A Guide to Software Development Costs: Challenges and Estimations

A Guide to Software Development Costs: Challenges and Estimations

In order to learn software development, it is important to know the costs involved. To build any digital product, pricing is a crucial factor. Though it is quite challenging to get the right estimates for the costs involved in the development of software, in this article, we have tried to fetch comprehensive pricing for the software development services and the key factors that influence the said pricing. In order to build the software, the vendor has to know many aspects such as the type of software, target platform, and the features that are required. So let’s read ahead for this quick guide to software development costs, its costs, and estimations:

The average cost of software development

Across the globe, the most demanded digital or software solutions are web and mobile applications. These can be roughly divided into three broad categories depending upon the level of complexities involved:

1. Basic apps (require approximately 500-700 hours) – Such apps require very little time for development and can be built pretty much faster. But they come with limited features and are quite simple.

2. Medium complexity applications (require approximately 700-1200 hours) – This kind of software has got some complicated functionalities as well as features.

3. Complex apps (require 1200+ hours) – The software involving such a level of complexities are time-consuming to build and engineer pertaining to the multiple integrations, security, complex architecture, etc.

But please keep in mind, the categories defined above are subjective and may vary. So, let’s have a look at the approximate estimations of different apps so that you can have a fair idea of the complete picture. The prices are based on the average rate prevailing in the region of Eastern Europe i.e. $50 per hour.

Approximate time and cost pertaining to the development of different types of apps are given in the table below:

Approximate time and cost for software development

Approximate time and cost for software development

In order to have a rough estimation regarding the pricing of the software, it is important that you provide your vendor, some basic details regarding your project.

Generally, the clients are asked the following details:

a. Idea: For instance, if you wish to develop a ridesharing app like Uber Pool. So, in this, you gotta explain your idea to the team of technical specialists of the software development company so that they develop an MVP for you.

b. A listicle of features: It is important to discuss with your vendor, a list of vital features that have to be implemented in your application. Do provide a detailed description of every feature (e.g. a map with pins, detect user’s exact location, etc.)

c. Wireframes: The engineers will love to have your own version of the design of the app.

d. Examples of the competitor’s software products like apps or websites: Such examples will help the developers to ascertain which features you love and which you absolutely don’t.

e. Design: Well, the design could be about anything that you like

f. Specification: If you have any, for the app

Cost factors in software development

There are several factors in the development of the software product that can totally influence and alter the pricing of development, so checking out these factors before you kickstart the development is really crucial.


Do you want an Android app or an iOS? Or maybe you are in need of just a web application for your business? Of course, the pricing of software development will depend upon the platform you choose for your mobile application. So, there is a need to consider some factors. For instance, if you already have an iOS app for your business, it is not possible to convert the application into an Android application and vice versa. Why? Because different platforms make use of different programming languages, have different SDKs and also the requirement of development tools across different platforms is different. So, if you wish to have an application that can work on both the platforms, you need to shell out more money and time with different developers.

UI/UX Design

The visual design and feel of the app are very crucial for it is all about the experience and design when it comes to mobile applications or a matter of fact, any digital product like a web application. Since it is all about a user, it is important to have an award-winning design and provide an immersive experience. So, depending upon the type of website and complexity, the time of development will vary.


Basically, there are two web development types: front-end and back-end. While front-end deals with all what a user sees and interacts with, the back-end or server-end, it is just like an engine for the application that has been developed or under development. Also, it is important to know that an application that runs on the iOS platform takes around 20% or sometimes 30% less time in its development. This happens because there are quite a number of devices that run on the Android platform and therefore, the developers need to provide support with a lot of versions and screen resolution.


Quality assurance services are really crucial in the development process because it is vital to test each and every component for all the possible bugs. For a successful launch, it is important to have a 100% bug-free solution. So, the cost of testing your product will depend completely on the level of complexities involved.

To summarise,

The technical factors that affect software development price are:

a. Platform

b. Design

c. Development

d. Testing

Other 3 factors that affect the final price of software development 

There are some non-technical factors that do influence the price of software development so they should be duly considered. The three most important of them are the experience of the staff, hiring options, and region from where the developer is. So, let’s read more about these factors:.

1. The seniority of the software developers i.e. Staff experience

On the basis of knowledge, technical know-how, and working experience, software engineers are divided into three broad categories – junior, middle, and senior software engineers.

Junior developers – Usually these developers have just started their professional journey and require the support while working, from their experienced colleagues. They are made to work in a team of more qualified developers and they often perform just the simplest of the tasks. Since they are well versed in just one programming language or platform, they can’t work fast enough. So, while you are looking for a software developer, do consider their skill set and think well before hiring them for the project.

Years of experience: 0-1

Middle developers – The more engineers work, the more experience they gain. Middle developers are well versed with technologies and are experienced enough to work on the project independently and solve complex technical issues.

Years of experience: 1-3+

Senior developers – In order to get the most effective variants for the development of your project, senior developers are an ideal choice for they are well versed with different programming languages. They can also provide valuable insights as to how the feature should work to cause fewer bugs etc. They can offer various options and can explain the advantages and disadvantages of choosing each of them in detail.

Years of experience: 5+

Software development rates, therefore depend upon the technical expertise and years of experience of the software developer. So, it is pretty much important to think twice regarding the developer you need for the development of your software product. If your product is quite simple, for instance, if you just need a landing page or a simple app, you can go for junior developers who can handle such simple tasks easily. But if you need any complex features or functionalities like payment gateway etc, you need more qualified and experienced developers on board. The more complex your project gets, the more skilled developers you need.

2. Hiring Option

The modern IT market renders a lot of opportunities for people to hire good software developers. The most popular options are – freelance developers, in-house teams, and outsourcing development companies.

Each of the above-mentioned options has its own benefits and drawbacks that we will discuss below:

Software Hiring Options

a. Freelance software developers: There are many platforms on the web that are quite reliable and from where you can hire freelancers to suit your own unique requirements. As you can see, indeed this option is the cheapest as you don’t need to spend on hiring and building an in-house team but surely, this is not the most trustworthy option. There are hardly any opportunities to control the work of the freelancers hence there is hardly any guarantee that your project will be finished on time and you will be satisfied with the deliverables. Having almost no or least assurance, there are high chances that you might face a lot of bugs in the software and you might end up losing a lot of money. There are several platforms where you can hire freelancers such as Fiverr, Upwork, and Freelancer, etc.

b. In-house developers: When you have your own in-house team of developers, you can easily follow all the stages involved in the development cycle. You can get in touch with them, anytime you wish, so it becomes easier to solve any possible bugs. However, the major issue while having your own in-house team of developers is that it requires a lot of time and resources to build one. It requires a considerable chunk of your finances and investments in the form of salaries, taxes, hardware, and software. There are several platforms from where you can hire developers and build your in-house team like Indeed, Glassdoor, and LinkedIn, etc.

c. Outsourced software developers: Hiring outsourcing companies for software development offer a lot of benefits. There are many offshore companies all across the world, so you have the liberty to hire software developers from anywhere in the world. Since software development rates per hour vary from one region to another, you can easily go for the affordable rates depending upon your financial bracket. But the main drawback is the time zone difference which you might face during the process of development. Some of the popular platforms to hire outsourced developers are Clutch, GoodFirms, and IT Firms, etc.

If you want security and quality both, the most suitable option would be to either hire your in-house team of developers or go for outsourced software developers. This way you will be assured of the control and will have peace of mind too.

3. Location (Region)

Nowadays, there is a tendency to have completely different rates per hour for software development from one region to another. For instance, countries such as the USA and Australia offer software development services at quite high rates per hour while Ukraine provides good quality services at less. So, have a look at the software development cost per hour from various different regions of the world given in this table below:

software development cost per hour from various different regions

So how to estimate software development costs?

Well, there is a two-step framework to estimate software development costs:

Rough Estimation: In order to have a rough estimate of the software development costs, it is crucial to have some basic information regarding your project (like I want a carpooling app like Uber Pool). After that, the software development specialists will analyze the project and will consider the vital features for MVP along with the time for their development. The rough estimate generally consists of the minimum/maximum time. This stage shouldn’t take a lot of time, just approximately 1-2 business days.

Detailed Estimation: Also called a planning phase, the business analyst of the software development companies, establish direct communication with the client in order to find out more regarding the project details and requirements. As per the requirements, they are able to make out the specifications. The phase of detailed estimation is different from rough estimation and consists of just a single number i.e. time required for the project. This phase lasts longer and may take up to 2 business days if you are ready with the set of documentation required or around 2 weeks if the software development company needs to do this for you.

So, to conclude, custom software development is a time-taking process, hence estimating the cost involved in the same is a complex process, involving a lot of estimates. There are a lot of technical as well as non-technical factors pertaining to software development that requires careful consideration beforehand. So, before you kickstart the development, make sure to list out all such factors and carefully assess them in order to arrive at the right price.

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