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What Determines Custom Software Development Costs: 6 Key Factors

Project Management
Custom software estimation

How much does custom software development cost? That is the first question that interests customers when they want to develop a product to meet their company business needs. However, they cannot get a definite answer to that question as the costs may range from $3,000 to $200,000.

Why is the range so wide? The point is that the cost of software development depends on many factors affecting software pricing. Even companies working in this area for quite a long have a hard time providing an instant assessment.

In this article, we will explain to you what key factors determine the cost of custom software development, why they are important, and how the average cost of software development is estimated.

1. Project Functionality (Complexity and Scope of Work)

The more features you want to implement in your software product, the more developer time and other resources the development process will take. That means your project costs will primarily depend on that. It will cost even more, depending on the number of screens, business logic, and other features you want to implement.

Project complexity is determined not only by the number of functions that developers need to implement but also the complexity of the interconnections between various components, the necessity to integrate the product with third-party services, and several non-functional requirements like scalability and load resistance.

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2. Target Platform

You may want to develop your software based on web technologies, apps for mobile (iOS, Android) or desktop (Windows, macOS) operating systems. It is worth making your choice after you have analyzed the product’s target audience and know what platforms are currently in wide use.

Software development platforms

Web, mobile, and desktop software development involve different technologies, require different resources, and consequently, all differ in costs. For instance, the number of device screen sizes necessary to be adapted for Android apps is much larger than that for any iOS app.

3. Developer Rates and Team Size

This factor tangibly affects the final custom software development cost and is the key reason why IT outsourcing as a cooperation model is so popular. Depending on the country they are located in, development teams of the same skill level may declare extremely different hourly rates.

You can read about the average offshore software development rates by country in this article.

Besides, when hiring developers, you can resort to the following options:

  • Freelance software developers
  • In-house software developers
  • Outsourced software developers.

Each of the options is good in its way, but we recommend you to opt for either of the latter two. Read more on this topic in our article: In-House vs. Outsourced Software Development: What to Choose?

4. Development Technologies

Depending on customer needs and project technical requirements, developers utilize different programming languages ​​and technologies for custom software development. The hourly rate for a software developer also differs depending on how long the programming language and technology exist, what they are used for, and how difficult they are to learn.

That is also a factor that influences the cost of software development as well. Indeed, an app based on Go or Scala will cost significantly more than the one developed using PHP or Xamarin.

Software development languages

Read more: “Top 8 Highly Paid Programming Languages to Learn in 2021”.

5. Infrastructure and Other Resource Cost

Any software product requires certain resources and infrastructure to remain operable. They all depend on specific software functional and non-functional requirements and may include:

  • remote server for mobile app back-end part
  • cloud storage for user data
  • server or hosting for website operation.

If many users visit a website or launch an app at the same time, your product will require closer attention to its infrastructure. Besides, product integration with third-party services, API, license requirements, and other similar features will also increase resource costs.

Mobile App Architechture

6. UI/UX Design

Designers are engaged in graphic user interface and user experience design development. Humans are visual beings, and UI/UX design can both attract and repel users. Consequently, this stage of product development is becoming increasingly important.

App design services will cost depending on the number of screens and visual elements, unique graphics, and animation used in specific software. Design professionals create these elements and perform other work necessary to achieve a good user experience, and this kind of work is quite expensive. However, it pays off in a positive customer experience and increased customer loyalty to your app.

Average Cost of Software Development

As we have already written, no one can tell you the exact development costs. However, taking into account the factors listed above, we can assess software development cost in simple terms if we divide projects into three categories, depending on their complexity and scope of work:

  1. Small projects. Software solving one problem and requiring little development time belongs in this category. 5 to 15 screens.

Cost: $3,000 – $10,000.

  1. Mid-level projects. Such apps have several important functions and no more than 15 screens.

Cost: $15,000 – $ 50,000

  1. Large projects. Predominately, that is enterprise-grade software with multiple features, third-party integrations, data migration features, dozens of screens, etc.

Cost: from $50,000 and more.

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To make software development cost assessment even simpler, it is necessary to draw up a comprehensible list of technical requirements and document everything to the greatest extent possible. Based on this data, the development team will manage to make all necessary calculations.

Example of Calculating the Costs of Developing Software:

Example of Calculating the Costs of Developing Software

Software Development Cost Breakdown:

Software Development Cost Breakdown

When it comes to mid-level and large projects, it would be better to start with an MVP to reduce custom software development costs. A good team also plays an important role because experienced developers can advise you on the optimal solution and ways of optimizing your budget without damage to quality.


As you can see, the cost of custom software development depends on many factors and can consume a lot of time and money. Choosing the right team to carry out the project is an essential condition for customers’ success. Experienced developers will manage to plan all work stages well, help you save your budget, and maintain the final product quality at the highest level.

The Lvivity team has extensive experience in successful software development, implementing projects in different niches and of any complexity level. If you are looking for a reliable technology partner, write to us, and we will contact you to discuss the details.

February 11, 2021

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