There’s no one-size-fits-all formula for determining the precise cost of custom software development.
Rather, there are several different factors that stack up to determine the bespoke software development cost.
But when you’re looking to invest in a bespoke software, there’s always the question of getting a better ROI than paying for an off-the-shelf solution.
This is one of the key reasons why you need a crystal clear picture of the cost of building a custom software.
In this post, I’m going to show you how the cost of custom software development stacks up in different regions and countries across the world, as well as the several different factors that determine the costs of building a custom solution.
Several things go into the mix of custom software development pricing.
Regardless of the location and level of expertise of the developers you hire, there are several key things that will determine the eventual cost of your software;
The complexity of the custom software you want will ultimately determine its price. In fact, the more complex, yet user-friendly you want the software to be, the higher the price you’ll have to pay for it.
Why does this matter?
Complex logic requires more analysis, planning, coding and testing which translates to more time on the job.
If you require a software that can perform several heavy analysis, number crunching or scoring, or if your application requires a lot of features and variations, it will require more attention an efforts to build and this means more money.
The size of your software will ultimately determine the pricing for building it. The more different pages/screens you want, the more work is required to build your software and the more you’ll have to pay to have it delivered.
While this is not really the correct way of measuring the size of a software, it still can (in some cases) be said that:
The type of creative design you opt for can increase the workload of your developers. This includes fancy animations and user experience, complex and custom UI elements that make your software visually appealing and stunning.
If you opt for creative designs that will require more time and efforts, your developers will definitely ask for more money.
Integrating your custom software with several external software throws a lot of unknown variables into the mix. While some integrations are absolutely seamless, others may require several efforts to work.
If the custom software you want requires several different integrations such as a wide array of API programming, migration of database data, as well as the integration of legacy systems etc. you may be required to pay more.
Other integration may include integrating the custom software with Business Intelligence suites, CRM suites, accounting software, and CMS applications etc. A simple rule of thumb is the more complex the integrations are, the higher the cost.
If you already have data in an existing system that you want to move into your new software, considering it is more than what anyone can possibly type by hand, migration will be the way out.
Succinctly, migration is a custom script, which transfers data from an existing software solution to a new one, while processing and transforming it during the transfer in most cases, to make it fit into your new system.
That’s not all:
Though migration ought to be a straight-forward process, because the two systems will store data differently, there are several questions and decisions to be made.
After the new system is completed, migration efforts are run several times to ensure everything is translated correctly and the new system can interpret the data as desired.
The process of deciphering the translation rules, writing the scripts, and conducting a series of tests and adjustments, will require more time and efforts which can increase the cost of the project.
Timing is one of the most crucial factors that determine the cost of custom software development. A custom software that will take nine months to develop will be more expensive than one that will take five months.
So two key questions are often asked about timing during custom software development.
Why does this matter?
If your developers request for six months to build your custom software, but then you want the job done in five months or less, you may have to pay more to have it completed within the time frame you want.
Besides, the increase in costs may not be linear as you shorten the development time.
There’s a common joke when it comes to delivering of the software solution faster and it sounds as follows: “If a single woman can deliver a baby in 9 months, can nine women deliver it in one month?”
Not quite an exact match, but a similar metaphor can be applied to the software development process – if one developer can create the software in 9 months, it doesn’t mean that 3 developers will be able to deliver it in 3 months, as communication, planning and interconnected features of the software usually slow it down.
Several Software Development Life Cycles follow this time frame:
However, it is extremely difficult to gauge the precise time frame for all custom software development. Each project comes with different requirements and challenges that may affect the time frame for building a custom software.
What’s the real story?
How much does custom software cost, time-wise?
Here’s how the cost stacks up in 2019:
The average cost of hiring bespoke software developers in Europe aren’t precisely the same.
The continent has up to 50 countries or more, considering several tiny sovereign states. Most European countries can be grouped into regions based on proximity, competition, and the number of available software developers.
So let’s walk through the average costs of hiring bespoke software developers in Europe – using regions and proximities as a yardstick.
Software developers in this region are from Hungary, Czech Republic, Romania, Bulgaria, Poland, and Slovakia.
The average price of custom software development in these countries is $28 – $40 per hour. But in the Czech Republic, the price of software development ranges from $41 – $50.
Six countries make up the Balkan region and they include Serbia, Macedonia Croatia, Bosnia, Albania, and Slovenia. However, Greece will be added to this list, because of the similar price of hiring a bespoke freelancer in the country.
For countries like Albania, Serbia, Macedonia, and Bosnia & Herzegovina, software development prices range from $31 – $40. While in countries such as Slovenia, Greece, and Croatia, the cost of bespoke software development ranges from $41 – $50.
Several freelancers and companies in the Balkan region charge less than $20 per hour for bespoke software development. However, the average price for software development in this region is within $27 – $40 per hour.
Denmark, Finland, Norway, and Sweden are the four countries that make up the Scandinavian region.
The average price of ~ 55% of bespoke software development in this region ranges from $35 – $ 55 per hour for freelancers and IT firms. The rest ~30% of experts and companies charge an average rate of $51 – $100 per hour. And the rest 5% charge more than 100$ per hour.
Southern Europe and the UK
In countries like Italy, Portugal, and Spain, the average price of hiring custom software developers ranges from $32 – $46 per hour.
While in the UK and Ireland, the average price is $36 – $51 per hour. But the recommended price for hiring a top-quality developer in the UK and Ireland is $51 – $100 and above.
Software developers in this region are from five different countries including Armenia, Ukraine, Moldova, Belarus, and Russia. This region is known as the largest IT market across Europe which makes it a competitive market for software developers.
The average cost of custom software development in this region ranges from $25 – $35 per hour for most individual freelancer and IT startups.
However, some leading experts and leading IT firms charge anywhere within $50 – $100. As expected, premium bespoke software development services providers charge above $100 per hour.
Bespoke software developers in this region are from Estonia, Latvia, and Lithuania. Custom software development cost more in these countries compared to post-soviet states.
Most software developers who work as freelancers and the ones who work with IT startups earn within $41 – $50 per hour, on the average. However, more than 1% of bespoke software developers in this region earn $100 per hour.
Central and Western Europe
Countries in this region are Austria, Belgium, France, Germany, Netherlands, and Switzerland.
More than 28% of software developers (freelancers and companies) in Belgium earn $51 – $100 per hour. So Belgium is currently rated as the country with the most expensive custom software development services in Europe, based on the average price of software development in the continent.
However, the average price of custom software development in central and western Europe is $39 -$57 per hour. Recommended pricing in the region is $51 – $100 per hour. However, for Belgium, the average price is $60+.
Custom software development companies in the United States can be categorized based on their type, size, average hourly rates and average project sizes.
Though Canada is close to the United States, the average cost of custom software development is relatively cheaper.
On the average, you can hire a custom software developer within the range of $35 – $150 per hour.
Asian countries such as Philippines, India, Pakistan, Bangladesh, Malaysia, and Indonesia are all well-known locations for outsourcing.
India is considered the most prominent location for outsourcing software development. But the large pool of developers in the country has given rise to both healthy and unhealthy competition leading to extremely low prices.
The average cost of custom software development in India, Bangladesh, Pakistan, Malaysia and Indonesia ranges from $10 – $35 per hour. While in Japan and China, the average cost is $35 – $55 per hour.
In Australia, the average cost of custom software development falls within the scope of $35 – $150 per hour. While some freelancers can go for as low as $25 per hour, that seems to be the least on the average for freelancers.
Colombia, Argentina, Brazil, Venezuela, Mexico, Costa Rica, Panama are some of the leading countries in custom software development in both South America and Latin America.
The average cost of custom software development in these regions cut across $25 – $50 per hour.
Africa is a new IT market where businesses still prefer off-the-shelf solutions instead of building a custom software. However, countries like South Africa, Kenya, Nigeria, Egypt, Morocco, and Algeria boast of developers who can build bespoke software.
Average hourly rates of these developers range from $20 – $50 per hour – partly due to lack of competition and more expensive rates of outsourcing to other parts of the world.
So how much does custom software development cost?
The scope of your job, the location of the developers, the level of expertise and experience of the developers, and the time frame required to deliver your product will ultimately determine the cost of building your software.