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November 13, 2024
To gain a competitive edge over competition, businesses are enhancing efficiency with the help of custom software development.
In 2021, the global custom software development market was valued at over $24 billion, and it is further projected to grow at a stunning 22.3% CAGR from 2023 to 2030.
Opting for custom software development is a strategic move for businesses looking to create solutions that fit their unique operational needs. However, finding the custom software development cost can be difficult for many business enterprises and startups.
Custom software development pricing can vary significantly, from $100,000 to $400,000, driven by factors such as project scope, complexity, and desired functionality.
With a market full of fluctuating cost estimates and an array of factors influencing pricing, it’s easy for stakeholders to feel uncertain about setting a realistic budget.
This article explores the key elements that influence custom software development costs, offering valuable insights into pricing and practical guidance for confident budgeting.
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Why Custom Software is the Key to Your Business’s Future?
It is a known fact that one software product doesn’t satisfy every customer’s need. To change this, custom software development has evolved to cater to the needs of every business.
Custom software development isn’t just a simple investment for a secure future. It is a strategic advantage over your competition that launches your business into a world of infinite possibilities.
Experts expect the software development market to reach $1.3 million by 2027, with a CAGR of 22.54% from 2020 to 2027.
This customized approach is the key component that gives the drive to take businesses to unimaginable success and increases efficiency. As firms embrace and adopt customized software, visionary companies make certain that their solutions are tailored precisely according to their specific needs and objectives.
Here’s what custom software development can do for your business:
- Custom software empowers you with unique features, impeccably integrating with your existing systems while creating a user experience distinguishing from your brand.
- Protect your business secrets with personalized systems built from the ground up, ensuring unmatched data security and privacy. This is imperative for businesses managing sensitive information such as financial or personal data.
- Businesses are dynamic entities as they are continuously growing and developing. Custom Software development is a foundation for long-lasting growth, providing means to adapt and scale seamlessly.
Keep in mind, that embracing adapted software precisely crafted to match your unique requirements and evolving business demands needs a considerable level of expertise and insight, which is only possible by reaching out to a leading custom software development company that understands the intricacies of your industry and can deliver customized solutions to drive your business forward.
Keep in mind that successful evolution in business requires thoughtful planning. Be sure to comprehend the costs and intricacies before setting out on this transformative path.
A Statistical Reasoning for Choosing Custom Software Solutions
Following are some of the interesting statistics on custom software development, rendering to different research:
- According to Statista, revenue in the Software market is expected to reach US$659.00 billion in 2023.
- Enterprise Software leads the market with an anticipated market volume of US$271.80 billion in 2023.
- There are approximately 7 million software developers worldwide, and their number is expected to grow to 28.7 million in 2024. There are almost 4.3 million software developers in the United States.
- According to Radix Web, enterprise applications form the groundwork for 7% of software development projects, 53.6% are devoted to business automation, and 38.50% are fixated on eCommerce.
- In 2024, the IT sector is expected to surpass its pre-pandemic status, displaying an estimated Compound Annual Growth Rate (CAGR) of 5%.
- According to Statista, the worldwide supply chain management software industry keeps growing and is expected to exceed $10.17 billion by 2025.
Breaking Down the Average Custom Software Development Cost
Predicting the custom software development cost in 2024 might be complex because there are factors that will affect the total cost. The size and complexity of the project substantially influence the price of any custom software development. In this section, we are going to discuss the average cost to develop software.
Following is a brief and rough software development cost breakdown:
Small projects
For a small project with few to simple features, such as a basic web application or a simple mobile application, the cost may fall within a range of $20, 000-$50, 000.
Mid-size projects
An e-commerce store or applications connecting to other systems will likely cost between $50,000 and $ 200,000.
Large projects
Development of large-scale and enterprise-level software that offers features like artificial intelligence and multiple and extensive integrations costs over $200,000 with chances of touching or going beyond $1 million.
Here’s a table comparing the estimated costs and timelines for various custom software development project sizes.
| Project | Average Cost | Time Duration | Examples |
| Small | $20,000 – $50,000 | 2 to 4 months | Basic web apps, simple mobile apps |
| Mid-range | $50,000 – $200,000 | 4 to 8 months | E-commerce platforms, feature-rich apps |
| Large-scale | $200,000+ | 8 months to 1+ year | Enterprise-level software, AI-powered solutions |
Note: These estimates offer a baseline, but the real costs will depend on individual project parameters, which we’ll discuss further.
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Top Factors That Determine Software Development Expenses
Custom software development costs are anything but straightforward. Numerous factors come into play, influencing the final price tag. For businesses seeking custom software, understanding these variables is crucial for smart budgeting and making informed choices. Let’s explore these elements in detail!
Project Objectives
In the starting discussion, highlighting your project goals becomes the keystone for calculating custom software development pricing. A distinct purpose guarantees the software’s value and enables effortless synchronization within the team. When the end goal is clearly defined, the development process speeds up and becomes more cost-effective, maximizing the value of every investment.
Competitor Analysis
A profound dive into competitor study, market research, and trend identification brightens your audience profile. Costs are complicatedly tied to the time and effort capitalized in audience identification. Understanding your audience’s needs is the foundation for designing cost-effective software solutions.
The Type Of Software You Are Building
Custom software development prices can vary depending on the industry in which it will operate. Specialized industries, such as automobiles, are going to be more expensive because they require their specific products. To ensure that the correct bespoke software development company is chosen for your organization, you must take the time to conduct due research.
Type of Software Solution |
Software Development Cost |
Development Duration |
Key Features |
| Education | $50,000 | 3 – 6 months | Learning Management Systems
(LMS), Virtual Classrooms, Assessment Tools, Content Management, Gamified Learning |
| Automotive | $80,000 | 6 – 12 months | GPS Navigation, Vehicle Tracking, Fleet Management, IoT Integration, Remote Diagnostics |
| Healthcare | $40,000 – $100,000 | 6 – 12 months | Electronic Health Records (EHR), Telemedicine, Appointment Scheduling, Prescription Management, Data Security and Compliance (HIPAA) |
A Step-by-Step Guide to Software Development
According to Radix, 84.70% of surveyed companies from the software industry develop Enterprise Applications for clients.
Start with the custom software development journey fundamentals, and move towards the stage where your investment is used while crafting your software.
The following are seven crucial stages of custom software development:
Stages |
Action |
Description |
Duration |
| Planning | Define project goals, requirements, and feasibility, and create a plan. | Establish the project’s foundation, outlining what needs to be achieved and how to approach it. | Weeks to Months (Varies by Project) |
| Analysis | Gather and analyze project requirements with stakeholders. | Understand user needs, system functionality, and constraints to define the software’s specifications. | Weeks to Months (Varies by Project) |
| Design | Plan software architecture, technical specifications, and UI/UX. | Create high-level and low-level design documents outlining the system’s structure and user interfaces. | Weeks to Months (Varies by Project) |
| Implementation | Write, test, and debug code based on design specifications. | Developers write the actual code, ensuring it aligns with the design and meets the project requirements. | Months to Years (Varies by Project) |
| Testing | Conduct various tests, including unit, integration, and acceptance. | Thoroughly evaluate the software to identify and resolve defects, ensuring it functions as intended. | Weeks to Months (Varies by Project) |
| Deployment | Install, configure, migrate data, and make software accessible. | Deploy the tested software to the production environment, making it available for end-users. | Days to Weeks (Varies by Project) |
| Maintenance and Support | Address issues, release updates, and provide ongoing support. | Monitor the software, fix bugs, provide security updates, and offer support to users as needed. | Ongoing (Varies by Project Needs) |
Note: The time duration mentioned is an approximate figure. It may differ based on factors like complexity and project scope.
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Major Factors Determining Custom Software Development Costs
The insights about factors influencing custom software development costs can help manage budgets and make wiser decisions. Here we’ve listed the major factors that affect the cost to develop software.
1. Software Size
Another key aspect influencing the total cost of a software project is its size. When it comes to the amount of screens, features, or overall functionality, the more intricate and large the project, the higher the cost. Larger applications will have a higher total cost because they require more time to design, develop, and test.
Software Size Classification:
- Small applications: 10 to 25 screens.
- Mid-Size Applications (25-40 screens)
- Large Applications: More than 40 screens.
2. Software Complexity
The size and especially the complexity of your software determines both the time and effort required for its development. It is clear that applications that call for complex features, complex algorithms, or heavy customization will require more resources and as a result increase costs.
This is particularly the case in applications with highly complex data processing or unusual patterns of logical interconnections. They typically call for many more lines of code and more time on code creation and thorough testing.
When complexity grows, it is also can be observed that the number of code lines increases. The size of individual apps could range anywhere between a few thousand to hundreds of thousands of lines of code in large-scale applications for enterprises.
3. Creative Design
The first thing that comes to mind about design is that it is not only about appearances but about usability. Application design is an effective way to make interactions between users smoother, which as a result increases their satisfaction. Whether it is selecting the typeface or a color palette or developing specific illustrations, creativity is the key to defining the aesthetic of your software.
Budget Expectation: While most design planning and iterations are in the $15,000 to $30,000 range, additional artwork or design elements may cost more.
4. System Integrations
The majority of customized apps involve interfaces with other systems, which might be difficult to implement during development. Merging well-known systems such as payment gateways (PayPal, Stripe, etc.) is straightforward, but merging with old systems or ordering third-party software and service providers may require more effort and money.
Budget Expectations: The complexity determines the cost and time required to integrate the various parts of the existing system. When creating a budget, it is important to consider certain potential concerns that may arise during the integration process.
5. Data Migration
If you have previous data that needs to be transferred to your new software system, the procedure will involve migrating and converting it into manageable formats. This phase can also be time-consuming and costly, particularly if the data format differs significantly among systems.
Migration Process: Often requires coding of custom scripts, converting data, then checking for correctness and subsequently revising several times for appropriate mapping. However, it’s important to note that the complexity and volume of data being migrated can significantly impact the cost.
6. Post-launch maintenance and Support
With custom software, your investment does not end once the product is on the market. Maintenance, upgrading, and technical support are critical and should be performed on a regular basis to ensure that the program runs smoothly and meets the needs of the users.
These post-launch service requirements are recurring costs, so a portion of the bespoke software development budget must be set aside. Maintenance of the program is critical to its long-term viability; this includes periodic upgrades, bug fixes, and the addition of new functions.
7. Software Security and Compliance
As we continue to innovate and advance in the digital world, the safety of your software is paramount, whether it is in healthcare, banking, or any other field dealing with sensitive information.
Following proper security measures and laws are the essential sections of software development. Adding larger security measures, encryption, or compliance features that increase infrastructure utilization can be costly. There might be additional costs if specialized security systems have to be incorporated or industry-specific regulation is applicable and complicates the process.
8. Outsourcing Project to Software Development Company
One way to achieve the objective of acquiring the best skills in software development while not providing all the requirements that a professional team requires is outsourcing the services of a professional outsourcing company. Outsourcing is actually a win-win strategy since it implies working with an entire team, including developers, designers, and project managers, who will appropriately finalize the work.
TekRevol is a top mobile app development company with extensive experience in providing high-quality software solutions. We utilize the power of technology to construct everything from a complicated business program to an eCommerce platform.
If you wish to have a more detailed insight into what we can offer, please visit our portfolio. One such example is the ‘Pure Plank App’, which is an almost perfect state-of-the-art application meant for a mobile device. It is representative of our capability to construct modern, friendly applications that will comfortably extend our client’s capabilities beyond our services.
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Hidden Costs to Consider in Software Development Projects
Many elements are influencing the cost of software development rather than only the actual development costs. In addition, you must deal with incidental charges that may damage your budget while carrying out the project. Now let’s outline some of the additional expenses that may be encountered.
Unexpected Feature Additions
Another well-known issue in software development is “scope creep”. This happens when additional features are added after the project has started, and it usually results in higher prices and longer timelines.
These feature extensions can cost you between 10 and 20% of the initial cost, depending on their complexity. You can avoid this, by making sure you agree on a specific and limited set of duties at the initial phase. It is necessary to leave some slack to accommodate any improvement attempts, but change should not be avoided.
Ongoing Infrastructure Costs
Your infrastructure’s requirements grow in sync with your software’s. When employing service providers for cloud services or maintaining your own on-premises servers, you will always incur recurrent fees such as hosting, storage, and database usage. Here are some typical infrastructure expenses:
- Hosting fees: range from $30 to $200+, depending on the server type and provider.
- Server Storage: These prices are mostly determined by capacity or size (measured in GB, TB) and media type (HDD or SSD).
- Database: Costs are often associated with the database system and its functions; these may be included in the hosting service tariff or paid separately.
These expenses will steadily escalate as your user base expands to meet the increased demand.
Compliance and Security Costs
Ensuring security and compliance measures especially in sensitive sectors such as health, finance, and commerce can greatly increase the cost of software development. Laws like GDPR or HIPPA are in place and all demand audits, certifications, and good security measures which leads to higher development costs.
The other measures that should be taken in order to protect sensitive information include the use of encryption, the usage of secure access, and regular vulnerability assessments.
Optimizing Software Performance
Performance optimization ensures that your software produces the greatest outcomes while using the fewest system resources possible. This could require modest coding optimization, improved database utilization, or hardware upgrades.
Performance tuning can cost between 10 and 30% of your project budget, but it is essential for maintaining application speed, reducing crash rates, and improving the overall user experience. The long-term benefits enable the company to run more efficiently and have happier users, making the investment worthwhile.
TekRevol’s Software Cost Estimation Process
At TekRevol, we have come up with clear-cut procedures that ensure clients are provided with accurate software development cost estimates. Our process helps you get an accurate and detailed quotation while at the same time keeping the project on track. Here’s how we do it:
Step 1: Initial Consultation
Our services are kicked off with a free consultation call that serves to briefly present TekRevol’s custom software development services and understand your idea for a project to collect information. If you think we are suitable for your project, we will arrange a second consultation during which we discuss it in detail and give you the cost breakdown of the software development.
Step 2: Detailed Project Analysis
Next, we go further into more details on your project by providing certain information as your app concept, business idea, required features & technical requirements, target market, and estimated time of launch. If you want to get an accurate estimation you must provide as much information as possible.
Step 3: Accurate Quote Preparation
With the acquired data, we compile a detailed quotation that shows all the potential costs affiliated with the project and the estimated duration. This assists you in comprehending the total cost of your software development investment.
Step 4: Finalizing the Deal
Once you have your estimated costs and development time, you will be able to determine which engagement model is the best for you. In case you require help in selecting the correct model, you are welcome to consult with our specialists. We will help you get started and make sure you are fully prepared to proceed with your project.
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Wrapping Up
When it comes to bespoke software development in 2024, you need to look at the financial aspects to guarantee that your project stays within your budget and business plan. While prices depend on various factors such as project complexity and technology, it’s vital to balance cost with the quality and functionality you need. By carefully evaluating your requirements and considering all your options, you can make a decision that aligns with both your budget and technical needs.
