Capgemini and Orange’s joint €600M investment in a new European cloud services center, announced this quarter (Capgemini press release, May), is the latest sign that European nearshoring has become a central pillar for enterprise IT strategy. The move, which will create over 2,000 new technology jobs in Central Europe, comes on the heels of McKinsey’s “Nearshoring’s New Frontier” report (April), which found that 68% of surveyed European and US CIOs plan to expand nearshore development within Europe by next year.
Nearshoring Moves Center Stage After a Year of Geopolitical Volatility
The Capgemini-Orange announcement is not an isolated event. As McKinsey highlighted, enterprises are re-evaluating global delivery models in response to rising cybersecurity risks and increasing regulatory complexity. The report notes that “European nearshore providers are outpacing offshore competitors in both delivery speed and regulatory alignment, especially for clients in finance and manufacturing.”
Three main factors are accelerating this shift:
- Regulatory pressure — GDPR and new EU digital sovereignty rules are driving a preference for EU-based tech partners.
- Talent pool stability — Nearshoring in Central and Eastern Europe offers access to highly skilled engineers, with less attrition and fewer disruptions than far-shore destinations.
- Geopolitical risk — US and EU enterprises are seeking partners in politically stable regions, especially given ongoing conflicts and supply chain challenges globally.
For IT procurement leads and technology executives, these trends demand a strategic shift in how partners are selected and projects delivered. The days of single-region offshoring are over; hybrid and nearshore-centric models now lead.
What the Capgemini-Orange Deal Reveals About European Nearshoring’s Evolution
The Capgemini-Orange cloud center will be located in Poland and Romania, markets that have seen double-digit annual growth in B2B IT services since 2023. According to Capgemini’s release, the initiative is designed to “accelerate secure cloud adoption for regulated industries and public sector clients across the EU.”
Key implications for enterprise IT:
- Security and Compliance: By situating cloud and software development centers in the EU, enterprises benefit from native GDPR compliance and reduced data transfer headaches.
- Time zone and cultural proximity: Nearshore teams in Europe enable real-time collaboration, which McKinsey’s report found improves project velocity by 24% over Asia-based teams.
- Cost vs. Value: While rates may be 10-15% higher than the lowest-cost offshore options, McKinsey argues that faster delivery and lower rework rates create a net positive ROI for most mid-market and enterprise clients.
For companies seeking custom software development services or outsourced development centers in Europe, the landscape is more competitive and transparent than ever. But choosing the right partner requires due diligence on regulatory, technical, and cultural fit.
Choosing the Right European Nearshore Partner: Lessons from the Leaders
Drawing on findings from the McKinsey “Nearshoring’s New Frontier” report and lessons from the Capgemini-Orange deal, successful nearshore engagements in 2025 hinge on three principles:
- Regulatory-native delivery: Partners must demonstrate not just GDPR compliance, but deep familiarity with sector-specific rules (e.g., DORA for finance, MDR for health tech).
- Full-stack capability at scale: Enterprises increasingly demand partners who can offer everything from legacy modernization to AI/ML integration under one roof.
- Transparent cross-border governance: The ability to provide clear reporting, local management, and hybrid team structures is now a table stake.
GazitIT’s outsourced software product development approach is built around these needs, with hubs in Central Europe, native-speaking project managers, and a focus on secure, regulated industries. We see a marked uptick in requests from US-based companies seeking EU delivery for both compliance and operational reasons.
How to Maximize Value from European Nearshoring in 2025
1. Integrate Nearshore Teams as Strategic Partners
Gone are the days when nearshore meant “throw it over the wall.” Modern B2B software projects demand tight integration between client and partner teams. Successful CIOs are embedding nearshore leads into their own product squads, maximizing knowledge transfer and development velocity.
2. Focus on Regulated-Industry Expertise
With regulatory complexity rising, prioritize partners with a track record in your sector. GazitIT’s custom solutions for finance, healthcare, and logistics are designed around compliance from day one.
3. Demand Full Transparency and Agile Governance
Request real-time visibility into sprint progress, risk logs, and KPIs. Leading partners are investing in collaborative platforms and local client liaisons to ensure no surprises.
4. Combine Nearshore with In-Sourcing for Core IP
For core intellectual property or high-security modules, consider hybrid models that blend nearshore delivery with in-sourcing. GazitIT’s in-sourcing service enables clients to retain control over critical code while benefiting from nearshore velocity and cost efficiency.
Conclusion: The Nearshore Imperative for US & EU Enterprise IT
The Capgemini-Orange partnership and McKinsey’s latest research make it clear: European nearshoring is now a strategic necessity, not a tactical cost play. CIOs, CTOs, and heads of engineering must adapt their sourcing strategies to capture the speed, compliance, and talent advantages of Europe’s tech hubs in 2025.
Ready to rethink your software delivery model? Contact GazitIT to explore how European nearshoring can accelerate your next IT initiative. Our team is ready to help you navigate the new landscape and deliver results with confidence.
