The first question that comes to mind before planning to get a custom software development is, “How much does software development cost?”
The answer is that software development costs you between USD 18,000 and USD 600,000.
However, these cost estimations depend on the project’s complexity, development platform, tech stack, design, and APIs. The development team also plays an important role. Reducing the software cost using a breakdown based on all these factors will help if you are struggling with higher costs and reduced ROI.
In this article, our expert compiled the complete breakdown of custom software development prices, including all the critical cost factors.
Software Development Cost Breakdown Based On Complexity
Project type, complexity, size, team composition, and industry-specific requirements significantly determine software development costs. Let’s understand the cost breakdown based on the software complexity that impacts the total cost of ownership.
1. Simple Software Development Cost
Basic software has essential features that require less time to develop. It is created to demonstrate the product app idea, examine the key assumptions about interactions with it, and determine customer reactions. Examples include basic landing pages, single-purpose apps, or pilot projects. Basic software also reduces the cost of development, which is around USD 18,000 – USD 50,000. This may affect other factors, too.
2. Medium Complexity Software
This development phase takes longer than simple development and involves more features than MVP (Minimal Viable Product) development. An MVP consists of only the core features needed to make the software functional. Moderate complex software costs around USD 50,000 – USD 150,000, which may affect other factors. Examples include user authentication, product search with filtering options, a mobile app with multiple screens and user interactions.
3. Complex Software Solution
Complex software comes with all the advanced features and tools that affect the average cost of software development and time. Examples include real-time collaborative editing, natural language processing (NLP) based chatbots, customizable user interfaces. The support and maintenance costs will also increase the overall cost of the software.
| Complexity | Estimated Cost (USD) | Development Time |
|---|---|---|
| Basic Software | USD 18,000 – USD 50,000 | 2 – 4 months |
| Medium Complexity Solution | USD 50,000 – USD 100,000 | 4 – 8 months |
| Complex Software Solution | USD 100,000 – USD 300,000+ | 8 – 18+ months |
Cost by Type of Software Development
1. Custom Web Development
Static web solutions are cheaper than dynamic solutions. Plus, you need to design the complexity and features based on the latest software development trends, which impacts the overall cost. This costs you around USD 18,000 – USD 50,000.
2. Mobile App Development (iOS, Android, Cross-platform)
The mobile app development cost differs based on your chosen platform, like iOS or Android. There are several factors to consider when choosing the platform for mobile app development, including cost. Cross-platform app development is the most suitable, considering the cost factor, because it offers a shared codebase across platforms.
3. Enterprise Software Development
Large-scale solutions like enterprise mobile app development support complex organizational processes like resource planning, customer management, and supply chain operations. Large-scale, feature-rich platforms like CRMs or ERPs can range from USD 300,000 to over USD 1,000,000 due to their scalability, integration needs, and robust security requirements.
4. SaaS Product Development
SaaS products are widely available with a subscription pricing model, so their costs vary greatly. It requires regular subscriptions and assists customers. This type of software uses cloud storage, so you must comply with data regulations like GDPR, HIPAA, and AML.
These are primarily web-based software such as Trello and Slack.
The average cost of SaaS software development is between USD 30,000 – USD 90,000.
5. AI & Emerging Tech Solutions (AI, Blockchain, IoT, etc.)
The cost for AI, blockchain, and IoT solutions includes data collection, model training, and infrastructure costs. Additionally, hardware costs like IoT devices, software licensing, and more.
The AI & emerging tech software development cost is USD 20,000 to USD 500,000+.
| Type | Estimated Cost (USD) | Development Time |
|---|---|---|
| Custom Web Development | USD 5,000 – USD 75,000 | 1 – 6 months |
| Mobile App Development (iOS, Android, Cross-platform) | USD 15,000 – USD 350,000+ | 4 – 8 months |
| Enterprise Software | USD 300,000 – USD 1,000,000+ | 12 – 24+ months |
| SaaS Product Development | USD 30,000 – USD 90,000 | 12 – 18+ months |
| AI & Emerging Tech Solutions (AI, Blockchain, IoT, etc.) | USD 20,000 – USD 500,000+ | 8 – 12 months |
Software Development Pricing by Industry
Software development costs can depend on the industry, too; sectors like healthcare and fintech require more complex software, which increases the cost.
Healthcare
Electronic health record (EHR) management system costs around USD 50,000 to USD 500,000.
FinTech
With secure data handling and real-time market integration, the FinTech app development costs you around USD 12,000 to USD 100,000.
Logistic
Route optimization and tracking features make the logistic software complex, which affects the cost. The average cost of logistics software development is between USD 20,000 – USD 120,000.
Factors Affecting Software Development Costs
Let’s explore the factors that influence the average cost of software development. However, the cost depends on your software requirements.
Type of Software Project
The nature of the software dramatically influences the scope and cost of development.
Size of the Project
The project’s scale determines its complexity, resource needs, and development duration.
Small-sized Development: These are minimalistic solutions or MVPs focusing on core features. Examples include basic landing pages, single-purpose apps, or pilot projects.
With MVP development services, such projects typically take 2–4 months and cost anywhere from USD 5,000 to 50,000.
Medium-sized Development: These projects involve more comprehensive functionality, including multiple integrations and user roles. Examples are e-commerce platforms, SaaS applications, or industry-specific tools.
Development spans 4-8 months, with costs between USD 50,000 and USD 150,000.
Large-sized Development: These systems handle complex workflows, multiple integrations, and advanced features like analytics or AI. Examples include healthcare management platforms or large-scale logistics systems.
Development time is 8-18 months, with costs ranging from USD 150,000 to USD 300,000+.
Enterprise-sized Development: These are full-scale, multi-module systems designed for global operations. They involve extensive user management, data processing, and interoperability with other platforms. Examples include ERPs, CRMs, and large-scale communication platforms.
Costs typically exceed USD 300,000 and may stretch into millions, with development times of 12-24+ months.
Development Team Size (As per Project)
Team size correlates with project complexity and the expertise required for its completion. Team size directly affects the software development cost.
Software Architecture & Integrations
The architecture is known as the software’s blueprint, ensuring that various components interact. It helps to streamline the development life cycle. However, complex architectures that involve microservices require experts, which affects the software development cost.
On the contrary, integration connects with the existing solution. This is a time-consuming and challenging process as sometimes you must deal with a legacy system or multiple APIs needing custom coding.
| Process | Example of Work Scope |
|---|---|
| Architecture design and planning | Define component interactions by creating a high-level system diagram |
| Complex architectures | Real-time analytics through a distributed system |
| Performance optimization, Scalability, and robust security | Access control, encryption of data, and load balancing for scalability |
| Integration with the existing solution | Integrate CRM with ERP, database connection |
| Third-party services integration | Mapping API for location features and cloud storage for files |
| Custom coding for integrations | Build API wrappers, Develop custom connectors |
Software Development Pricing Models
The pricing model is an approach that determines how the cost of a software product or service is calculated. There are four major types of software development pricing models.
1. Fixed Price Model
A software development company agrees to deliver a solution to the client for a predetermined price. This model helps you to predict the project cost before the development. Additionally, this model has a lower financial risk for you.
However, it is challenging to make changes to the scope, and the flexibility of this model is limited.
2. Time and Material Model
Time and material model payable based on actual time and materials used to develop the solution. It is a flexible model and allows us to make changes to the scope of work. However, you may face overspending on software development costs if not managed effectively.
3. Dedicated Team Model
In this model, you can hire developers, designers, and other professionals and create a structured development team. This model acts like an extension of your in-house team, you have full control & flexibility according to the project needs. The dedicated teams can adapt to project changes quickly.
However, it may cost you more in comparison to other pricing models.
4. Outcome-Based Model
This model works based on performance or outcomes achieved. It will benefit you and the developers, too. However, it has cons, like uncertainty in the revenue system and the complexity of metrics for big projects.
How to Reduce Software Development Costs
Multiple approaches will reduce the software development cost. This will help you if you are on a budget.
1. Consider Offshore, Nearshore, or Onshore Development
The first thing that comes to mind for reducing software development costs is opting for outsourcing. Now, the next question is whether to opt for nearshore or offshore?
Offshore outsourcing is all about working with teams in far-away countries with an hourly rate of around USD 20. Additionally, you’ll get access to a vast talent pool of developers, and it’s easy to scale your team.
If you want the same time zone and greater accessibility with the development team, you should consider onshore outsourcing. However, it will cost you far more than USD 100 hourly.
Onshore companies often lack the right experts, as it is challenging to afford to maintain unoccupied workers.
Nearshore software development is outsourcing to your nearby location for real-time collaboration and value, with minimal time zones. This approach makes collaboration easy and effective. Nearshore software development services are ideal for companies looking to balance quality, proximity, and communication. It’s a cost-effective approach compared to onshore outsourcing but still costs more than offshore outsourcing.
2. Build an MVP First
Building a minimal viable product (MVP) will help you to reduce the cost of custom software development. MVP is a fully functional product with fundamental features and not a prototype.
MVP also helps with the market feedback from actual users.
3. Use Pre-Built Solutions and APIs
Instead of developing everything from scratch, leveraging available functions results in faster development times, lower maintenance, and lower the average cost of software development.
Here are some examples of pre-built solutions and API integration:
4. Choose the Right Development Methodology
Iterative development allows you to prioritize and adjust the scope based on real-time feedback. Agile methodology prevents overbuilding and focuses on delivering value incrementally.
Why Choose Excellent Webworld For Your Software Development Needs?
We hope this article has offered profound insights into software development cost breakdown and all the factors that can be used to reduce software development cost.
However, if you need assistance, especially with development in the entertainment, car rental, healthcare, eCommerce, and logistics industries, Excellent Webworld is here to help.
With more than 13 years of experience and 900+ successful projects delivered, our experts are adept at designing mobile apps. Get customized development solutions consulting services from our experts.
We design solutions that meet your business-specific requirements and guarantee improved business. Contact one of the top software development companies to build custom app solutions.
Why Choose Excellent Webworld’s Dedicated Team Over In-House Developers?
By choosing Excellent Webworld’s dedicated team, you can access a pool of skilled professionals without the overhead of hiring in-house staff or the irregularity of freelancer developers.
This dedicated team offers perfect expertise, reliability, and scalability, ensuring seamless collaboration and high-quality results.
FAQs
Software with essential features and functionalities will take 2 to 4 months to develop. Moderately complex software can take up to 8 months, and highly complex software can take 8 to 18 months.
There are multiple types of software development, and each type of software costs differently.
There are multiple cost estimations that you can use, including three-point estimation, parametric estimation, and more.
US rates for software developers can range from USD 30 to USD 200, depending on the expertise, location, and experience.
Article By
Mayur Panchal is the CTO of Excellent Webworld. With his skills and expertise, He stays updated with industry trends and utilizes his technical expertise to address problems faced by entrepreneurs and startup owners.
