How much does custom software development cost in 2024? Key factors + free estimate

*updated July 2024

Custom software development might have many benefits, but it doesn’t come cheap.

Even the most basic project can set you back around $50,000. And if you want a cross-platform app with all the bells and whistles, your tab could easily reach six digits.

Several factors contribute to this steep price tag, including team size and project complexity.

Understanding them will help you control your budget and make development more affordable.

Let’s dive in!

How much does custom software development cost? Quick overview

Let’s first get the most important question out of the way – how much does custom software development cost?

Unfortunately, there’s no easy answer – the best answer is “it depends”.

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But, we can give you a ballpark estimate based on the most important factor (spoilers!) – complexity:

Custom software development cost

Of course, it all comes down to the exact type of custom software you want to build.

For example, a simple tool with a few features will be much cheaper to build than enterprise software.

If you want to learn more about the process of estimating development costs, check out our in-depth cost breakdowns of Threads and Revolut.

But, let’s get back to what we’re here for – we’ll now discuss the 6 most important factors that influence the cost of custom software development.

6 custom software development cost factors

Here, we’ll cover each cost factor in detail and explain how they affect custom software development costs.

The custom software development team

One of the highest costs of any software development is payroll. Thus, how much you’ll actually pay depends on your team.

Here are some factors that shape your labor costs.

First, where are they located?

This is very important, because hourly development rates can vary wildly depending on your teams location:

Average hourly development rates by region

As you can see, the discrepancy is huge. A developer in the US could charge up to six times more than his counterpart from India.

This difference is what makes outsourcing a viable and cheaper alternative.

So, if you want to lower your costs, it’s best to consider outsourcing destinations like India, Asia, and Eastern Europe.

Developers there tend to charge relatively less compared to their counterparts in the global West, yet still deliver stellar work.

The team members’ experience level also plays a role.

Senior developers typically charge nearly twice as much as a junior role, as this graphic shows:

source: Devox

Mixing senior roles with middle or junior developers might be a good workaround if you’re on a tight budget.

The size of your team also impacts your price. This one is a bit obvious—after all, larger teams mean more developers that you need to pay.

So one good way to manage your costs is to optimize your team’s size.

But what’s the ideal size?

According to SmartBear’s survey of over 1,000 developers, the sweet spot is around 6–10 members for an app of average complexity.

source: Perception Box

Of course, this is just a benchmark. The actual number will depend on your project’s requirements and the roles it entails.

Whether certain team members can juggle multiple roles will also be a factor, as it will determine whether you’d need to hire only one coder/tester for each of them, or if multiple hires will be necessary.

Speaking of roles, if you need developers with special expertise, that will also add to the price.

For instance, if you’re developing a fintech app, then you’ll need a cybersecurity expert. Unfortunately, expertise like that doesn’t come cheap—around $75 to $200 per hour.

The same is true of other professionals you’ll need, like blockchain and AI developers.

This is partly why creating a fintech app isn’t cheap—expect to shell out up to $300,000 for really demanding projects.

The choice of the target platform

Where you choose to deploy your app will affect development cost, chiefly because refining your app to fit the platform takes work.

This is especially true if you’re developing a cross-platform app, rather than a native multi-platform one. Consider the difference:

source: Systango

This all boils down to extra effort.

With a native app, you must create and maintain two separate codebases for iOS and Android.

That also usually means hiring separate developers to handle them, effectively doubling your payroll costs.

Contrast this with a cross-platform app, where you only need to write code once and then deploy it to multiple platforms. Thus, this approach is both time and cost-efficient.

Also, you need to know that iOS and Android development have slight differences in cost. Take a look:

source: Ego

Notice how Android development costs more than a similar iOS app in North America. The exception is in Eastern Europe, where the difference is negligible.

That’s one of the reasons why we think you should outsource your projects there.

This discrepancy is largely due to the fact that it takes more work to develop an Android app.

There are hundreds of devices in the Android ecosystem, each with different specs, operating systems, and screen sizes.

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Thus, you must test your app on multiple devices to ensure it runs smoothly for all users. If it doesn’t, you need to think of a workaround.

All of that takes significant time and manpower.

iOS, in contrast, is more unified. Many programming complexities like memory are also handled in the background. That makes development far simpler and easier.

Also, many developers find that using iOS programming languages like Swift is easier and requires less time than their Android counterparts, like Java and Kotlin.

This can speed up your development time and, therefore, lower costs.

The complexity of the software

App complexity is perhaps the factor that influences development costs the most.

It’s common sense. The more features you want to have in your app, the more resources you’ll need to create them. That means added time, effort, and manpower.

To give you an idea, here are some ballpark estimates of how much complexity can affect development costs.

Complexity can be measured by the number of features or screens the software has. But it can also be influenced by how advanced they are.

Take the humble login functionality, for example.

Building a basic login screen with minimal bells and whistles can be as cheap as $100.

But if you want to add advanced security protocols like 2FA or encryption, the cost could balloon up to $10,000.

The same is true with other advanced features like e-commerce capabilities. In fact, adding it to your software can add anywhere from $2,000 to $25,000 to your budget.

And that’s just the upfront cost. You also need to worry about maintenance, which could set you back a few hundred dollars a month.

source: Officience

Adding automation technology like artificial intelligence (AI) and machine learning can significantly increase your development costs.

Fortunately, you can rely on third-party solutions to lower your costs.

For instance, you can use popular platforms like Zendesk or Meya to add chatbots to your app, typically costing less than $100 a month.

However, if you require a customized AI solution, be prepared to shell out $6,000 to $300,000, depending on the complexity.

Most of this cost comes from AI expert fees, usually $200 to $350 per hour.

The complexity of the design

Just as complex software can pump up development costs, so, too, can complex design.

That’s because custom UI and UX design take up a significant part of your development budget—around 18% for the average project.

source: Freshcode

Software with a fancy user interface (UI), custom graphics, and elaboration animation requires specialized skills to develop.

That requires you to hire graphic artists and UX designers for your team.

As expected, expertise like that doesn’t come cheap. To give you an idea, here are the annual salaries of design professionals around the world.

source: Career Foundry

This is especially apparent with mobile games.

As you know, games require plenty of custom graphics. Even the simplest 2D games have several assets that need to be built from scratch.

And if you want to develop a 3D game, that will cost even more. 3D graphics is a very demanding field, and talent is rare.

That translates to a high professional fee, which adds to your development cost.

Indeed, it’s why 3D mobile app costs start at $20,000, whereas a 2D game can be as cheap as $5,000.

Another consideration is your app’s logo.

Great logo design provides plenty of benefits to your app, including attracting more clicks to your app store page.

Unfortunately, it also doesn’t come cheap. Reputable designers can charge up to $15,000 for their work.

source: Just Creative

The bottom line is that your software design tends to have a noticeable impact on your costs.

So it’s best to consider whether the added expense can also add value to your project rather than just being mere eye candy.

The ability to integrate with other software

Nowadays, most software is rarely standalone. More often than not, it needs to integrate with existing systems or third-party platforms.

Unfortunately, this is another added expense during development. How much it will cost you depends on several factors.

First, using custom integration is generally more expensive in the long run than using commercial software to do it.

source: Exalate

This is understandable. Building integration functionality from scratch requires significant development time, human resources, and funding.

Fortunately, plenty of cheaper, third-party options exist nowadays that can do the integration for you.

One example is Plaid. It’s an API that allows fintech apps to connect to a user’s account on other financial institutions.

That way, developers don’t need to implement integration for every existing bank.

Another is Open Banking, a free API that enables financial institutions to offer their services to third-party apps.

source: Fortunesoft IT

Another factor that affects integration cost is the system you want to connect to.

The most expensive option is if you want your app to integrate with legacy systems.

That’s because older systems tend to be incompatible with modern software. Most are closed off and don’t support APIs, which means no external app can directly access their data.

They also present several challenges, such as security flaws and compliance issues.

This issue with legacy systems is common in financial institutions that want to modernize their infrastructure.

For example, they might want a mobile app to access their customer’s account information.

To get around this, you’d need to develop custom integration solutions such as a new API or data access layers (DALS).

Depending on the underlying system, this can cost anywhere from $5,000 to over $35,000.

source: Mod Logix

Contrast this with cloud-to-cloud integrations, which is far easier as most cloud platforms have APIs and web services for access.

As such, connecting your app with these systems can cost as low as $4,000.

The need for database migration

If your new app needs to import data from an older system, this will cost you as well.

In an ideal world, migration would be as simple as copying the data to the new software, and everything would run perfectly. But it’s rarely this straightforward.

Thus, you’d need a developer to write scripts to handle the migration process. As you can expect, this costs time and money. Plus, pitfalls during migration can further affect the price.

source: Mod Logix

The first factor influencing the cost is the data itself. If the data is in the wrong format or incomplete, it must be cleaned and processed first.

Larger datasets could make the process complicated.

Second is the amount of migration code developers need to write. Messy and incompatible systems would require complicated scripts to migrate.

Chances are you’d also need to hire an expert to write it for you.

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The third factor is the switching time from the old system to the new one. During migration, your current system might be down for a while, which could cost money.

Lastly, there are the potential differences between programming languages.

For example, if you need to migrate data between two different database systems, the incompatibility could be a roadblock.

Migration is often priced depending on the number of data entries. A ballpark estimate is $500 for every 1,000 records.

Custom software development cost: FAQs

Want to know how much your custom software will cost?

Unfortunately, sometimes there’s no escaping the fact that software development is expensive—especially if you want the best results.

That’s why the best thing to do is to ensure you get what you pay for!

And teaming up with the right software development team like DECODE can help you get the best return on your investment.

Have a project lined up? Feel free to reach out, we’ll take a look at your project and tell you exactly how much it would cost.