10 Factors Influencing Custom Software Development Cost

Custom software development is the process of creating a unique solution by developing software to solve a specific problem. It is not a generic, off-the-shelf solution, but is rather tailored to the certain needs and requirements of a business. 

Custom software development can range from full-scale application development to small application updates and customization. Typically, the process involves everything from research, development and testing to delivery, and most importantly conducting quality assurance before the product is launched. Thus the cost of a custom software application varies greatly depending on a wide range of factors.

Below I have presented a comprehensive analysis of the crucial factors for the software development project affecting the overall cost of the project:

The size and complexity of a project are directly in relation to the time duration and cost estimation of the project. As the number of screens or pages of the software increases, the amount of work required in the development process also increases. To provide an idea, small custom applications range from 10-25 pages, medium-size range from 25-40 pages while large applications are custom software with more than 40 pages.

The intricacies of the logic involved in a project are also closely correlated to the time required for coding and testing, which subsequently affects the project’s cost. Factors that increase the complexity of a custom project include the number of features, users, integration with systems and interfaces, and scalability.


Development Methodology

The development methodology used to develop custom software can have a significant impact on its cost. Different methodologies have different costs– for instance, popular result-driven methodology such as agile is much more expensive than the traditional Waterfall methodology because of stakeholder requirements and frequent check-ins and testing. This results in higher labor costs and a longer development timeline leading to a higher overall project cost. Thus, it is important to consider the cost implications of a custom software development project by understanding the differences between the development life cycles.


Tech stack

Tech stack concerns frameworks, programming languages, development environment, and whether the app is open source or not. The trending technologies and software development tools involved with the tech stack also impact the overall cost of a custom software project. The technical tools used for tasks like integration with other systems or external software bring a lot of unknown variables into the equation. Again, developing custom software across different interfaces like web or mobile platforms will also have different costs, as each platform requires different technical expertise and resources.

Technologies and tools at play for translation rules, writing scripts, and performing a series of tests and adjustments, also add both times and cost to the project. In this case, using a proprietary technology may become more expensive than using an open-source technology, as proprietary technology often requires licensing fees and specialized expertise. 


Location of the Development Team

Location is a key factor in software development hiring and can significantly reduce costs – especially when factors like living costs, business expenses, and taxes associated with a developer are considered. It is possible to save up to 50% of the development budget if you are willing to outsource your software development project in offshore countries such as South East Asia, Central Europe, and the Middle East. An effective strategy for assembling a development team is to involve a combination of developers for a steady and synchronized project pace which can be easily accomplished by an offshore hiring model.


Maintenance and Support

The extraneous factor in determining the cost of custom software development is continuous maintenance and support. This includes bug fixes, updates, and any other support that may be needed after the initial development is complete. The cost of maintenance and support will depend on the complexity of the software and the level of support required.


Average Cost of Custom Software Development

While it is difficult to provide custom software development projects with accurate pricing information, an average custom software development pricing can be made on basis of the size of the project – 

Project Size

Cost Estimation

Sample Project

Small Project

$10,000 – $50,000 

Voice recognition software

Basic application with features – $18K 

Streaming service software

Video streaming mobile application – $10K to $25K

Medium Project

$50,000 – $500,000

Web tech software

Depending on the requirements and specifications of the project – $5K to $1M

Healthcare software

Mobile application – $45K to -$80K

Multiple platform application (only development phase) – $80K to $120K

Launched application (pre-build stage to launch and maintenance) – $400K

Large Project

over $500,000

Search engine software

Prototype cost – $100M including costs for servers, bandwidth, colocation, and electricity

Maintenance cost –  up to $25M per year



It is possible to conclude that the cost of custom software development varies widely depending on the factors elaborately discussed above. Investment in custom software development goes a long way not only in terms of boosting a business but also in meeting its specific goals. Thus, it is crucial for any business to work with a reputable software company to ensure that you receive an accurate estimate of the cost of your project.

Frequently Asked Questions (FAQs)

  • How is the cost of custom software development determined?

    The cost of custom software development is determined by several factors such as complexity, features, technology, platform, team size, and location. A detailed quote is usually provided after understanding the client’s specific requirements and project scope. 

  • Will the choice of platform affect the cost of custom software development?

    The platform chosen for custom software development can greatly impact the cost. For example, developing a mobile application will be more expensive than developing a web application. It is important to consider the platform that best fits your needs and budget before starting the development process.

  • Are there any additional costs with custom software development?

    Yes, there may be additional costs with custom software development, such as maintenance and updates, team development and training, licensing fees for third-party tools or APIs, etc. These costs will vary on the specific needs and requirements of the project, so it is important to discuss all potential expenses with your software development team beforehand. 

  • What are some cost-saving solutions for custom software development?

    There are several cost-saving solutions for custom software development – opting for open source technologies, offshore hiring models and development, adopting agile methodologies, maintaining regular maintenance and support, etc.

  • How do you ensure a custom software project does not go over budget?

    To ensure a custom software project does not go over budget, it is crucial to have a clear and detailed project plan which includes all the deliverables, deadlines, and budget constraints. Having regular check-ins with the development team to assess progress and any potential budget changes can also help keep the project on track. 

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