Many large enterprises develop their software nowadays in globally distributed settings. By using the option to outsource, the respective enterprises can realize decisive competitive advantages. In order to remain competitive, small and medium-sized enterprises (SMEs) are also forced to follow this trend and to outsource parts of their software development. However, most of the existing studies analyze the outsourcing situation in large enterprises, whereas the position of SMEs is being neglected and remains unclear. Main drivers for software development outsourcing decisions, suitable vendor locations, and problems occurring while realizing such projects may differ between large enterprises and SMEs. Therefore, in this explorative research paper we examine the outsourcing activities of eight SMEs in the German state of Baden-Württemberg. Besides the question why SMEs are choosing the outsourcing option we seek to find out, which countries are best suited for outsourcing activities of SMEs as well as which obstacles in particular hinder these enterprises in successfully conducting software development outsourcing.