Outsourcing is often closely related to offshoring in software
development, but you can outsource onshore and you can create
offshore subsidiaries. This seems to be the current trend for large
occidental organisation that want to profit for lower costs in
countries like India, but maintain a high control on the process.
However, developers in Europe or North America feel no differences if
their Asian "competitor" work for a subsidiary or for another
organisation. A recent poll from Methods & Tools wanted to know if
applications are developed exclusively inside organisations or if
outsourcing software development services are used.

The majority of the 346 respondents were equally split between those
that are not using outsourcing and those that use it, partially or
completely. Complete outsourcing is done by only 6% of participants.
There is a need to keep internal expertise when outsourcing is used.
The phenomenon of outsourcing of IT services is well known. An
article of McKinsey Quarterly estimated the global market for IT and
business process outsourcing to $30 billion. The part of software
development in this growing market is less known and discussed. In
another recent survey published by the Software & Information
Industry Association (SIIA), 60% of the participants were offshoring
software development efforts and half of them were doing it with
external providers.

Get the complete results of this survey with references on Methods &
Tools: http://www.methodsandtools.com/dynpoll/oldpoll.php?Outsource