The short answer to "What's software development cost?" will be between $50k to $250k. Yet, a more particular estimate depends on factors like project complexity, platforms of development, UX/UI design, selected tech stack, and APIs. The development team's geographic location and partnership model also play an essential role.
In this article, I will explore the topic of software development costs. You'll get to know:
- Valuable insights to help you understand how much you'll need to invest in developing a custom app;
- Factors that contribute to software development costs;
- How to estimate the investment required for your custom app?
My name is Stan Burenko, and I have been working as a Biz Dev Manager in the software development industry for over 10 years. Throughout my career at Uptech, I have done dozens of project cost estimations for our clients. I have worked with established companies, like GOAT and Dollar Shave Club, and know how to reduce software development costs without compromising the quality.
Whether you are a startup looking to launch an MVP or an established enterprise aiming to enhance your software, understanding the software development cost implications will empower you to make informed decisions and optimize your return on investment.
Read on and find out more!
4 Key Factors That Make Up Software Development Cost
Figuring out the cost of developing software for a particular project can be tricky. The thing is a range of factors come into play when calculating software development prices. Here are 4 key components of an average software development cost:
- App type and complexity;
- Complexity of UI/UX design;
- Team’s geolocation;
- Cooperation model.
As it turns out, the average cost of software development fluctuates over a wide range. The technicalities and nature of the app play a role in determining the cost of development. However, other non-technical factors could make a difference in your budget.
Yet, it all depends from project to project.
While the average software development cost is between $50,000 to $250,000, the cost of custom software development can vary significantly. Thus, a lower price tag fits a simple app that takes less than 700 hours to develop. If you’re building a multi-platform app with a server-side application, the fee is likely in 6 figures.
For example, a simple social media app for one platform may cost $50,000. However, building the same app for the web, Android, and iOS, will cost approximately $137,000 with 2,750 hours of development. If you’re building apps like UberEats, expect a figure of around $150,000 for 3,000 hours of work done.
Let’s see the complete list of factors!
Factor 1: What’s Your App Type?
The cost of software development is primarily affected by the app’s type and complexity, which are determined before development starts. In particular, app type includes several elements:
- The app type itself;
- Complexity of the features;
- Platform and integration requirements.
How does app type influence your software development app?
In its lifecycle a product goes from a simple app with the most basic functionality and core features (an MVP) to a full-fledged app with a variety of features, modes, and optional details.
Yet, sometimes basic apps can continue existing in their most fundamental form – like MyHabeats and Love Island – those apps stay totally the same without any significant extensions.
At the same time, certain apps scale and evolve throughout their lifetime, offering new options and features and expanding target audiences. Yaza is a vivid example of this: the app has traveled a path from a location-based social media app to a location-based real estate product.
More complex and technologically sophisticated apps like analytic tools or social media platforms, involve more elaborate functionality and features, requiring more time and expertise for development. As a result, the paycheck turns out much higher.
For example, features like geolocation, mapping, and choices of payment options attract users to the ride-hailing platform. Developers also go to great lengths to ensure user data is protected on the backend. These features require time or money to implement, and they contribute to the development cost.
If the app requires heavy data crunching on the server part, it’ll be more expensive to build the respective modules. Also, the server-side application may also need to interact with external systems. Using off-the-shelf API could reduce development costs, but if a custom data exchange API is to be built, there’s no choice but to pay for it.
Cost optimization tip: Prioritize using API integration components over building customized software from scratch.
How does app complexity affect software development cost?
The rule is pretty similar here – the more coding and testing involved, the more the bill will rise. Basic apps with some features and functionalities will cost less. At the same time, integration of technologies like artificial intelligence (AI), machine learning (ML), or augmented reality (AR) will require more specialized developer skills, extensive coding, and meticulous testing.
Thus, not only do tech-edgy integrations extend the development timeline, but they also involve specialized developers’ skills, which boosts the software development price even higher.
Cost optimization tip: Open-source AI models like Chat GPT can be too bulky and expensive to use for early product stages. So, consider using a more simplistic model and fine-tune it to fit your app’s purpose.
Learn more about fine-tuning from Uptech’s DYVO case.
What about platforms and integration requirements?
Whether you build a native (iOS or Android separately) or a cross-platform app (deployable on both iOS and Android), the cost of software development would fluctuate responsively.
However, while cross-platform development may seem more cost-effective at first sight, it can have its trade-offs in performance, capability, and user involvement. At the same time, integrating third-party systems, APIs, and databases adds even more complexity, resulting in a cost rise.
Any app that adds massive value to users rarely operates in isolation. Such apps are often connected to external systems and require heavy backend processing. Uber is an example of complicated background processes hidden from the simple-to-use client interface.
Cost optimization tip: There are occasions when you can save in development fees by building a cross-platform app. A cross-platform app with the same codebase is deployable on both iOS and Android. However cross-platform apps save time if an experienced team is working, but they might not save time on some types of products, like fintech with graphs and dashboards, streaming, etc.
So consider starting with a single platform initially and only working on others when they have succeeded. Clubhouse, which started as an Apple-exclusive app, is an excellent example.
Factor 2: How Sophisticated Is Your UX/UI Design?
Another software development cost component is the complexity of the app's UI/UI Design.
UX/UI design involves graphic elements like buttons, fonts, icons, and colors on every interface. It’s also about how easy it is for the users to perform specific tasks on the app. It requires much effort from the developers to ensure that the app is visually pleasing and ensures a satisfactory user experience.
Those efforts translate into software development costs for startup owners. You’ll be paying for all of the custom artwork, animations, testing, and redesign to ensure that the app is built with the best UX features. In terms of UX/UI Design, there are three components that come into play:
- Depth and Detail of User Interface (UI) Design
- User Experience (UX) Complexity
- Responsiveness and Adaptability
Let’s look closely at each component!
How do the depth and detail of UI design affect the cost?
The simpler the design, the higher the cost. A minimalistic design with basic layouts and standard elements will be more affordable than a complex custom UI/UI with unique graphics, animations, and interactive components. The latter requires more time, creativity, and tech skills, directly affecting the cost.
For example, check out these two UI design shots.
Both are functional and totally achieve the intended purpose of the app. However, the versatility of details and complex color solutions make the fintech app’s UX/UI a lot more elaborate, which will result in higher software development costs.
User experience (UX) complexity
UX design works not only with the app’s visuals. It is also about the user’s overall experience with the app. To be effective in helping users accomplish their goals, UX requires profound research, user testing, and iterative improvement according to users’ feedback.
Creating detailed user personas, mapping user journeys, and designing wireframes and prototypes take a lot of time and resources. The more interactive, intricate, and tailored to UX needs, the higher the software development cost.
For example, at Nomad the complexity and depth of UX design was at the same challenging and exciting part of the project. After the profound Discovery stage, we had all the components on our table – Personas, Customer Journey Map, Project Roadmap, etc. With such valuable inputs at hand, we managed to build a sleek and complex UX/UI design, which helped users to achieve their goal – finding accommodation fast and fuss-free. Check out the Nomad case to see the result.
Responsiveness and adaptability
The number of platforms has something to do with this one too. Designing for several platforms, building adaptable screen sizes, and making them responsive and adaptable to different devices (smartphones, tablets, desktops) demands more planning and testing.
So this is how the cost rises: more adaptations, shifts, and gradual improvement means higher checks.
Cost optimization tip: For an MVP version of your app a minimalistic but user-friendly UX design would be more than enough. As your project evolves and acquires new features, switch to a more elaborate and targeted design.
Building the Plai platform, we had to build an MVP version of the app with a basic, but functional design, within 2 months. During these limited timeframes, we managed to hold 20+ interviews with target users, which helped us build a minimalistic but functional UX design. You can check out the full Pai case.
Factor 3: The Outsourcing Location For Your Project
The geographical location of your development team massively affects the software development cost. Depending on your location, the cost of software development differs. This is particularly true if you’re based in the US or Western European countries, where the hourly fee of developers averages around $100 per hour. The expensive hourly rate means you’ll need to bear a higher software cost.
It seems like an obvious thing to say, but let’s see how exactly this codependency works. Here are three factors that fall into the total bill:
- Cost of living and wage differences;
- Availability of talent and specialized skills;
- Communication and collaboration challenges.
Let’s break each down!
Cost of living and wage differences
The cost of software development will vary significantly from country to country. Check out the list of the best countries for outsourcing. Quality of development or work ethics rarely has something to do with it. It’s more about the state’s economic growth, cost of living, and wage levels.
For instance, the hourly rate of a developer in the US and Western Europe will vary significantly. Meanwhile, the Eastern European or Southern African hourly rate will seem surprisingly more affordable.
Hiring from high-cost regions means higher labor costs, significantly influencing the bill. In contrast, outsourcing to more low-wage countries will reduce wage expenses while not compromising quality.
Availability of talent and specialized skills
There are regions where the diversity of tech talent is smaller. While specific tech talent may be lacking in your business region, outsourcing can be a great way of filling this void. Regions with a friendly technological and business environment can be a perfect choice for you, as they certainly have specialists that can help you in a specialized niche rather than just development.
Communication and collaboration challenges
The location also impacts the ease of communication and collaboration. Teams in the same or nearby time zones find it easier to collaborate, leading to more efficient workflows and potentially lower costs due to reduced delays and misunderstandings. However, teams spread across vastly different time zones might face challenges in real-time communication, potentially slowing down the development process and increasing costs. Additionally, cultural differences and language barriers can also affect communication efficiency, which is an important consideration for multinational teams.
Cost Optimization Tip: There are, however, some regions where you can get software built for a much lower rate without compromising the quality. The Eastern European region is a favorite IT outsourcing region with many proven developers.
Ukraine, particularly, offers an affordable rate of $45 per hour.
You can get an even cheaper rate in countries like China and India, but you’ll need to be mindful of the cultural differences and time zones. It’s easier to work with developers who speak the same language, and it isn’t too hard to have a real-time conversation.
If you need extra hands but don't know how to find them. Check our blog and learn how to find app developers that suits perefectly for your project!
Factor 4: Collaboration Model With Your Outsourcing Partner
The collaboration model also affects the development cost. When you’ve decided on a developer, you’re often presented with 3 different collaboration options:
- Fixed-rate;
- Hourly rate;
- Dedicated team.
Fixed rate model
A fixed rate means that you’ll be paying a determined sum for clearly spelled-out requirements. While you know precisely how much you’ll be paying the developers, there isn’t much room for changes during the development.
Pro: The fixed model is suitable when project requirements are straight and clear, and are not expected to change.
Con: The fixed price model might be rigid and less adaptable to the changes in scope, emerging requirements or any amendments to the development process.
Note: Within the fixed price model developers should prioritize meeting the scope within the budget over innovation and quality.
Hourly-rate model
Unlike the fixed-price model, the hourly rate brings more flexibility and adaptation to the changing requirements. You pay for the people-hours and resources used in development. However, the total cost is vague, and you don’t have full control of the development team.
Pros: This model works well for fledgling startups, providing more control over the development process and the ability to adapt to the evolving requirements.
Cons: Working within the hourly-rate model, the overall software development cost may be unpredictably higher than the initial estimate. So there is a need for constant monitoring of the hours spent on the development.
Dedicated team
Another partnership model influencing the total software development cost is a dedicated team. As the title goes, this type of team is “dedicated” to your project exclusively, billing either monthly or as agreed in the contract.
Pros: this model is perfect for long-term projects with changing requirements, offering a balanced blend of flexibility and cost predictability. Under this model, you have a consistent team, and you can adapt the scope as necessary.
Cons: the dedicated team model usually has higher overall costs due to the team’s dedication and commitment to your project exclusively.
Learn more about cooperation models in our article: Dedicated Development Team: What Is It And When To Hire It?
4 Ways to Reduce Software Development Cost
Our goal at Uptech is to help develop products that make an impact while making the process accessible and transparent. With over 150+ projects under our belt, we have firmly established that a systematic approach to software development doesn't have to be daunting.
In fact, there are always opportunities to reduce the final cost of software development. Below, I share 4 ways you can effectively reduce the software development cost of your project. At Uptech, we understand the importance of optimizing costs without compromising on quality. So, by implementing these strategies, you can be sure to make your development journey more cost-effective and efficient.
Embrace open-source software
Leverage open-source software components and libraries to reduce software development costs. Open-source solutions often provide robust functionality, security, and community support without licensing fees. However, every time we use them, our team is mindful of licensing requirements and ensures compliance with any open-source licenses used.
Minimize third-party integrations
Integrations can bring a lot of value to a software project, but it's essential to consider the software development costs and potential complications that come with them.
Whenever we integrate a third-party service, we ensure it directly contributes to the core functionalities and adds real value to the final product.
For example, when you need to build a chat feature for a, let's say, a mental health app (like we did at Uptech), integrating a ready-made chat service instead of building a custom one can save a lot of time, which means saving up costs. The same goes for fintech products — instead of creating our payment system, we integrate with trusted platforms like Stripe or PayPal. It's a win-win because we get secure and reliable payments without the hefty expenses of building everything from scratch.
However, how more than one API integration works with another one can significantly drive your cost up and with the whole app architecture as a whole. Sometimes, when there are too many API integrations, you'll need to onboard an API integration specialist to manage their interaction. The extension of a team can lead to rising software development costs.
Implement Agile project management
Agile project management methodologies, like Scrum, are super helpful! They let us break down your project into bite-sized tasks called sprints. This way, we tackle the project in smaller, more manageable chunks.
We at Uptech practice Agile, and what's great about this approach is that it's iterative. It means you can get regular feedback, adjust, and reprioritize as needed. By working in these short cycles, we minimize the chances of costly rework. Instead, you can stay focused on the important stuff and deliver high-value features.
Simplify the design
By keeping the design clean and straightforward, you can cut down on development complexity and reduce software development costs significantly. We had some cases where we streamlined the user interface and removed unnecessary features or functionalities, which reduced development time and cost.
You can simplify the design or app’s functionality at some stage of development, launch faster, and only then polish the app with all the rest. Again, it’s about interactive development.
Software Development Cost Estimation at Uptech
We recognize that no two different businesses are the same and therefore, all apps are unique. However, startups and business owners need to know how much it costs to build the software to facilitate budget planning.
At Uptech, we have a systematic process to provide a cost estimate for our clients. After registering your interest with our company, our team will:
- Contact you to discuss your idea in detail. We’ll be asking specific questions on your app idea. We’ll also consider your business requirements, goals, and size.
- Determine the resources needed based on the information we gathered.
- Furnish you with an estimate along with the architecture diagram within 5-7 days.
Once you’re agreeable with the cost, we’ll move on and present several options for building the app the best way.
Summary
Getting a precise software development cost requires much deliberation between the developer and the client. Besides that, there are non-technical factors that could affect the cost of building an app or software. What’s important is to have a clear idea of the app in mind and reach out to the right developer.
Our team is ready to explore your app idea and furnish you with a favorable cost. Get in touch with our team.
FAQs
What are software development costs?
The short answer to "What's software development cost?" will be between $50k to $250k. Yet, a more particular estimate depends on factors like project complexity, platforms of development, UX/UI design, selected tech stack, and APIs. The development team's geographic location and partnership model also play an essential role.
How much does IT software development cost?
While the average IT software development cost is between $50,000 to $250,000, the cost of custom software development can vary significantly.
For example, a simple social media app for one platform may cost $50,000. However, building the same app for the web, Android, and iOS, will cost approximately $137,000 with 2,750 hours of development. If you’re building apps like UberEats, expect a figure of around $150,000 for 3,000 hours of work done.
How much does software development cost in US?
The software development cost in the US is higher than in other countries, because of the higher hourly rate for developers. In the US the average rate of developers is around $100 per hour.
What factors make up software development cost?
Here are 4 key factors that make up the average software development cost:
- App Type and Complexity
- Complexity of UI/UX Design
- Team’s Geolocation
- Cooperation Model