How much does custom software development cost? That’s the first question that interested clients tend to ask when looking for a bespoke software company for business needs. However, it’s often hard for businesses to give such clients a definite answer to that question, since (depending on requirements) the costs may range anywhere between $5,000 and $500,000.

But why is the range so wide? Well, the cost of software development depends on countless different factors affecting software pricing. As such, even companies working in the field for an extensive period may have a hard time providing an instant assessment.

However, it’s not impossible to estimate how much custom software will cost. As such, today, we’ve explained the key factors that determine the cost of custom software development, why they are important, and how the average cost of software development is estimated.

Stats & Facts:

  • The majority of software development projects are building enterprise applications (84.7%).
  • In 2020, the market for software development was estimated to be worth $389.86 billion and is anticipated to expand at a CAGR of 11.3% between 2021 and 2028.
  • Around 24% of executives outsource software development.
Developers worked in the technology industry
56% of software developers in the US worked in the technology industry in 2021. Source: VpnAlert

1. Software Project Functionality

The more features you want to implement in your software product, the more developer time and resources the entire development process will take. That means your project costs will primarily depend on that. However, it may cost even more, depending on the number of screens, business logic, and other features you want to implement.

Project complexity is determined not only by the number of functions that developers need to implement but also by the complexity of the interconnections between various components, plus the necessity of integrating the product with third-party services, and several non-functional requirements like scalability and load resistance.

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2. Target Platform

There are countless different platforms for software these days; for example, you may want to develop your software based on web technologies, apps for mobile (iOS, Android), operating systems, or the web (or a combination of several). Generally, it’s worth making this choice after you have analyzed the product’s target audience and know what platforms are currently in wide use.

Web, mobile, and desktop software development involve different technologies, require different resources, and, consequently, all differ in terms of cost. For instance, the number of device screen sizes necessary to develop software for Android apps is much larger than for iOS apps.

When an application is developed for multiple platforms at the same time, though, it tends to cost much less to build per-platform. This approach is called cross-platform development and involves the use of specialized technologies and frameworks.

Android vs iOS - mobile platforms

3. Developer Rates and Team Size

Hiring a team of highly skilled staff is complex. As such, this factor can have a massive impact on the final cost of custom software development and is a key reason why IT outsourcing as a cooperation model is so popular.

It’s also worth noting that, depending on the country they are located in, development teams of the same skill level may declare extremely different hourly rates.

When hiring developers, you can resort to the following options:

  • Freelance software developers
  • In-house software developers
  • Outsourced software developers.

Each of these options has its own benefits, but we recommend that brands should generally opt for one of the latter two for better reliability in the provided software.

Software development team and engadgement models

4. Technology Stack

Depending on customer needs and project technical requirements, developers utilize different programming languages and technologies for custom software development.

The hourly rate for a software developer also differs depending on how long the programming language and technology have existed, what they are used for, and how difficult they are to learn. Indeed, an app based on Go or Scala will cost significantly more than the one developed using PHP or Xamarin.

Modern software technology stack

5. UI/UX Design

Designers are often engaged in graphic user interface and user experience design development. Humans are visual beings, and the final UI/UX design can both attract and repel users. Consequently, this stage of product development is becoming increasingly important.

App screen design services will vary in cost depending on the number of screens and visual elements and how many unique graphics and animations used in specific software. Design professionals create these elements and perform further work necessary to achieve a good user experience, and this kind of service can become quite expensive.

Nevertheless, it often pays off through a positive customer experience and increased customer loyalty to your app.

6. Infrastructure and Other Resource Costs

Any software product requires certain resources and infrastructure to remain operable. They all depend on specific functional and non-functional requirements and may include:

  • remote servers for mobile app back-end
  • cloud storage for user data
  • server or hosting for website operation

If a large number of users are likely to visit a website or launch an app simultaneously, your product will require closer attention to its infrastructure. Besides this, product integration with third-party services, API, license requirements, and other similar features will also increase resource costs.

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7. Third-Party Integrations

If a product requires integration with external services, the cost of software development can be altered. In some cases, the cost of integration can be clearly calculated, and your developers will provide a ready-made API. However, it’s sometimes not quite that easy and requires significant additional development time. 

Typical integrations, such as payment services like PayPal and Stripe or credit providers like Equifax, are easy to integrate. However, when integration with lesser-known systems and custom platforms is required, it can be difficult, ultimately increasing the cost of the project.

Types of APIs
Types of a Third-Party APIs to Your Mobile App

8. Post-Release Support

Special attention should always be paid to the cost of supporting a finished application. Indeed, even after the release of the product, the expenses for its operation do not stop; the software must be regularly updated, developed, and improved to ensure it continues to meet the core requirements of the brand. 

The cost of maintaining a software product will also depend on the system’s complexity, but, on average, it usually makes up about 10-20% of the development cost.

Average Cost of Software Development Services

As we have already mentioned, no one can tell you the exact cost of development right off the bat. However, taking into account the factors mentioned above, we can estimate software development costs in simple terms if we split projects into three categories, depending on their complexity and the estimated scope of work:

1. Small projects. Software that solves one problem and requires little development time falls into this category. This will usually have between 5 and 15 screens.

Cost: $5,000 – $20,000.

2. Medium projects. These applications complete several important functions, but they usually have no more than 15 screens.

Cost: $20,000 – $50,000.

3. Large projects. These are mainly enterprise-level software and provide multiple features, as well as third-party integrations, data migration capabilities, dozens of screens, etc.

Cost: $50,000 and up.

To make estimating software development costs more accurate, it’s necessary to create a thorough list of technical requirements and document everything as broadly as possible. Based on this data, the development team will then be able to make the necessary calculations for an accurate quote.

Summing Up

As you can see, the cost of custom software development depends on many factors and can require a great deal of time and money. Nonetheless, choosing the right team to carry out the project is an essential condition for customers’ success.

We have extensive experience in successful software development, implementing projects in different niches and of any complexity level. Flexibility, efficiency, and an individual approach to each customer are the basic principles we are guided by in our work, giving you the solution you deserve.

If you’re looking for a reliable technology partner, write to us, and we’ll contact you to discuss the details further!

Yuriy Nayda
Yuriy Nayda CTO, Managing Partner at SmartTek Solutions