and antivirus protection, SIVECO’s AeL eLearning platform, the Intuitext e-learning suite from Softwin, and Transart’s ERP and sales force automation solutions.

Offering expertise in a broad range of technical areas, the large pool of IT companies eager to build long-term relationships with foreign investors is constantly thriving to improve its competence and competitiveness. The creative approach of Romanian companies in adapting to the customer’s needs and demands of specialized skills, is one of the key strengths that set them apart from other potential partners worldwide, coupled with the ability to offer very attractive prices without cumbersome cultural or language barriers that could hamper the development of fruitful business relationships.

Romanian companies will impress by their take on new technologies, and offer unexpected skills in software development methodologies, a quick understanding of technical and business requirements, a high level of individual customization of software products, accompanied by diligent software quality assurance and adaptive management of projects. According to a survey conducted by IDC with companies from all over the world who have cooperated with various Romanian IT specialists, their experience can be safely regarded as encouraging:

“The capacity to overcome unforeseen obstacles was truly one of their strong points, as well as the ability to fit an existing general solution to very particular project requirements.”

“We truly appreciated the great collaboration and synergy between [the service provider’s’] staff and our key people, end to end.”[13]

The IDC conducted research also showed that customers value the ability of Romanian IT services companies to “deliver business-critical, technically complex projects”, and state that “delivery versus cost is excellent”.

Resilient and vivacious, the Romanian IT landscape is rapidly recovering from the setbacks of the economic crisis and will continue to thrive and increase over the following years, earning a noteworthy presence as an excellent and dependable outsourcing partner.


Source: RomaniaIT Industry Report 2011, http://www.romaniait.com/wp-content/uploads/industryReport.pdf

Vasile Baltac, president ATIC — IT&C Associations of Romania, president CEPIS — Council of the European Informatics Societies, http://ematch.eu/files/RomanianICTDirectory.pdf

Gabriel Sandu, Minister of Communications and Information Society, http://ematch.eu/files/RomanianICTDirectory.pdf

ITSix Industry Report 2011, http://project104.itsix.com/wp-content/uploads/romaniaIT_2011.swf

A.T. Kearney: Global Services Location Index, The Shifting Geography of Offshoring, http://www.atkearney.com/images/global/pdf/Global_Services_Location_Index_2009.pdf and

ITSix and RomaniaIT

Brainbench Global Skills Report 2006, http://www.brainbench.com/static/pdf/globalskills/Brainbench_GlobalSkillsReport2006.pdf

and ITSix http://www.itsix.com/romaniait.php

CEOI is a European Informatics competition initiated by Romania in 1994 and hosted every year by one of the member countries (Croatia, Hungary, Germany, Czech Republic, Slovakia, Poland, Romania) also accepting guest countries each year, such as Bulgaria, Switzerland, USA, Israel, Estonia, Spain, and many others; http://ceoi2010.ics.upjs.sk/Main/HomePage

SIVECO Romania Press Release, http://www.siveco.ro/web/content.jsp?page=2829&language=2

SBP (Software Business Partners) Bucharest, http://www.sbp-romania.com/Articles/Why-Romania.aspx

ITSix, http://project104.itsix.com/wp-content/uploads/romaniaIT_2011.swf

Brainbench Global Skills Report 2006, http://www.brainbench.com/static/pdf/globalskills/Brainbench_GlobalSkillsReport2006.pdf

IDC EMEA UK, Romania as an Offshore/Nearshore Outsourcing Location [White Paper], http://uk.idc.com/downloads/prodserv/whitepaper_romania.pdf