The Cost of Custom Software Development: All Price-Changing Aspects in 2024

You’re probably here to learn about custom software development cost. Pricing is a crucial factor for anyone who intends to build something digital. Though, it’s not that easy to estimate its cost. An IT vendor has to know solution type, target platforms, and clearly defined set of features to provide you with a detailed estimate.

We tried to give you comprehensive costs of software development services and to explain the key factors influencing the final price in this article.

In our experience, mobile and web applications are the most demanded kinds of software. Let’s focus on them.

As an example, the cost of software development varies depending on the complexity of the solution as follows:

Of course, the categories above are rather subjective. So we would like to provide you with the approximate cost of custom software development for different kinds of apps so you could see the whole picture. The prices are based on the average rate in our region (Central and Eastern Europe) — $50-$70 per hour.

In order to roughly count the software development price, it’s necessary to provide the company with some basic information about your project. For example, the business domain you'll develop your app in, will also influence the final price.

Below, we've provided rough price examples for some of the leading industries for you to consider.

• Healthcare - from 75,000 to 250,000+,
• Logistics - from 50,000 to 250,000+,
• Fintech - from 90,000 to 300,000+

We generally ask clients for the following:

• Idea. For example, you want to estimate cost to create an app like Tinder. So, you explain your idea to company's technical specialists and they develop a Tinder-like MVP for you.
• Feature list. It’s important to discuss some vital features that have to be implemented. It’s also good to have the description of every feature (e.g. a map with pins, detect user's location etc.)
• Wireframes. The engineers would be grateful for your vision of design.
• Examples of the competitors’ apps or websites. Instances help you show developers what functions you adore and don’t like.
• Design. There can be just the ideas of what you like.
• Specification. (If you have one.)

A lot of vendors help their clients to collect all necessary data as well as our company. So you can just come up with the idea and we’ll do the rest.

Such factors as the number of platforms, complexity of architecture and animations generally forms final software development cost.

Indeed, the cost appears to be an essential aspect of any software development life cycle. To avoid downfalls, all these factors should be considered and double checked beforehand.

The first factor that can change custom software development prices is the platform of choice. Modern IT world provides three popular platforms for software development and, of course, the software development price quote will vary according to the platform. Do you want an Android or iOS app? Or maybe all you need is a web application? There are some points that need to be considered.

For example, if you already have an iOS app, it’s impossible to convert it into Android application and vice versa. It happens because these platforms take over different programming languages, have unlike SDKs and require different development tools. So, if you want your application to work on two or even more platforms, be ready to spend more money and cooperate with different developers.

You can also consider Flutter app development services to build software running on multiple platforms: iOS, macOS, Windows, and Android. This approach allows for cutting development and delivery timelines (by 50%), thus, reducing software development costs.

The next factor that affects the cost of custom software development (as well as the website maintenance costs) is the type of project. There are 4 in total:

• Development of new software - a creation of a custom solution from scratch with an individual approach.
• Modification and improvement of software - here you can include an upgrade of existing solution.
• Integration of software - this operation includes various measures for the implementation of ready-made software into existing business processes.
• Web development - a creation of websites and web applications for business.

Each of these types has a different software development team composition and requires a different amount of effort and development time. Accordingly, the final price will also be different.

Parag Pendharkar and James Rodger studied a correlation between the size and skill set of a development team and the cost of the final project. There is a wide range of influencing aspects, but the answer is basic: as many members you'll hire, and the wider their expertise will be, the more significant the cost for software development would be. Gathering a skilled and reliable development team may assist you in how to reduce software development costs, as you won't need to spend additional time and resources looking for new specialists. The basic development team usually consists of such experts:

• Project Manager (PM). PM basically supervises all development processes. Such experts monitor the workflow task completion according to all set timelines

• Business Analyst (BA). BA’s primary task is to take your product concept, scrutinize it, and transform it into comprehensive tech specifications. These specifications will be further used by the development team to set timelines, and generally get ready for software development.

• Solution Architect (SA). SA takes part in several processes, including tech architecture modification, testing, and designing. Also, these specialists can advise you on what functionality to implement into the solution according to technical and financial capabilities

• UI/UX designers. The design team has to create a comprehensive visual concept for your product. This will help to risen the solution’s recognition among your audience by implementing and determining demanded graphical patterns

• Developers. The developers’ team is responsible for creating a cortex of a project, including coding and designing architecture

• QA team. Such experts help to determine bugs and malfunctions in developed software. If they’ve found anything concerning, the issue is then redirected to developers to be fixed.

• DevOps engineers. DevOps specialists must have a deep understanding of solution infrastructure, to quickly navigate in it. Generally, they help developers to find ways to automate the process of reaching tech goals.

• Team Leads. It’s necessary to have a team lead for each department, like the design team, copywriting team, SEO team, etc. Their main function is to monitor team efficiency, having strong problem-solving and communication skills

Another nuance that affects software development cost is the size of the future project. The larger the project, the more hours will be spent on working with it. In software development, there are usually 4 levels of projects:

• Small. A fairly small project that is limited to only minor changes, be it user interface settings or bug fixes.
• Medium. These projects are a bit more work-intensive, but they still have tangible results and are often stand-alone solutions or integrations. The category of medium-sized projects can be classified as simple mobile applications or web interfaces to existing systems.
• Large. Large and complex projects that may require integration with multiple systems, a database component, and security and logging functionality. Large projects include the development of a multi-platform application, complex business systems, and much more.
• Enterprise. This is the last and largest project level with high safety and reliability requirements. For example, to this level of the project you can include the development of an Uber-like application that works on all platforms, has many third-party integrations and imposes extremely strict requirements on the security of users' personal data.

People are visual creatures, so design becomes a vital part of software development cost breakdown. UI/UX design is able to attract users’ attention and engage them. Developing design can take quite a lot of time depending on a website type and its complexity.

Development, its complexity and time is one of the many price-driving factors for custom software development cost. The first thing for you to know is that there are two web development types: front-end and back-end. Front-end or client-site is everything that users can see and interact with. As for back-end or server-side, it's like an engine for the app. For example, when a user clicks the registration button, the app first connects to the server to check the data and then returns a value to the user (e.g. wrong credentials, a user already exists, registration successful). That’s where back-end starts to work.

It’s necessary to consider that the development of iOS applications typically requires 20% or ever 30% less time compared to Android. It happens because there are much more devices run on the Android platform. So, the software development time estimation will vary depending on the chosen version of OS. (as one of the influencing factor).

Quality assurance services are extremely important for the development process. It’s vital to test every component of the software in order to prevent or solve any possible bugs. The cost of testing in software development always depends on the complexity of your project.

There are some non-technical factors that should be considered because they can also affect the final price. There most important of them are hiring options, staff experience, and region where the developer is from. Let’s find out more about them.

Software engineers are often divided into three categories by their knowledge, skills, and working experience. There can be junior, middle, and senior software engineers.

Junior developers

Usually, these developers have just started their working path and still require support from more experienced colleagues. As a result, they work in a team of more qualified developers and are able to perform only simple tasks. These developers often know only one programming language or framework, as a result, they are unable to work fast enough. So, it’s better to think well before hiring the developer with such a skill set.

Year of experience: 0-1

Middle developers

The more engineers work, the more experience they gain. Middle developers can work on the project independently and deal with complex technical problems.

Year of experience: 1-3+

Senior developers

This category of programmers can provide you with the most effective variants for developing your project (e.g. different programming languages, how the feature should work to cause fewer bugs, etc.). Offering these options, they are able to explain the advantages and disadvantages of choosing each of them. But be advised that these specialists can raise costs of software development significantly.

Year of experience: 5+

As you understand, custom software development rates may differ depending on the engineer’s level. So, think twice about what developer is required for your project. If your product is quite simple (e.g., a landing page or a simple app), the junior software developer is able to conquer this task. However, if you want more complicated features (e.g., payment integration), you have to hire a more qualified developer. The more complex your project becomes, the more skilled engineer you need.

Modern IT market provides quite a lot of opportunities for hiring a good software developer. The most popular of them are freelance developers, in-house teams, and outsourcing development companies.

Each of these options has its benefits and drawback that we will discuss below.

Freelance software developers

There are a lot of reliable platforms where you can hire freelancers. As you understand, this variant is the cheapest but not the most trustworthy. There is almost no opportunity to control the freelancer’s work. Furthermore, nobody can guarantee that your project will be finished and you will be satisfied with its quality. Having no assurance, you may face a lot of bugs in your project and just waste money.

In-house software developers

Engineers create the software in your own office, so you can follow all the development stages. You can contact the employees at any time and, as a result, any possible bugs will be solved faster. However, hiring in-house developers is always time-consuming and requires considerable investments in salaries, taxes, hardware, and software. To find your perfect developers for the in-house team it is always better to search through professional platforms like LinkedIn or Glassdoor. These websites have all the necessary information to fulfill your search.

Outsourced software developers

Hiring outsourcing companies for creating certain software has quite a lot of benefits. For example, there are many offshore companies from all over the world, so you can hire developers from anywhere. As a result, you can choose affordable contract software development hourly rates because they vary depending on the region. The main drawback you may face is a time zone difference. If your development plan consists of hiring outsource developers, you can find them using websites like Clutch and GoodFirms. These platforms collect information about various IT firms from different parts of the world.

Outstaffed software developers

Outstaffing cooperation model helps you ‘rent’ specialists from a chosen company. For example, you may need 1 developer and 1 designer for your current project. Thus, you won’t need to hire and pay for the work of the entire team and hire just two experts. Such specialists work with you during the contract term remotely. This model may seem similar to outsourcing, but the main difference is that outstaffing employees work on your company's behalf.

In our experience, in-house developers or offshore software development companies are the most suitable variants. Choosing one of these options, you are fully protected and can be sure about the quality.

Nowadays there is a tendency to completely different rates on software development depending on a region. For example, the most expensive development services are in the US and Australia. However, such countries as Estonia provide qualified services for less. Let’s look through software development cost per hour from different regions.

After you leave a request on our website, you personal manager (with experience in your business domain) will answer you within 24 hours to schedule a consultation for further project discussion.

While consulting, we’ll ask you a series of questions to clear up your goals, solution requirements, and business needs:

• What is the purpose of your software?
• What problems does your app aim to address?
• What are the specific features expected to be in the software?
• What platform the solution must support?
• Are there any design requests or branding recommendations?
• What is the desired project deadline?
• Are there existing systems or data to be integrated into the solution?
• Are there particular regulations or standards to be compliant with?
• Do you have any budget constraints or financial considerations?
• Will your software need ongoing maintenance and support?

After collecting all initial information, we prepare two types of cost estimation for you: Rough and Detailed.

Rough estimation

A rough (or approximate) estimate is thought to be the most accurate amount. Its precision can range from 75 to 25%. This information should not be considered as a contract with set terms and conditions. It is given to a customer just for informative purposes.

We make two types of rough estimates:

• The first one made after the Solution Design Workshop
• The second one after the Discovery Phase

The first type of estimation is made looking back on our experts’ previous experiences in similar solutions delivery. Our main goal is to determine the work scope, solution concept complexity, and also define possible pitfalls and challenges to start working on strategies to avoid them. Usually, we offer our client to choose three estimate variations: optimistic, realistic, or pessimistic. Depending on your choice we will understand how exactly to make an estimate: including all demanded features or just basic ones, to go in accordance with a budget and quality levels of non-functional requirements.

The second estimation type is happening after the start of the Discovery phase. Here we create a more detailed features list, proceed with the business goals definition, determine possible development issues, and think more precisely of the architectural solution. This helps to correct the previous estimation and concretize the task and challenges for a development team.

When a customer is unsure whether or not they will collaborate with the software development team, this assessment is factored into the initial stage of the cooperation.

Detailed estimation

A detailed cost estimate is the most exact one in project management, with about 100% accuracy. It is carried out with the participation of all developers who will be actively engaged in the product development.

Detailed estimates are based on thorough description of the forthcoming software platform, including wireframes, specs, and other documentation. Our managers will offer a thorough assessment within two business days if a customer approaches us with a ready-made paperwork package.

Now, let us tell you more about our company and what IT services you can benefit from.

Cleveroad is a competent software development organization based in Central Europe. Since 2011, we've been assisting startups and enterprises of all kinds in acquiring a wide variety of IT services and customized software products. They improve workflow efficiency, address business issues, and aid in the acquisition of competitive advantages.

• A rough and detailed project estimates from our Business Development Managers with no hidden costs or charges
• A complimentary consultation with one of our Senior Business Analysts about your project
• Non-disclosure agreements (NDAs) execution per request
• On-demand services (e.g., custom software creation and updates, modernization of legacy systems, IT consulting services, cloud-based development, UI/UX design, etc.)
• An agile team that can easily adapt to new requirements and modifications rapidly
• Assurance and control of product quality at all stages

Drawing the line, it’s important to understand that custom software development cost estimation is much more complicated than it seems from the first point of view. There are a lot of technical and non-tech factors that need to be considered beforehand. But an experienced software development company can help you solve all the arising business issues.