How much does custom software development cost?

You probably already heard that the custom software development could cost in the range from $2,000 to $100,000,000+. Let’s find out why this difference is so huge and tangible and moreover, what are the factors affecting pricing.

Start from the beginning, custom software development or custom software engineering is a development process that includes creating, designing, maintaining software for specific business, organization of the company. Simply put, it’s a process of creating unique solutions for customer’s particular preferences and expectations. Usually, companies use the power of developing custom software for management in the workplace (content management, inventory management, human resource management, customer management, etc.).

Now, come strictly to the main question – pricing. There are 2 types of pricing that is usually provided by custom software development companies:

Fixed price. The best decision for the ones who plan to receive a project in time and with a strict budget. You already know the final price and avoid unpleasant surprises, but you will be limited in change requests. Also, this type of pricing is profitable to implement for long term projects and also in times of financial crisis or inflations.

Time & Material. If you plan to make adjustments during the development process, and don’t have time limitations then this type of pricing suits you the best. The main disadvantage is that it’s harder to control the costs using this pricing method and in the end the price can be a lot different from the cost that you planned to pay.

No matter what pricing plan you choose, usually the cost of development depends on multiple factors: complexity, quality, the benefits of the future software, technologies used, customers’ requests and level of developmental experiences. So, first of all you must decide for yourself what you exactly want and need for your project:

1. Fundamental C development: $75-$150/hour;
2. Front-quit web development: $50-$75/hour;
3. Again-stop web Development: $75-$150/hour;
4. API Development: $75-$150/hour;
5. C++ Development: $100-$150/hour;
6. Desktop development: $30-$100/hour;
7. Cellular development: $30-$150/hour.

The price is varied in order to be project specific. You also need to ask yourself next questions which will help to make the right decision about project needs and also understand the cost of software customization: “What is the main purpose of the products?”, “What category of users will use the products?”, “How the software will be regulated?”, “What technology do you prefer (if you do)?”, etc.

Also the pricing of the projects depends on:

1. Custom software development company size:

“Enterprise” or “premium” custom software development company: usually the largest player on the market with hundreds of certified developers, engineers, worldwide clients and excellent reputation. Obviously the product’s price is high. Projects usually cost from $500,000 - $100,000,000+; and the hourly rates vary from $250 to $850 per hour;

“Big Business” custom software development company: offers custom software solutions for big budget companies that can’t quite afford the costs of the “premium” developers. Differ by the big amount of employees (100 - 1,000 engineers all around the globe), high quality products and projects ranging in size from $125,000 - $5,000,000+ ($200 - $300 per hour);

“Mid-market” custom software development company: usually the team of 10-100 employees that serves not only small and medium size businesses, but also the Fortune 500 companies. The project cost in the range from $50,000 to $5,000,000 or $125 - $175 an hour;

“Small” custom software development company: the price for one project varies between $10,000 - $500,000 ($75 - $175/hour). Generally, it’s a small company or agency that has between 2 - 10 employees that aims to deliver custom software solutions for startups and local businesses. Also the “small” companies usually specialize in one specific area.

Freelance developers: “new babies” – $50 - $75 an hour or $1,000 - $50,000 for the project; “seasoned pros” – $100 - $300 an hour, ($5,000 - $100,000).

1. Size of the future software:

Small-size software range from 10 – 15 screens;

Mediums are in the scope of 25 – 40 screens;

More than 40 screens are considered large-size software.

1. Quality of communication;
2. Code quality;
3. Time zones & schedules.

The pricing also depends on the development region and county, every of which has a specifics that determines the quality level and cost level of the development process. Let’s check out how much it costs to create and launch the custom software project in different regions:

USA. The USA development companies usually differ by high-quality products, respective level of communications and punctuality. Development rates can range from $20 to $250 per hour (the lowest price level of high-end software moves up to $100 per hour);

UK (and Ireland). It is a commonly shared view that UK development, professional and the price level is extremely similar to the USA. For an hour large customers should have been paid $35-$175 per hour; enterprise businesses in a range from $100 to $200;

Scandinavia. There are different types of development companies in the Scandinavian region. 55% of developers earn from $35-$ 55 per hour (freelancers and IT firms); 35% of experts and companies between $51-$100 per hour; 5% more than $100 an hour (enterprises);

Southern Europe. You should pay about from $32-$46 per hour if you would like to hire Italy, Portugal or Spain custom software development company;

Eastern Europe (Ukraine, Belarus, Poland). High competence and strong English skills makes Eastern Europe development companies quite popular. Prices start from $25-$100 but on average rates are $35-$65 per hour. Price for premium bespoke software development services start at $100 per hour;

Asia (India, Nepal, Pakistan). One of the cheapest regions for IT development, but a lot of Asia companies differ by mediocre or even low competence, low communications and language skills. The price per hour starts from $10-$40;

Africa (Egypt, Kenya, Morocco, Nigeria). The price varies between $20 and $50 per hour.

So, as you can see there is no one universal price for custom software development and the pricing depends on location, complexity, time frame, the level of expertise and experience of the developers, your wishes and more and more. The main advice during your choice process is not to save on quality.