Software Development Partnership: How To Make It Work?

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Developing a software product from scratch is a long process riddled with potential risks and challenges. Considering this, it is even more important to find the right company to partner up with. A good match can result in a fruitful partnership full of trust, the mutually beneficial exchange of expertise and a relationship that will last for years.

Software development partnership can take on many forms, depending on the needs, goals, liabilities, or even taxation preferences of a particular venture. As a working relationship between two legal entities, it must be always mutually beneficial, and to accommodate these criteria, there are several types of partnerships to look into.

Infographic displaying different software development partnership models including Shareholding, Joint Company, Dedicated Development Center (DDC), and Sales Partnership, each offering unique benefits and collaboration opportunities for business growth and software innovation.

What are the most common types of software development partnership?

As a custom software development company that’s been on the market since 2007, we have been operating within several different models that benefited our clients in some way or another. Ultimately, the correct approach lies within the objectives for the projects, the longevity of the cooperation, and more. However, based on our experience, we can highlight several most used types:


The classic approach, and by far the most popular one, when trusting a software development company to take over the technical side of the project.

It can be beneficial for businesses of any size, from small startups to large transnational enterprises that are looking for quality software development services without having to invest in their own IT office.

This approach ensures that the client can use the expertise of accomplished companies with their staff, infrastructure, internal production processes, and more, focusing only on overarching aspects like marketing, etc.

The prices for the software development services with the outsourcing models can vary, depending on the project size, required technological innovation, and many other aspects. The flexibility of this approach allows to involve only the required professionals for the particular project, without the need to splash the cash on an entire IT department expansion. Even if it’s just for an hour or a week, an outsourcing partner with work within the agreed budget to attract the necessary talent to complete the set objectives and requirements.


With this model, technological partners, like SEVEN, can cover the entire development process on their side, just as you would see it with classic outsourcing.

The main difference, however, is the reduced cost of software development in exchange for company shares. In our years of practice, we’ve discovered that startups are the primary benefactors of this approach.

During the investment stage, whether it be the Seed Stage, Series A, or Series B, both parties can extract valuable benefits. Startups can save money on software development, get the required technological expertise and move on to attracting investment and promoting the product.

Joint Company

When a company requires a long-term software development partner, it can look into the Joint Company model to leverage the expertise of both worlds. The startup or business owners can utilize their connections for marketing, visibility, attracting investments, etc. While the owner of a software development company can use the resources and infrastructure of an established IT business, creating a powerful combination in the form of a joint company.

By pooling the resources from two entities, it is possible to:

  • increase market access
  • gain competitive advantage
  • increase the speed of time-to-market
  • ensure better scalability in the future
  • and much more

The forms of this partnership can also vary, including the setting up of a joint venture from scratch, a limited liability company (LLC), a subsidiary, etc. A decision to establish a joint company can also be influenced by the target location, which can offer a more lenient taxation policy, better talent pool, optimal labor costs, and more.

Dedicated Development Center (DDC)

Dedicated Development Center (DDC) model offers unprecedented exclusiveness to software development services. While in a classic outsourcing model, the service provider must manage and maintain a team capable of tackling multiple projects at once, DDC is all about working on them for one client.

DDC is an extension to the client’s in-house team, which directly increases the control that the client has over the development process and can ensure the highest level of confidentiality. A DDC can also offer other benefits described before, like optimal taxation, talent pool, among others.

Partnering with an existing software development company to set up a Dedicated Development Center also allows to utilize the knowledge of the ways local businesses are handled, navigate potential legal nuances, and more.

Diagram showing the team composition within a Dedicated Development Center (DDC), including roles like AI Engineers, Backend Developers, Mobile Engineers, Frontend Developers, QA Engineers, DevOps Engineers, Project Managers, Business Analysts, Software Architects, and UI/UX Designers, all coordinated for comprehensive software development.

Sales Partnership

Sales Partnership is an arrangement between the software development service provider and independent sellers or intermediaries with their own clients. This way, both parties contribute to the common cause with their strengths. Service provider ensures the quality of the solution and timely delivery, and the seller makes sure there’s always someone willing to purchase these services and solutions.

A mutually beneficial model, it allows a software development company to expand its market reach further without investing in a dedicated marketing & sales department while the seller can enter the ever-evolving IT niche without having to master technological expertise.

How to find the right software development partner?

The right partnerships and connections can set your project up for success early on. Scouting for software development service providers can be a tedious job, but it will save time and money on development and collaboration in general.

The ideal set of parameters is always unique because each project has something specific about it and it influences the correct choice vastly. Let’s look at the crucial general steps to take to narrow down the field and get closer to the right software development partner.

Consider the project specifics and set the goals

This is the crucial step to begin the search since many professional agencies and service providers specialize in narrow fields. While most software development service providers can deliver great projects, their expertise in areas other than coding can make a difference.

For example, healthcare software development requires a unique set of knowledge and skills to get right efficiently, including the high standards of data privacy, and a plethora of other, sometimes region-specific, limitations to ensure compliance with the law.

When planning a project, try to even vaguely decide on the area of expertise required to perform well beyond just writing good code. There are plenty of good questions to answer before searching for a software development partner, like:

  • What niche is my project aimed at?
  • Does my target audience require specific technology usage that requires narrow expertise?
  • Does my future partner need to be able to communicate technical stuff to a non-technical person?
  • Is the financing enough for a full-scale development from scratch, or do we need to focus on software prototyping or a minimum viable product to generate funding?
  • Do I want to collaborate in a classic outsourcing model, or should we explore alternative methods to build relationships and cut costs for immediate development expenses?

These questions and many others that one may have during the consideration step are all valuable and important because they can solidify the inclination toward one or the other software development partner.

Search on the specialized websites

Business-to-Business (B2B) directories and professional networks serve as repositories of companies, where businesses can search for service providers based on specific criteria such as industry focus, company size, and project budget. These platforms often provide a snapshot of each company, including their service offerings, client reviews, and portfolio of work, making them invaluable during the preliminary stages of partner selection.

Platforms like Clutch specialize in gathering and presenting detailed information on IT service providers, including rankings and client feedback. These sites use a combination of client reviews and proprietary algorithms to create lists of top performers in various categories.

While reviews and testimonials are crucial for gauging the reputation of a potential partner, it’s important to approach them with a discerning eye. Look for detailed reviews that speak to the quality of the service, the professionalism of the team, and the outcomes of completed projects. Testimonials that address specific challenges and successes offer more value than generic praise. Additionally, consider the volume and consistency of feedback across multiple platforms to ensure a well-rounded view of the company’s capabilities and reliability.

Screenshot showcasing a variety of service categories listed on a directory platform, including Development, Design & Production, Marketing, Advertising, Business Services, and IT Services, illustrating the extensive options available for finding specialized software development partners.

Screen the Technology Expertise and Service Offerings for Each Candidate

When selecting a software development partner, the technology expertise and service offerings are critical factors that can make or break the success of your project. Begin by examining the prospective partner’s technical skill set to ensure they have the experience with the technologies required for your project, whether it’s a specific programming language, framework, or a suite of development tools.

A deep dive into their portfolio can provide insights into their proficiency and versatility. Look for relevant case studies that showcase their approach to problem-solving and innovation. It’s not just about the projects they’ve completed, but also the value they’ve added to their clients’ ventures.

The range of services offered by a software development company is also telling of their ability to see a project through from conception to completion. Do they offer end-to-end solutions, or do they specialize in particular stages of development? Comprehensive service offerings, including ideation, UX/UI design, development, deployment, and maintenance indicate a partner capable of handling all aspects of software development, providing you with a more integrated and cohesive product.

Ask for Quotes and Pitches

Once you’ve identified potential partners with the requisite technical expertise and service offerings, the next critical step is to solicit quotes and proposals. This not only provides an insight into the cost but also reflects how well the vendor understands your project requirements.

  • Requesting Detailed Proposals: Encourage potential partners to submit comprehensive proposals that outline their approach to your project. These documents should include their understanding of your project goals, a proposed timeline, detailed costing, and the methodologies they plan to employ. A well-structured proposal will speak volumes about the vendor’s professionalism and commitment to your project.
  • Understanding Pricing Models: Software development pricing can range from fixed-price contracts to time-and-materials or value-based pricing. Each has its advantages and disadvantages depending on project scope and predictability. Ensure that the quotes you receive specify the pricing model and what it includes. Be wary of quotes that seem significantly lower than others; this could indicate a misunderstanding of the project scope or a difference in quality.
  • Evaluating Quotes: When evaluating quotes, consider the total value offered rather than just the bottom line. A higher quote might include more thorough testing, better quality assurance, or more post-launch support. Check for hidden costs or assumptions that could affect the project budget down the line.
  • Pitch Presentations: If possible, arrange pitch presentations with your shortlisted candidates. These sessions provide an opportunity to ask questions, gauge the team’s communication skills, and assess their enthusiasm for your project. It also allows the vendor to clarify any points in their proposal and to demonstrate their understanding of your vision.
  • Making the Decision: In choosing your software development partner, the decision should be based not only on the cost but also on the perceived value, the company’s track record, communication, and the potential for a long-term working relationship.

With the quotes and pitches evaluated, you’ll have a clearer picture of which partners are best suited to bring your software project to fruition.

Focus on Gaining More Value Than Just Code

In a software development partnership, the value delivered extends far beyond mere lines of code. It’s crucial to identify partners who bring additional strategic benefits to the table, ensuring your project’s success in a broader business context.

  • Strategic Insights and Market Understanding: Choose a partner who offers more than technical expertise; look for one that can provide strategic insights into your market. A partner with a deep understanding of your industry can offer valuable perspectives on user experience, market trends, and potential challenges. This insight can help shape a product that not only meets technical specifications but also resonates with your target audience and stands out in the market.
  • Scalability and Futureproofing: Software development is not a one-time event; it’s an evolving process. A good partner should be able to design solutions that are scalable and adaptable to future needs. This includes using modern technologies and architectures that can accommodate growth, integrate with emerging tech trends, and evolve as your business does.
  • Contributing to Long-Term Success: The right software development partner will be invested in your long-term success. They should be willing to work closely with you to refine the product over time, based on user feedback and changing market conditions. Their commitment to your project should extend beyond the launch, with a focus on continuous improvement and ongoing support.
  • More Than Just a Vendor: Ideally, your software development partner should act as an extension of your own team. This means having open lines of communication, aligning with your company culture, and having a shared vision for the project’s success. A partnership that is collaborative and symbiotic paves the way for innovation and success that is mutually beneficial.

In summary, when choosing a software development partner, it’s important to look for a company that can contribute not just technically, but also strategically, ensuring your project’s success now and in the future.

An infographic listing key qualities to consider when selecting a software development partner, including Strategic Insight, Effective Communication, Industry Expertise, Problem-Solving Skills, Project Management, Innovative Mindset, User Experience Focus, Quality Assurance, Scalability and Growth Planning, and Post-Launch Support.

What Else to Consider When Choosing a Software Development Partner?

When selecting a software development partner, several other important aspects should be considered to ensure a successful and harmonious collaboration:

Evaluating Cultural Fit:

  • Assessing the alignment of company cultures and values to ensure a smooth partnership.
  • Understanding each other’s communication styles and business practices to enhance collaboration.

Understanding the Legal Framework:

  • Navigating through essential legal agreements and contracts to protect both parties.
  • Ensuring clarity on intellectual property rights and confidentiality.
  • Considering data security and privacy laws, especially in cross-border partnerships.

Planning for Long-Term Engagement:

  • Establishing robust communication channels and routines for regular updates.
  • Looking beyond the initial project to potential long-term collaboration and deeper engagement.

Measuring Success and ROI:

  • Setting clear metrics for success and conducting regular performance reviews.
  • Evaluating the partnership not just in terms of deliverables but also its impact on business growth and market positioning.

Post-Launch Support and Evolution:

These considerations contribute to a holistic approach in selecting the right software development partner. They emphasize the importance of a partnership that goes beyond the technical aspects, encompassing cultural alignment, legal soundness, long-term commitment, and strategic growth.

The Takeaway

Selecting the right software development partner is a decision that transcends mere technical capability. It’s about finding a collaborator who not only understands the technicalities of software development but also aligns with your business’s vision, culture, and long-term objectives. From evaluating specialized websites for potential partners to scrutinizing their technical expertise, service offerings, and pricing models, each step is crucial in paving the way for a successful collaboration.

Moreover, it’s essential to look beyond the code. A true partnership is characterized by strategic alignment, cultural fit, legal coherence, and a commitment to shared success. The focus should always be on building a relationship that fosters mutual growth, innovation, and adaptability to changing market dynamics.

As you embark on this journey, remember that the right partnership is a catalyst for not just completing a project but for transforming your business idea into a sustainable and evolving digital solution. The right software development partner doesn’t just build software; they help build your business.

Contact us to learn more about navigating software development and receive professional guidance backed up by relevant expertise.