The cost for Custom Software Development is something that every organization wants to know about for developing the applications and whoever is looking for it is curious to know about how much custom software costs and how long it takes to build it. However, it is hard to tell the exact cost of building software as it depends on factors like complexities, technologies and more.
As reported by Statista, the revenue projected for software application development will be around 195.77 billion dollars in 2025. As a result, the market value is estimated to reach an impressive US$249.98bn by 2029. So, it is important to understand the project and it’s needed to plan cost estimation for the development process.
There are distinct project needs as they are from different domains and sectors which have different requirements. Thus, the functionality of the project varies which leads to the difference in cost estimation for different software. For example, the software built for the healthcare sector will have completely different features than an e-commerce platform.
“The hardest single part of building a software system is choosing what to build.” – Fred Brooks, The Mythical Man-Month.
Average Cost of Custom Software Solution
Understanding the kind of software company needs to create is the easiest way of identifying the range how much will the development cost. The required features for both the frontend and backend will be responsible for the expenses.
Let’s break down the average costs time to build a solution for different software products for different industries and sectors:
| Industries | Average Cost (in USD) |
|---|---|
| Healthcare and Medical Care Industry | Range around 300-400k $ |
| Retail and Logistics Industry | Range around 30-50k $ |
| Marketplace App | Approx Cost 50-60k $ |
| Customer relationship management system (CRM) | Approx Cost 125k-200k $ |
| Software as a Service (SaaS) | Approx Cost 125k-250k $ |
With our experience, website and mobile application development are the highest demanding software nowadays. These applications are mainly categorized by their complexity levels. So, let’s see how much approximate time and expense these software application takes to build:
Basic Application: It takes between 500 and 700 hours to build an application. We can create this app very quickly. However, keeping in mind that the app’s functionality is fairly straightforward.
Medium Complexity Application: Applications with a medium level of complexity require 700–1200 hours to develop. There are more detailed functions in the software.
Complex applications for large enterprises: This software may require more than 1200 hours. Because of its multiple security-level integrations, complex architecture, clean code, many modules, and other features, developing an application takes a significant amount of time, industry knowledge, and research.
Also Read: Top Benefits of Custom Software Development
Cost of Development Depending On Team Type
The software development cost also depends on the development team and size. To give you an idea, we are comparing four distinct team types.
Note: Depending on the requirements, the development cost listed below may vary over time.
| Team Type | Development Cost (USD) |
| Local development company, US | $200,000 |
| In-house developers, US | $220,000 |
| Freelance developers | $150,000 |
| Offshore software development agency | $100,000 |
1. Local Development Company, US
A local development company means having a team or a company located in the same country or region.
This option is the first option for most of the startups due to being in the same nation. For Example, as a startup, outsourcing to a vendor in the same location.
Let’s see some pros and cons of hiring a local development company:
Pros:
- The developer’s team will have similarities such as cultural and linguistic within the startup workforce.
- The same legal jurisdiction makes it easy to pursue contract violations.
Cons:
- Costly for startups in the US, UK, Canada, and Australia
2. In-House Development Team
The in-house team works directly from your exact premises. The company hires them and trains them as full-time employees.
The pros and cons of hiring this development team are:
Pros:
- You can communicate with your team for upgrades, modifications, and other development processes.
- The team has expertise with the required industry experience.
Cons:
- Hidden costs, including employee benefits, bonuses, and taxes also come when hiring in-house teams for software application development.
The average recruitment cost is somewhere around 20-25% of the first-year salary.
3. Freelance Software Developers
They work independently depending on their contracts for apps. They are not part of the organization. Hence, there are higher chances of leaving the project development midway.
Let’s understand the pros and cons of hiring freelancers.
Pros:
- They are cheaper.
- Easy access to talented developers around the globe.
- Offering amazing flexibility.
Cons:
- They might be unprofessional with their approach, work ethics, and process.
- They can leave your project without informing you.
4. Offshore Software Development Company
An offshore company which is located in some other country with the best infrastructure and expertise will help in the development of web and mobile applications as per the requirements.
This type of company has a good network of employees which are project managers, designers, and software engineers. Hence, the project cost of outsourcing development to a third-party vendor like an offshore software development company is less expensive than others.
Let’s see an offshore company’s pros and cons.
Pros:
- It’s the most affordable and cost-efficient.
- They deliver affordable solutions on time.
- It reduces recruitment costs.
- They offer flexible development models.
Cons:
- Different cultures and time zones.
- It may be difficult to communicate due to different languages.
Key Factors that Affect Software Development Cost
1. Product Complexity
It is one of the most crucial factors that can impact the custom software development cost. The complexity of the software tells us how much effort developers and programmers need to put into building software as per the demand. The more features it has the more complex the project becomes.
Complexity can affect the quality of code which will increase the timeline and there can be many technology concerns and database integration concerns which will result in higher expenses.
2. Software Size
The amount of work needed for the development process grows as the number of screens or pages increases. The more complicated your project is, the more custom software engineering services you will need to build it.
Small applications simply consist of 10-25 pages. The length of a mid-sized application is 25-40 pages. There will be more than 40 large applications.
3. UI/UX Design
Another factor affecting the cost can be UI/UX designing and architectural prototyping. The design of the product must be user-friendly, engaging, and interactive which delivers a better user experience. The more difficult the interface will result in higher prices.
4. Development Team Size
The type and size of the team also affects the cost. The more people you want to work on the project the more it will charge. Below are the costs for hiring a software developer across countries:
- Senior Developer – $120/hr
- Mid-level Developer – $80/hr
- Junior Developer – $40/hr
The roles and developers may be different depending on the project scope and requirements.
5. Reliability
This is the process of validating the code, and checking the robustness and consistency of the project and design.
A highly dependable software requires more price and effort. Developing companies that charge cheaply may be producing inconsistent work.
In case you are looking to hire the best custom software development company, contact us to get full support for innovation and creativity. We will help you in developing solutions that customers will love.
Frequently Asked Questions
Custom Software development costs can depend on different factors like project scope, complexity and functions. Get in touch with us to get clear cost estimations.
Depending on the outsourcing model you select, the development will cost you between $30 and $55 per hour. Also, depending on the experience of a particular developer, hiring a mid-level software developer can cost around $35 to $60 per hour.
The development time varies depending on features, and integrations. Custom software development may take 4-18 months or more, depending on the complexity and the structure of the software.
