Software Development Cost: Main Price Drivers In 2022
As you look to develop new software or upgrade existing applications, you need to keep your budget i.e. software development cost in mind.
Why? Because there are many different price components when it comes to developing software. And these factors change over time, making your budget somewhat dynamic in itself.
You can’t do much about the majority of these software development cost drivers, but you can begin planning your budget around them.
If you don’t do so, you could run into cost overruns or budget shortfalls, leading to delays or an unsuccessful product launch.
A study shows 28% of software projects fail due to inaccurate cost estimates at the beginning of a project.
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So do you want to be a part of that 28%?
Of course not!
Based on my experience with customers and market research, here’s a list of leading software development cost drivers you should be aware of in 2022.
Factors That Influence Cost of Software Development Project
1. Platform: Do you want to run it on a desktop computer, a mobile phone, or in the cloud?:
GIF Source: Giphy
When planning your budget, you need to consider the platform to run your software.
For example, if you want to run your software on a desktop computer, it will be less expensive than the same software running on a mobile phone. And if you’re going to run it in the Cloud, that’s going to be a whole other cost.
- Similarly, software developers on hire can build software for a Linux server for less money than developing it for an iOS device.
- If you want to run your software on Amazon Web Services (AWS), that’s going to cost more as well.
2. Project Size: How big is it?
The bigger and more complicated the software application is, the higher the price. If your software is simple with only a few screens, it will be cheaper to make compared to hundreds of different screens.
- The number of data tables and the functionality also affect the cost. Fewer tables can lower costs by 40-50%.
- While adding just one table that needs to be managed could increase development time by 25% or more.
For example, you can build a simple website with minimal cost in just a few days. But if you want to develop software for an ERP system, the development time could take months or years. As a result, it’s going to cost you a lot more.
A large majority of the software industry’s surveyed companies (84.70 percent) develop Enterprise Applications for their clients.
3. Project Duration: How long will it take to build the app?
In general, the longer it takes to develop a software application, the more expensive it becomes.
One of the essential parts of a software development cost estimator is project duration. You need to consider how long you want it to take and ensure developers have enough time for planning, research, testing, etc.
Besides, if you want to develop a simple app in a few weeks, your cost will be low. But if you want to develop complex software with a lot of functionality and tons of features, it could take months or years.
A survey says:
- In less than two months, 7.70 percent of developers can create a typical product with basic functionalities.
- The majority of the agencies, 38.50 percent, deploy software in 2 to 4 months.
- A common average developing term of 4 to 6 months was established by 61.60 percent of the development companies.
- In less than six months, 10.81 percent of software companies provide excellent software maintenance and support.
4. Technology Stack: Which programming language will you code in?
When choosing a technology stack, you need to analyze the benefits of each language and make a strategic decision.
You can use either PHP, C# .NET, Java, Python, or Ruby on Rails. Each has its own obvious advantages and disadvantages.
However, PHP is a more opted choice over others. It is easy to learn and implement, offers fast execution, and is cost-effective. 
The salary of a PHP Developer can range from entry-level to senior-level, depending on years of experience.
Image Source: Zippia
You need to keep in mind that the more advanced & demanding the programming language is, the more expensive it will be.
5. Developer Experience: Is it Junior, Intermediate, and Senior developers?
Developers’ experience can affect how much it costs to develop software.
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- If you hire a team of Junior developers, you have to pay less. But remember with little or no professional programming experience, your project cost will increase. This is because they will spend more time debugging and researching solutions for errors that somewhere increase development time. And, we know an increase in development time = increase in project cost.
- Hiring an experienced Senior Developer or a team of Intermediate Developers, on the other hand, will expedite and simplify the project’s implementation. But can ask for more salaries.
Accordingly, you can reduce your development cost by hiring more experienced developers.
6. The Complexity: How sophisticated does it need to be?
Developing simple software takes a little bit less time and is cheaper. But if you need your app to have more features, it can take longer and end up costing you a lot more.
Furthermore, for example, suppose you need to create a simple drag-and-drop service with only one page. In that case, it will be much faster & cheaper than developing an e-commerce website with hundreds of different pages, including products, product reviews, shopping cart, etc.
Therefore, you must consider how complex your software should be and recognize that the more features it has, the more time and money it will require.
7. Team Size: How many people will work on this project?
Software development is not a one-step process. It starts by defining the project, designing the modules, and finally building it.
- Each stage requires a different team to ensure success.
- You might only need one or two people if you have a small project.
- However, if it’s a big project that needs to be completed in a month or less, you’ll need a larger team to handle every stage of the development process.
It hinders that the more people you have working on this project, the higher your cost.
8. Hiring Option: Are you going to hire Freelancers, an In-house team, or an outsourced team?
There are three ways to develop software: Hire freelancers, an in-house team, or an outsourced team.
- Freelancer: If you choose freelancers, you’ll save on things like office space and equipment costs. You’ll also save on your overhead expenses and won’t have to worry about issues like commuting costs. However, you’ll need to start from the beginning of the development process, and it will take longer since there’s no team leader or manager to handle all of it.
- In-House: If you choose an in-house team, you’ll save on recruiting & training costs. There won’t be any expensive benefits like bonuses, company trips, etc. But in an in-house team, you can focus more attention on your goals and spend less time supervising people and making sure that they’re doing their jobs.
- Outsourced: Since the project is outsourced, you can either hire a dedicated team or hire freelancers. It will save on the costs of recruiting and training people, but it’s more expensive since you’re paying for employees’ salaries, benefits, office space, equipment costs, and other overhead expenses.
Ultimately, each has its own advantages and disadvantages, so you need to weigh them and decide which will work best for you.
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9. Region: Your developer location
Another ultimate factor that influences the cost of software development is the location of your developers.
Besides, the cost of hiring a developer varies from country to country. For example, in India, you can hire an experienced programmer for $20 per hour, whereas the Canadian will cost you around $40 or more.
- In Asia, offshore developer rates start at $20 for an entry-level offshore developer and rise to $35 for a senior offshore developer. Offshore development rates in large Asian tech hubs, on the other hand, continue to rise and can now reach $40–45 per hour.
- Nonetheless, offshore software development firms in Asia charge lower offshore developer rates than their European counterparts.
So it’s essential to have a list of countries where you can find your developer or team.
Key Tip: Hire your developer in the same country where your company is located to avoid time zone differences that can lead to delays, etc.
10. Time-To-Market: How soon do you need it?
The last thing that can affect software development cost is how soon you need to have your product. The time it takes to develop a customized app may vary depending on the project’s complexity, team size, location, etc.
Your best bet is to start this process early and provide your developer with as much information about the product/service you want. This way, they’ll be able to estimate your software development cost.
It will also help to tell them what kind of deadline you need. For example, do you need it in three months or less? Then try to stick with that deadline.
If you don’t have a specific deadline in mind, try to give your developer the least amount of time possible to complete the project without sacrificing quality. That way, you can establish that communication between you and your developer early on.
Conclusion
The cost and time will depend on many factors when it comes to software development. If you consider the listed 10 things, you’ll be able to get your own unique estimate and price.
So before hiring a developer or a team, it’s important that you do your homework first by knowing about these factors.
Software development companies like PixelCrayons can cost anywhere between $25000 to $150000.
These are just estimates, and in the end, it all depends on your budget, goals, purpose of the app., etc.
Thank you for reading.
Also read: Web Development Challenges
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