Custom Software Development Costs: The 2023 Guide

September 14, 2023 Business

In today’s technology-driven world, custom software development has become a viable option for businesses to meet their ever-evolving needs and streamline operational processes. This is why a growing number of modern enterprises are leveraging the capabilities of custom software to fulfill their multiple business requirements.

According to Statista, the software market is poised to be a $659 billion industry by the end of 2023. While custom software performs multifarious tasks and benefits businesses in limitless ways, calculating software development costs is still a considerable aspect for many companies.

The custom software development cost is linked to several factors. Therefore, in this blog, we will discover the various elements contributing to custom software development costs. 

How Much Does Custom Software Development Cost?

There is no universal price when it comes to developing custom software. As said above, the cost of building custom software varies significantly depending on various factors. So, to calculate the estimated cost, you must evaluate factors like the target platform, intended features and functionalities, software type, complexity level, location of custom software application development services provider, UI/UX design, etc. Also, you should evaluate the cost of software maintenance, upgrades, and third-party integrations.

All these elements make it intimidating to answer, “How much does custom software development cost?” On average, the cost to build custom software can range between $30,000 to $500,000, or more. There is no upper limit. The more features you integrate into your project, the higher it will cost you. 

Let’s understand these cost-determining factors in detail to get a specific estimation for software development costs.

Factors Affecting the Custom Software Development Cost

While there are various factors that impact the overall cost involved in custom software development, the following seven factors play a crucial role in determining the time and cost to build custom software.

Target Platform

Whether your project is mobile-based or web-based or you are creating cross-platform software that will run seamlessly on multiple platforms is a considerable factor affecting the development cost. Software development for each platform has its own set of requirements and, thus, costs differently.

For instance, if you want to build user-facing software for dating, building an iOS or Android application would be the right choice. On the other hand, if you are developing enterprise software to meet the needs of Fortune 500 companies, a web-based app or Windows-compatible software makes greater sense.

Project’s Complexity Level

Software complexity level is one of the most significant factors affecting custom software development costs. How much it costs to build software significantly depends on how many “screens” your software will support. In other words, when users take an action like click, scroll, etc., a new screen appears, and each screen requires extra effort, thus increasing cost.

When developing MVP, limit the number of screens. It will save initial development cost and reduces future expenses on adding unnecessary features that your target audience does not need.

Here is a time and cost breakdown of custom software development depending on the project’s complexity.

Software Complexity LevelDevelopment CostTime Frame
Simple$30,000 to $60,0003 to 6 months
Moderately Complex$60,000 to $120,0006 to 9 months
Highly Complex$120,000 to $500,0009+ months

UI/UX Design

The UI/UX design of your software is also a considerable factor. A visually appealing and intuitive interface significantly impacts the software’s development cost and success rate. The more effort and time your software development company spends creating an intuitive interface and optimal user experience, the more it will add to the overall development cost.

Location of the Development Company

Since the cost of development services varies considerably around the world, the geographical location of your software development services provider can also greatly influence the overall development cost. For instance, software development companies located in Eastern Europe or India cost less than those located in developed nations like the US, UK, etc.

Here is a cost breakdown of software development based on the average hourly rates of developers in different parts of the world.

RegionHourly Rates
Eastern Europe$35-$55
Western Europe$90-$110

Features and Functionalities 

The features and functionalities you want your software to serve are also the influential factors affecting the development cost. The more features your software has, the higher it will cost. For example, software with complex features like user authentication, payment processing, real-time monitoring, and integration with multiple third-party service providers requires more time, labor, and resources; thus, costs more. On the other hand, software with standard features costs less time, resources, and money.

Tech Stack

The technology and programming languages your development firm uses to build the software also contribute to the development cost. The selection of the right tools and technologies that help bring your project idea into reality directly affects the overall development cost.

Product Type

The cost of building custom software also depends on the type of product you want to build. Depending on your industry and business requirements, your software can fall into various categories and serve dissimilar purposes. Not to mention, different type of software is developed using different tools and technologies, accordingly taking different time and cost in development.

To get a clear idea of custom software development, here is a cost breakdown based on various software types popular in the modern business world.

Software TypeAverage Development Cost
Accounting$70,000 – $100,000
Communication Platform$20,000 – $100,000
HRM Solutions$30,000 – $80,000
CMS and E-Commerce$100,000 – $150,000
Payment Gateways$80,000 – $120,000

Final Thoughts

Calculating the cost to build custom software requires a thorough understanding of the various factors involved in the process. Even if getting an exact estimation of custom software development cost is intimidating, on average, it ranges between $30,000 to $500,000 or more. It is wise to partner with a trusted software development firm to get an exact estimation of custom software development.