Software Development Cost: Understanding the Major Factors

Alternately, it could take well over 40 hours to get the same amount of work done if we weren’t able to dedicate an engineer to the project full time. Or if we ran into external issues, like a client not granting access to a server and waiting for a week before credentials are approved. In both cases, the effort is the same , but the timelines are different. Web development – a creation of websites and web applications for business. A lot of vendors help their clients to collect all necessary data as well as our company.

cost of software development

Such applications might look small, but they pack much more than meets the eye. FIDO app uses Big Data to collect, parse, and analyze data from hundreds and thousands of clients simultaneously, and it takes time and effort to make sure it functions the way it was intended. The type of software used throughout the development process will influence the price estimation for your project.

Software can be hosted in the cloud or on premises

Software development takes high-level technical acumen and experienced development teams to succeed. Software developers are technical professionals that apply engineering principles and methods in the development of programs and operating data for computers. An accurate software cost estimation is one of the key parameters that paves the way for a successful software development. The techniques listed below will help you understand the complex process of software cost estimation based on the realistic amount of effort, time and money. Not just the cost range, we are sure you certainly have a hundred more questions about custom software development cost estimation.

cost of software development

This information should not be considered as a contract with set terms and conditions. A fairly small project that is limited to only minor changes, be it user interface settings or bug fixes. Modification and improvement of software – here you can include an upgrade of existing solution. Instances help you show developers what functions you adore and don’t like.

How to Estimate Cost of Software Development Based on Types

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. 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. 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.

  • The choice of technology directly influences the software development budget.
  • The more complex the board and peripherals are (such as USBs, graphic cards, or high-speed peripherals), the bigger the costs.
  • Now that you understand the prerequisites required to determine the software development cost, let us move forward and explain various factors that affect the software development cost.
  • The location of software developers you hire also affects the average cost of custom software development.
  • All of these elite players employ one type of business plan or another.

Of course, the team is not the only thing you will need money for as the software development life cycle involves additional expenses along the way. At the very least, though, you know what the recruitment itself would cost you, so that’s something. The platform of your software is a significant factor that affects your custom software development cost. So, here you need to decide whether you want to develop Windows, Linux, macOS, or cross-platform apps.

Hidden Custom Software Development Costs

Back-end developers write server-side code and APIs and conduct unit tests. Front-end developers turn static user interface mockups provided by UI designers into fully functional GUIs. Add up the tasks and calculate the cost of software development. As we have an extensive portfolio of cases, we can apply the same cost projections when we see a similar project. Some changes will have to be made, but if the projects are similar enough, this type of estimation is the most accurate and the quickest one.

For a quick understanding of the content, you should go straight to the bonus infographic, which will give you a visual idea of how much it costs to develop custom software. Intersog is the partner you need to get your project started the right way and make sure it stays on track throughout the software development life cycle. We are here to accompany you throughout your digital transformation journey and help you achieve extraordinary results fast. Use our IT Team Cost Calculator and start your software development project with a reliable partner trusted by hundreds of partners across the world.

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Our projects result in improved business efficiency, increased ROI cost-effectiveness, and risk mitigation. We use a proven collaborative model that is flexible and scalable. This makes our digital solutions effective even on projects with small teams. We rely on multi-disciplinary software developers, time-proven processes, and effective tools and techniques to ensure the highest level of quality. From startups and SMBs to Fortune 500 companies, Konverge has been a proven technology partner for over 26 years.

Custom software development costs: how to estimate your budget in 2022

The final and vital aspect of software development cost estimation refers to HR processes. Firstly, your bill will change depending on the team composition, hiring model, and the location of the development company. In this part of the article, we will explore how and why these aspects influence the software development budget and try to find ways to decrease the costs.

cost of software development

Based on research and client requirements, we create the first version of software costing estimation. In addition, SaaS applications are more secure, user-centric, and provide the best user experience compared to simple software. These eCommerce solutions allow you to create a website to sell and promote your products. But, these platforms offer limited customization to your website.

Target platforms for your software solution

Other types of software, simple app with limited functionality are much cheaper to develop, so you can go for it for just around $20,000. So, if you hire a junior software developer for your project, it will cost you less compared to a senior software developer. Whereas, if you hire a software engineer, the hourly rates will automatically be high as he will be in charge of the project and handle the overall progress of the entire software project.

cost of software development

Cost calculations should also embrace indirect costs like office space, utilities, insurance, etc. Reasonable expenses – Regardless of the available resources, all teams are interested in allocating them reasonably. Software development cost estimation isn’t just a list of expenses; it involves various calculations, assumptions, exclusions, etc. It helps to improve accuracy and make the right investment decisions. Relevant has wide expertise in developing software products from the ground up and scaling the existing ones. So if you have a software product idea but don’t know where to start, contact us.

This model also allowed them to keep in-house employees on the project, outsourcing code development only for parts of their projects. We use a two-step framework that includes rough and detailed estimates. When estimating a project, the development company will guide you on the required technologies and inform you whether they are open-source or come with a certain fee. On the plus side, modern programming languages offer many out-of-the-box tools and frameworks that speed up the process and cut development costs. MVP for a payment application startup or a bank application with a number of geographical branches. Simple landing page or multi-currency marketplace, simple CRM or 360 degrees marketing automation with AI and ML functions.

Factors that Affect Software Development Costs

Besides knowing actual needs, it’s helpful for strategic planning and imposing the right requirements. What’s more, it refers to teams with limited resources and ones that don’t impose limitations on the budget. In terms of business perspectives, the idea of introducing new software to the market is always worth the effort.

We have seen many examples in the market how big freelancers charge for their work. They basically take advantage of their remote locations to specify their development cost. However, the skills and experience of them also matters a lot in this regard. They are not just blindly selected after looking at their country of residence.

Firstly, describe your idea in detail and the problem your app is going to solve. Based on that, prepare a list of essential and non-functional features you would like to implement. Add a few examples of existing solutions and specify your unique value. Finally, provide technical specifications, design ideas, and some wireframes.

The hourly rate of software developers varies depending on the years of experience, location, and technical expertise. However, when your business grows, you need an ERP solution tailored to your business requirements. So, when you create an ERP solution for your business, you are able to save costs, get analytics, manage risk, scale your business, and achieve the flexibility to carry out operations. Remember, create your software following the latest software development trends so it is compatible and scalable to your future requirements.


While at the same time, discussing the end goals can help the development team stay focused and aligned. Thus, the more well-defined the end goal, the less time it takes to develop the software and offer better cost optimization. The third option, dedicated team, is normally preferred by big businesses that are looking to employ a whole team for their projects.

Besides the frontend, which entails UI/UX design, you have to take care of the backend for the application. The bigger the app, the more complex processes will be required to operate the functions. 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. 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.

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