As we get closer to 2026, the Belitsoft application development outsourcing company says that the pace of new ideas in making commercial software is speeding up. TechCrunch reports, for instance, that companies in Europe and Israel that use AI are now receiving a lot more money from investors. In 2025, European and Israeli cloud and AI application startups raised around 66 cents for every dollar that US companies raised. The financing gap is closing, and a strong, global ecosystem for AI-focused software platforms is beginning to take shape.

Developers are Working and Releasing Code Faster Than Ever

GitHub’s Octoverse study shows that the speed at which software is developed has undergone significant changes. A year ago, developers generated more than 230 new code repositories every minute and produced around a billion code commits. To keep up with this amazing speed without sacrificing quality, teams are relying more and more on fully automated processes. When someone adds new code, it is tested, built, and put into use right away. They also employ a lot of technologies, such as “feature flags,” which enable them to safely add unfinished work to the live product.

Specific Trends That Show This Speeding Up

These reports show that a few important patterns are starting to show up:

The Rise of “Vibe Coding” and AI Development Tools: Business Insider talks about how quickly companies that utilize AI to help them write code are booming. The CEO of Replit, an AI coding platform, says that by 2026, his firm will make $1 billion, which is four times what it makes now. He says that their AI coding helper, which helps consumers make apps using simple English instructions (dubbed “vibe coding”), is taking the place of many prior “no-code” and “low-code” products that didn’t always perform properly.

Managing Risks Connected with AI-Generated Code: Professional reviews say that “vibe coding” can significantly speed up the development of the first prototypes. However, it also has drawbacks that are not immediately apparent unless used with caution. Some of these risks include developing insecure code, accidentally sharing sensitive information, and accumulating excessive technical debt. Experts advise exercising caution: you can use AI freely for front-end or user interface work (the “green zone”), but you should be much more careful when it comes to critical business logic (the “red zone”). They suggest that AI assistance should be supplemented by expert tools to keep them safe and under control.

Business Strategy is Shifting from “Digital-First” to “AI-First”: Entrepreneur says that a survey found that 67% of businesses are already investing at least 10% of their digital budget on AI. As corporations switch to “AI-first” initiatives, this spending is expected to climb dramatically in 2025. In fact, 27% of firms already have AI agents (automated programs that perform tasks) in full-scale operation, and another 61% are testing them. Because of this, spending on AI agents is expected to increase by three to four times in 2025, often taking budget away from other projects. For corporate leaders, AI is now mission-critical. Eighty-one percent say they will spend more on digital projects this year than last year, with AI being the most important.

Application Development Outsourcing in 2026

Deloitte’s Global Outsourcing Survey shows that cost-cutting remains a reason to outsource, but so is finding good workers and being flexible. In other words, companies are looking for help from outside sources with skills that are hard to find in-house, including a deep understanding of artificial intelligence (AI) and machine learning (ML) or cloud-native DevOps skills. In fact, 83% of the business leaders who participated in the poll claimed that they already apply AI in the services they outsource. This highlights how companies apply AI tools to improve development, testing, and maintenance.

Outsourcing still has two of its biggest benefits: speed and flexibility. Global talent pools make it easy for companies to adjust the size of their teams quickly. Outsourcing can also help you get your product to market faster because many outside partners work on development almost 24 hours a day, seven days a week, across different time zones. As more work is handed out to other organizations, outcome-based contracts are becoming more popular. Companies now hold suppliers accountable for key performance indicators (KPIs) such as speedier releases, higher uptime, and quality metrics, instead of just paying them by the hour or the number of people. The ISG Provider Lens report shows that U.S. companies are gravitating toward contracts that reward creativity and strength and focus on results. For example, a contract may give bonuses if release cycles are quicker or punish suppliers if serious bugs reach production.

Another trend is co-innovation. People who outsource work are expected to do more than just carry it out; they are also expected to give advice. For example, a bank might work with a systems integrator to not just update old code but also help create a fraud detection solution that works with AI. The ISG report says that providers are using AI-assisted refactoring and GenAI to speed up modernization. For example, they are automatically turning old COBOL logic into cloud microservices. Such AI-driven services generate value faster than traditional hand-coding.

Nearshoring and specialized hubs are still growing. Many enterprises in North America and Western Europe collaborate with development hubs in Eastern Europe, Latin America, or Asia to save money and find a skilled workforce. It’s still a good idea to hire people from Eastern Europe to work in Europe. They know a lot about AI, business software, and keeping computers safe. These nearshore models help make up for the lack of qualified personnel in the area and are good for culture and time zones. People’s decisions can change because of rules. For instance, companies in the health and finance areas sometimes hire other companies in their own area or region to help them meet data rules more easily.

The bottom line for CTOs and business leaders is that outsourcing in the near future is about change, not just getting rid of tasks. Deloitte finds that outsourcing delivery models are maturing toward “value-based relationships“. Vendors are expected to become long-term allies in digital strategy. The top drivers (beyond cost) are agile scale-up/down capability and access to innovation. In fact, many organizations who are focusing on digital transformation (81% plan to spend more on IT) see outsourcing as a means to speed things up.

Of course, outsourcing has its own challenges, such as making managers work harder, worrying about intellectual property, and needing to be explicit when talking to each other. But by 2026, best practices are starting to materialize. For instance, many firms construct extensive Vendor Management Offices (VMOs) and use the same DevOps tools (shared repositories, pipelines) for their own teams and the teams of their vendors. They work together to undertake security evaluations and use collaboration technologies to make sure that outsourced engineers are properly integrated into agile teams. Outsourcing can make the trends above even stronger. For example, organizations can hire AI and cloud professionals from around the world to design cutting-edge features that would be hard to execute in-house.

In summary, outsourcing is no longer just “cheap labor” only. Research shows that it is a way to acquire innovation. Deloitte says that outcome-driven models and AI integration are changing the way companies find new suppliers. The most successful enterprises will use outsourcing as part of a blended strategy – combining internal teams, offshore partners, and even Global In-house Centers (GICs) – to build the next generation of applications at scale.

In 2026, creating corporate applications will be very different from how it is now. AI-powered tools and architectures will be used at every level of the software lifecycle, and innovative ways of delivering software will be the most popular. Companies in the U.S. and Europe are rushing to adopt these trends: agile, cloud-native systems with AI integrated in, made by teams of people from many fields, including citizen developers and foreign partners. The headlines and data show that the benefits – faster innovation, better user experiences, and a competitive edge – are impossible to deny.

The message for tech CEOs and CTOs is clear: use AI, low-code, and cloud-native methods today, but make sure they are well-managed. Invest money in people and partnerships (including outsourcing deals) that can utilize these technologies. Those who do will be in a good position to lead their sectors in 2026 and beyond, as the next phase of the digital transformation era begins.

About the Author:

Dmitry Baraishuk is a partner and Chief Innovation Officer at a software development company Belitsoft (a Noventiq company). He has been leading a department specializing in custom software development for 20 years. The department has hundreds of successful projects in AI software development, healthcare and finance IT consulting, application modernization, cloud migration, data analytics implementation, and more for startups and enterprises in the US, UK, and Canada.