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Cost of Custom Software Application Development Services – Outsourcing Guide for 2021

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Luis Monzon
Luis Monzon
Journalist. Reach me at

Following the COVID-19 pandemic, the global software development industry has seen a steep upward trend. Many entrepreneurs are also entering the market with new innovative software products.

Research shows that the demand for custom application development is at an all-time high in 2021 as more and more people are relying on software solutions in their personal and professional spheres of life.

Custom software development is vastly different from buying and using commercially available software, therefore, the first and most frequently asked question about custom development services is about cost.

Everyone is curious about how much it costs to develop a custom software application but the truth is, there’s no exact answer to this question. The cost of custom development depends on a number of factors – the most important being the requirements of the custom software you want to get developed. Read on to find out the main factors that impact the cost of custom development.

Factors that Determine the Cost of Custom Software Development Services

Here’s a list of six important facts that determine the cost of developing custom software applications.

1. Type of Service

There is a wide range of software development services that are offered by companies. These include custom development of mobile apps, web applications, desktop apps, web portals, SaaS products, white-label software, minimum viable products (MVPs), and business applications.

Each type of custom development service is different in nature and, hence, offered at a different price point. For instance, the cost of developing a custom mobile app is much higher than the cost of creating a small-scale website. Similarly, MVP development services also cost less than the cost of developing a custom SaaS platform. Therefore, the cost of custom software application development services varies depending on the type of service.

2. Deployment Platform

The choice of deployment platform matters a great deal when it comes to the cost of custom development. Since each platform has its own set of specifications and number of devices, the cost development can vary for different platforms. For instance, mobile application development services for Android, iOS, and Blackberry operating systems cost differently.

Android is the largest platform and there is a wide range of mobile devices that run the Android operating system. On the other hand, iOS runs on a significantly smaller number of devices. In terms of development, it means developing a custom app for Android is expensive than iOS because the app needs to be developed and tested for a large number of devices.

3. Size of the Software

It is difficult to have a set definition of what constitutes a small, medium, or large software application. The size of the software refers to the scope of the software project, or in other words, the magnitude of the software system itself. Depending on the number of features and functionalities of the application, the number of modules or screens, and the size of the software userbase, the cost of development can vary greatly.

The development, testing, and optimization processes of software applications with extensive functionalities and a huge userbase are time-consuming and expensive.

4. Software Complexity

Software complexity refers to the complexity of the logic behind the software applications. Some applications are straightforward and don’t rely on technologically complex algorithms whereas some applications require a set of complex features and need to be conditioned to complicated business rules.

For instance, a stopwatch application is an example of a simple software application whereas a real-time financial trading app is an example of a complex software application.

5. UI/UX Design

Design complexity is another factor that impacts the cost of custom software application development services. UI/UX design is an important part of the process of software development.

If the custom software requires various design customizations such as micro animations, aesthetically pleasing interfaces, and custom illustrations, then it can make the design process lengthy and expensive because it requires more designing effort.

6. Location

Your location and the location of your service providers are also important factors that impact the cost of development. Custom development services are expensive in some parts of the world, especially the US and UK. Whereas software companies located in Europe or Asia offer similar services at a lower price point.

If you seek offshore software development services offered by companies located in Asia then the cost of custom development would be a fraction of the cost you would have to endure if you hired an onshore software development company.

Average Cost of Custom Software Application Development Services

A simple google search will tell you that there are hundreds of thousands of companies that offer custom software application development services across different industry verticals. Every software development services company has a different pricing policy than others and it is nearly impossible to have one simple answer to the question of the costs of custom software development services.

As discussed in the previous section, there are many factors that impact the cost of development such as size, complexity, design, location, and choice of platform. Since every custom development project is unique in terms of requirements there isn’t a one-size-fits-all cost estimate that can apply to every project. However, after closely studying the pricing of leading software companies, we were able to ballpark some realistic estimates of average costs across the industry for projects of varying scales.

  • Low Range ($10,000 – $25,000): A low range custom development project consists of the bare minimum in terms of software features and functionality.
  • Medium Range ($25,000 – $75,000): At this range, you can expect services that cover the development of a small-scale application with a few main features and functionalities. For instance, developing an MVP usually falls within this range because it only focuses on essential features.
  • Average Range ($75,000 – $150,000): Realistically, there are high chances that your project might fall in this range. An average range project can involve building a full-fledged web application with sophisticated features or a mobile app for more than one platform.
  • High Range ($150,000+): High range software development services cover custom development of full-scale enterprise software applications or a feature-rich SaaS platform. Large-scale business applications with multiple components such as web portals and mobile apps can also come under this category.

By Staff Writer.

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