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September 30, 2021

The Cost of Custom Software Development

September 30, 2021
Read 10 min

Every aspect of our modern lives, from doctor visits to grocery deliveries, is closely connected with digital technologies. We rely on our phones and apps to navigate our life, make purchases, look for travel sites, etc. Any app on our phone represents a brand or company looking to gain a competitive edge in its niche.

It’s impossible to imagine reaching business goals and engaging new users and clients without going into digital. Consequently, there is no better way to reach your end-users than to capture the market with robust, user-friendly, and useful software.

Your digital product speaks more to the quality of your service than any ad or salesperson, so let’s get closer to the point of how much you could spend on the digital transformation of your business and what drives up software development pricing.

cost of software development

Factors Impacting Software Development Costs

The best way to talk about software development costs is to discuss the creation of a custom software solution from scratch as it allows highlighting several factors that can affect pricing. These aspects could be divided into two main groups – development and maintenance factors.

Development Factors

Project Size and Complexity

When we talk about the cost of software, it’s important to understand that there are some factors that matter more than others. For example, the type of software you want to create and its scope can account for up to half of the cost. A mobile app solution with a few basic features will cost you much less than insurance software with multiple integrations used by hospitals and banks. At this stage, the more detailed view of your future product you have the clearer the understanding of the development team, which consequently leads to faster software delivery and deployment. A simple app can be developed within a few weeks, but a complex cross-platform solution featuring cutting-edge technologies such as AI, ML, AR, Blockchain, etc. can take months to deliver and will be much more expensive due to the more skilled professionals involved.


In addition to high performance and intuitive functionality, it’s important that your solution is catchy and engaging. Imagine that more than 2 billion apps in the AppStore and on Google Play are competing with each other for the user’s attention and installation. A book is judged by its cover, the same logic applies here: the more appealing the design, the greater the chance that such a product will be picked up by end users. The only fly in the ointment is the price. High-quality creative design costs money. Make sure you do not just skimp on UI/UX design because no matter how catchy your product’s cover is if it’s not functional enough, users are unlikely to stick to it. One more tip: make sure you and your development team create an MVP of your future goldmine product as soon as possible and make sure it is tested by multiple users. This could save you a lot of effort, money, and time afterward when the product is deployed and by some chance, you find out that it does not work properly. A high level of usability in software is one of the most important keys to user and customer loyalty.


To save money and time, it is more convenient to integrate third-party solutions rather than order additional development services. Either way, performance and security issues can prove to be an unseen threat. Therefore, the service of a certified and licensed development team is a must to prevent security breaches and the malfunctioning of the entire product.

Data Migration

This technical requirement, which affects the cost of software development, is applied when you merge the new solution with the existing one or upgrade the one that you have. However, it may also be required if you want to add some data to your new software. This time-consuming process is at the same time very delicate as it requires extra effort and time for the development team to work out the scripts, migration space, data translation rules, etc.

Testing and Platforms

There is a funny saying concerning software development addressing the development of code without bugs. Software developers agree that such code creation is feasible but would take years to deliver, that’s why testers exist.

All software needs to be tested, whether it’s a single-function calculator added to your desktop software or a large CRM solution. The testing phase cannot be bypassed and requires an additional budget because depending on what you have chosen before and how you interacted with the development team or teams if you have taken multiple options to finalize your product, the software project estimation will differ.

In addition, the choice of platforms on which you want your software to work will also affect the cost of testing services. For example, an app for iOS will only work with Apple products and will mean less testing, as opposed to an Android app that will need to be tested on different brands of smartphones and tablets. The wider the range of platforms, the more expensive development becomes.

Any questions? Drop us a line.


Maintenance Factors

Upon the completion of your solution development, no matter how professionally it was created, the software will need support and maintenance. This needs to be taken into consideration as it involves additional investment. Let’s briefly discuss the factors that affect maintenance costs.


In the case of quality service, you will get the system with interchangeable modules without affecting the entire infrastructure, otherwise, maintenance costs will increase. The programming style should be understandable and easily modifiable, the programming language used should be of high level. If testing has been done at every stage of development and the design has been validated with an MVP, this will lead to fewer bugs in the system, which in turn will lead to lower maintenance costs. Last but not least, the amount of documentation provided is important. Adequate, clear, and complete documentation that helps to understand the logic of the created solution saves a lot of time, effort, and money to maintain the system.


One of the ways to save money is to make sure that the team that developed your product will be the one to maintain it. Moreover, in many companies, maintenance costs are included in the development package. Some applications require ongoing input of new changes and information about the domain they represent. For example, applications for inventory management, accounting, etc. If you want to order the creation of such software, make sure that the maintenance service is discussed in the contract and included in the software development price.

Team Hired and Hourly Rates

Budget VS Deadline Dilemma

Based on your idea and money, it’s the development team that breathes life into your project. Depending on what your priority is: 1) deadlines, if you want to get your solution to market as soon as possible, or 2) budget, if you have room to negotiate and cut some features or contract out some of the work to freelancers just to squeeze project completion into the set budget, the cost of software development will vary.

Let us preface this by saying that if you want to meet the deadline, it’s best to hire an in-house team or outsource the work under T&M (time and materials), which can be quite expensive. If the budget is tight, you will need to work with freelancers, but in this case, the quality of the final product could be low and there could be a lot of extra costs to get it running.

Ideally, you should find a middle ground between these two attitudes and hire a team of professionals or a dedicated team to work on your project at a reasonable price.

Hourly Rates

What also matters is the experience of the developers. There are three main categories of IT guys: junior (0-1 years), middle (2-3+ years), and senior (5+ years). The more experienced the developers are, the more money they take for their skills. At the same time, senior developers are the ones who can write the same amount of high-quality, clear, and understandable code in less time compared to junior and middle coders.

It’s advisable to assemble a team of developers who have been working together for a long time. For example, the development of a medium-sized solution could be outsourced to a team of five professionals working full-time: a project manager, a designer, front-end and back-end developers, and a QA engineer. If these people work together and have a good track record on similar projects, you could even get by with a half-time project manager and a QA specialist.

Now for the most important part, what is the hourly rate for a programmer? If we do not take into account the hourly rates of Silicon Valley gurus, NYC, or London-based developers on one side and the smallest rates existing in Asia on the other, we come up with an average hourly rate of $50. The weekly cost of development is calculated using the following formula:

Weekly cost = No. of developers X Hours per week X hourly rate

software development costs

The aforementioned table holds an approximate calculation of the number of hours spent developing a digital project of different complexity. To be on the safe side, it’s better to contact the development agency directly and get a detailed and definitive estimation

Software Development Cost Breakdown

It happens that sometimes clients who want to order the creation of an app, for example, are familiar with IT and know exactly what they want and how they want the app to be built. Then there’s a better chance of staying within budget and not overpaying. But in reality, anything can happen, and finding the right development partner is the key to a productive collaboration and marketing success for your product.

Steps to Save Your Budget

First Contact

Try to get in touch with the company you want to partner with at an early stage if you are seeking the service to develop a solution from scratch. Also, there are software development agencies helping startups. Such companies usually provide startups with discounts for development services.

Discovery Phase

Try to build relationships with a trusted IT partner by ordering a discovery phase of your solution. This means that during a short time you will get support from professionals on how to approach your goals and build the system cost-effectively. This may involve meetings with the design team, development team, business analysts, and other professionals who may be important to the project. In the end, you’ll have a software requirements specification document, a software architecture document, an MVP, a moodboard, or a clickable prototype with a clear vision of how to develop your product. With this knowledge in mind, you can either continue your search for other companies to hire for software development, or continue working with the one that completed the discovery phase of your product.

Clear Requirements

It’s no secret that the better you understand how your solution will work and change the lives or even the minds of millions of people, the clearer and more precise your requirements are. To avoid paying too much later for bug fixing or rebuilding the entire app architecture because you forgot to mention some features vital to your business or other mishaps happen, please sit down with stakeholders and create a checklist for the features, platforms, and complexity of your future solution.

The more brainwork you do before showing your ideas to developers the better your communication and understanding will be. Come up with competitors in mind to make it easier to deliver your idea to the software development partner. 


Summing up, it’s important to stress one more time that it’s extremely difficult to give any calculations and costs for your product development without digging into details. Based on the specifications of the project a professional software development company will help with accurate estimates. Based on your location, you can always go with the local companies or outsource the development to save money. In case your development partner provides you with an option for the discovery phase of your project, then you hit the jackpot. This helps you to save money by protecting the project from any unexpected development expenses.

Want to know the cost of software development? Contact us to get an accurate estimate of your project costs.

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