Cost of Custom Software Development

One of the major questions, related to custom software development is how much does custom software development cost?

Frankly, custom software development pricing is as flexible as the development itself. One of the major advantages of this type of development is that it is adjusted to the needs and demands of the client. In other words, all aspects of custom software development are discussed at the discovery phase, and each element can be changed to meet the expectations. The same is true for custom software development cost.

However, the flexibility of custom software development is not the only aspect, that defines the cost of custom software development. To simplify it, bespoke software development cost depends on numerous factors like the project scope and complexity, hour rates of hired dedicated software development team, time and materials, required for the project, and many more.

Therefore, to answer how much custom software development costs, we must first define what affects the prices.

Factors Influencing the Cost of Custom Software Development

Every factor is crucial for the final product price. Even the smallest detail will affect the custom software development pricing.

Yet, thanks to the main custom software development benefits, especially - its flexibility, it is possible to adjust or reshape the software project to either decrease the price or increase the functionality, change the tech stack for a cheaper and simpler solution, etc.

Fortunately, the variety of customization options is enormous. So, with precise estimation and project planning, you can achieve all your business goals, finding cheap and efficient technological solutions for software development, or other ways to embody an idea with a cheaper cost of custom software development.

To do so, you will have to be patient and spend as much time and effort to analyze and choose the best solutions for the main factors, that impact the custom software development prices.

Project Scope & Complexity

First of all, you have to define a clear understanding of your project.

The most basic and important aspect is the project scope and the complexity of software development. Estimating how project scope and complexity affect custom software development price is easy:

• The bigger the project scope is - the more time you will need for development. So, the more time you spend, developing it - the more money you spend, depending on the custom software development hourly rate.
• The same is true for the project complexity. However, apart from the additional time, required for the development, you will also have to include the difference in developers’ hourly rates: complex technologies and development demand experienced developers on board, who have higher rates.

Therefore, to cut the expenses on software development, you can consider simplifying your future software. For instance, instead of developing a full-fledged application, you can create an MVP, which will be faster, cheaper, and still efficient.

To cut a long story short, Minimum Viable Product development is a common approach among startups, which allows the creation of a basic app version, with the capabilities to scale and improve in the future. The benefits of MVP for the cost of custom software development are:

• It is much simpler, compared to full-scale development, allowing hiring less experienced developers (a team of junior devs with a few experienced colleagues, instead of a middle/senior development team).
• It is much faster, allowing to cut the development time and start using software for business processes faster.
• It helps to avoid risks. Custom MVP software development is used to embody a basic version of the software, which includes only essential features. So, after going live and analyzing the demands and preferences of users, you can scale, adding only needed features, making the development efficient, and cutting expenses on unneeded or unused functionality.
• It is designed for further scaling. Traditional software development aims at offering a working concept, so the IT infrastructure and processes are designed to serve particular goals. However, when you face the need to scale, it can be challenging, requiring recoding and reshaping the existing IT architecture. Alternatively, MVP is already a basic software version, which must be scaled in the future. So, you won’t need to reshape IT architecture and infrastructure: they are already designed for further scaling and improvement.

For instance, a small MVP app development can fit in the range between 20,000$ and 50,000$, while a basic full-fledged app will cost you 50,000$ - 200,000$, depending on the final software requirements specification, scale, and used technologies. Complex enterprise-level applications will go over 200,000$, due to countless specifics, scale and overall complexity of the project.

Size and Location of the Development Team

One of the most crucial factors, that impact the cost of development is the custom software development hourly rate.

To make it simple, when you hire dedicated software development team, you must understand, that developers’ hourly rates are significantly impacting the final cost of development.

To simplify it, the number of developers on board, their location, their expertise level, and some other aspects can increase or decrease the custom software development pricing.

For instance, software development in Eastern Europe is much cheaper, than the same project in the US, but slightly more expensive, that in Asia or India. As a result, you might consider hiring a dedicated team of middle and senior software developers from Ukraine, which will cost approximately the same, as a team of junior/middle software engineers from the United States.

Frankly, the team location is one of the most important factors to take into account: there are reasons, why many businesses are hesitating to choose an in-house vs outsource software development approach.

On the one hand, in-house software development is better for managing and monitoring. Business owners can simply track the progress of development. However, the average cost of custom software development in such a case can double the rate. Also, don’t forget about extra expenses like office maintenance, bonuses, salary reviews, insurance, etc.

Alternatively, choosing IT outsourcing can bring some challenges, if you don’t find a trustworthy partner. Progress management and tracking will be more limited and scheduled, it might be difficult to face a language barrier or cultural distinctions, time zone differences, etc. However, most of these drawbacks can be easily avoided by finding reliable IT outsourcing companies like Incora.

As a result, you will get a team of experienced developers for more affordable prices, still having an opportunity to fulfill and embody your ideas.

Technology Stack

Tech stack can affect the custom software development cost in various ways.

First of all, some technologies can be paid for use. Most programming languages, libraries, and frameworks are open-source. However, numerous efficient and useful custom development tools like APIs are paid for. Thus, it is important to choose the most suited tech stack, that corresponds with your budget.

For example, API integrations simplify and speed up the development pace, by allowing implementing functionality in a few steps, instead of developing it from scratch. So, by integrating ready-made SaaS solutions or various APIs, you can noticeably cut the expenses on the development by decreasing the time and resources, required for custom software development.

However, you will have to calculate the difference between the custom software development cost and the price of API integration: sometimes, it might be more expensive, than developing the same functionality from scratch.

Additionally, the tech stack directly impacts the average cost of custom software development: some technologies are more popular and common, the services market is highly competitive and it is easier to find developers, experienced in such techs.

Yet, some software solutions and technologies are rare or extremely difficult. As a result, it is harder to find software engineers, familiar with them, and capable of delivering the demanded result. Hour rates of experts in narrow niches are also higher due to the fact, that there is almost no competition or alternative.

So, even if you will find an ideal open-source software solution for your project, you might have to pay extra, if it is too complex or rare.

Type of Software

Custom software development rates also depend on the type of software project, you are planning to embody.

To make it simple, different industries and niches, along with the related minor factors, vary in scale and complexity. So, the type of software you want to create is another factor to include.

For illustration, the price of a mobile application differs from the web platform. Moreover, prices for various mobile platforms are also different: the average native mobile application for iOS ranges from 55,000$, while the same app for Android costs 50,000$ and higher. At the same time, web applications are commonly 60,000$+.

Each offers its pros and cons. For instance, a native iOS application shows better performance and more functionality than a hybrid mobile app (40,000$+), while a web application is accessible from all types of devices, allowing engaging a bigger target audience.

Therefore, even if some custom software development prices might be higher than the rest, they might be a preferable choice for certain tasks and can help cut development expenses as a result.

The best way to make an informed and balanced choice - is to discuss your ideas with IT vendors, who can offer you potential solutions, according to your budget and needs.

Development Timeframes

Everything is simple: the more time it takes to deliver the app - the more expensive it will be.

Most custom software development pricing is based on time and materials agreements, i.e. client pays the developers for the time, they spend on the project, and covers the expenses on third-party technologies, if needed. In such cases, you must include a custom software development hourly rate, to know an approximate development cost.

Alternatively, it is also possible to agree on a fixed price. Therefore, you will establish all the software requirements at the very beginning, the outsourcing team will name the cost of custom software development, and if satisfied, the development will start. Despite it being a more predictable approach, it is not as flexible.

To cut a long story short, the first custom software development agreements allow the implementation of changes and improvements on the go, increasing the quality of the project, and resulting in unplanned expenses.

Still, the fixed price also faces the need for extra expenses. The only difference is that before integrating the changes and rescheduling the development, both parties should consider new agreements and estimations for these changes: no extra work is done until a new contract is signed.

Additional Cost Considerations

Eventually, custom software development rates depend on multiple factors, and even some small details might significantly impact the final cost.

Integration With Other Systems

Platforms and systems, as well as integration and cooperation between them, are some of the most unpredictable factors, affecting custom software development costs.

In a nutshell, distant platforms and systems are based on various IT infrastructures, operate different technologies, and require certain practices and experience in creating “bridges” between them. The bigger the contrast between the demanded systems - the harder it will be to create such integration. Respectively, the bespoke software development cost will vary as well.

Database Migration

Data migration and database connectivity are also important aspects, that define custom software development prices. Each modern software solution highly depends on the data, it has access to.

There are countless ways to store, mine, and manage different data types. Each approach has its specifics and requirements. Our case studies show, that many modern software products demand various databases and data migration processes.

Working with such technologies and processes is a challenge, which requires a high level of experience and a certain set of skills. Respectfully, impacting the average cost of custom software development.

Security Measures

OWASP list is just the tip of the iceberg. Most modern security measures and policies are outdating fast. So, it is important to have a security specialist, capable of thinking out of the box.

On the one hand, such professionals will create highly secure software, saving many nerves, time, and effort. However, it is a very demanding and complex task, which also has its price.

Ongoing Maintenance and Support

Finally, don’t forget, that developing software products is just one of the steps. Apart from that, you must keep supporting and maintaining it, finding bugs and issues, ways to improve software, etc.

Fortunately, many dedicated software development teams and companies like Incora offer such services in addition to the development. For instance, apart from QA and testing, our clients are accompanied by our team for some time after going live, just to ensure that everything is working as was supposed to.