Global Technology Company Intetics on the Ins and Outs of Custom Software Development Costs

How much does custom software development cost

Explore key factors that directly impact custom software development pricing and determine how to use these aspects to reduce costs.

NAPLES, FLORIDA, USA, Sept. 16, 2022 / — Addressing custom software development costs requires understanding the major software development cost drivers. In estimating the development cost, one must capture the average cost of software development, the size and complexity of the project, the geographic location, the composition of the team, the platforms used, the hiring models employed and the complexity of UI/UX design. These are the elements that have a direct impact on the cost of software development. The ins and outs of custom software development costs can be found in Intetics’ new article.

Statista reports that the global custom software development market will reach $812 billion by 2027. This is a major growth from the current market value of $593 billion. This means that more and more industries and businesses will use custom software development to keep up with innovation and gain competitive advantage.

Average Custom Software Development Cost

Knowing the cost of software development is essential for accurate budget planning. To get a solid figure estimate, several discussions are often involved. Usually, a development vendor reviews all project requirements and then offers custom software development cost estimates.

In general, the average cost of a simple application with low level user interaction and low backend processing is the cheapest option. Still, depending on the tech stack involved, the cost can range from $20,000 to $500,000. For the app we mentioned earlier, the price will be closer to $20,000 and will take around 600-700 hours to develop. In turn, if one wants a cross-platform app with wide server-side application, be prepared to pay a hefty six-figure price tag. Fortunately, there are exceptions. Companies are offering next-generation mobile solutions at prices below market averages.

Software Development Pricing by Size

The average cost of custom software development varies from company to company. In such a case, there are three categories to explore:

1) Startups. This category of businesses does not have a lot of budget and needs to launch products as soon as possible to seek reputation gains. While it’s extremely important for startups to have a custom-built software solution, these companies usually can’t afford products that are priced above $45,000. This figure is most relevant when issuing a Minimum Viable Product (MVP).

2) Small and medium-sized enterprises (SMEs). For this category of companies, rationalization is the key. SMEs can afford more expensive software products and can wait longer to develop them. An average SMB custom software development cost can reach $100,000 and take up to 2,000 hours to deliver.

3) Businesses. This category of business has an established reputation and often employs thousands of employees. Respectively, the cost of custom enterprise software development can be much higher than for startups and SMBs. Additionally, these companies should pay close attention to compliance, as non-compliance can result in hefty fines. Usually, with companies, the custom software development contract costs an average of $50 per hour, and the total project cost can reach $500,000 with an average of six months needed to deliver the product.

The price of average custom software development costs changes accordingly depending on the size of the business.

Software Development Cost by Product Type

Another essential aspect to understand the average price of custom software development is the type of project delivered. For example, customers may need a new customer management system (CMS), an enterprise resource planning (ERP) platform, a healthcare application, a SaaS product or an AI-based voice agent. Respectively, for each type of product, there will be a different average custom software development cost. To illustrate, several examples:

1) A CMS product costs between $10,000 and $50,000.
2) An ERP platform costs between $150,000 and $750,000.
3) A healthcare app costs between $10,000 and $500,000.
4) A SaaS product costs between $50,000 and $200,000.
5) A mobile application costs between $10,000 and $200,000.

At this stage, the average cost of developing custom software fluctuates depending on the size of the company and the essence of the project delivered. While these two key aspects help to understand average budget estimates for different companies, you need to explore specific software development cost drivers to get more accurate estimates.

Nine Key Drivers of Custom Software Development Cost

The budget estimates that a company directly pursues correlate with all direct and indirect costs associated with product development. There are both internal and external aspects at play. Understanding these factors allows for a more accurate estimation of what a custom software development price will be. So, without further ado, here are nine key custom software development cost drivers:

1) Product complexity
2) Product size
3) Target platforms
4) Complexity of UI/UX design
5) Internal infrastructure and connected APIs
6) Integrations
7) Geographical location
8) Composition of the development team
9) Hiring model

The cost of developing custom software depends on several factors. Typically, this is the size of the company developing the product and the type of product itself. Specifically, cost depends on complexity, size, target platforms, UI/UX design, integrations, backend infrastructure, geographic location, team composition, and the hiring model you choose. Considering all these factors, grant the most accurate budget estimates.

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Irina Dubovik
Intetics Inc.
+1 (239) 217-4907
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