How Much Does Software Development Cost?

Key takeaways

• • Software development costs depend on the app’s type, complexity, features, technologies used, and how you hire your developers.
  • A simple app could cost from $25,000 to $60,000, with no upper limit. It depends on the sphere you are interested in.
  • To reduce software development costs, the best options are to hire an outsourcing firm, choose cross-platform software development, and create an MVP to check your business hypotheses first.

What is software development?

Software is a general term used to describe programs on PCs, laptops, and smartphones. This includes mobile, desktop, and web apps.

Software development includes the designing, programming, and testing phases a company faces when creating and maintaining apps. Usually, it starts with your company needing an upgrade or a completely new product. At this stage, you need to think about how to transform the concept into a functional and usable software product.

Some apps are created for the employees and the company itself. For example, business automation apps, team communication platforms, project management systems, etc. Other apps are created for interacting with customers, such as marketplaces, financial apps, fitness apps, etc.

The types of software

In general, software can be divided into four categories: native mobile software, cross-platform apps, desktop programs, and web apps.

Native mobile apps

Native mobile applications are created for a specific mobile operating system using platform-specific frameworks and programming languages. They take advantage of the OS they are built for and work efficiently with APIs.

The cost of software development is higher if the product is built to be compatible with several operating systems.

Cross-platform mobile apps

Cross-platform development is a great way to cover both mobile operating systems at the same time, as these apps are based on a single code base. Developers use specific frameworks and technologies to write code once and deploy it to both iOS and Android. 

React Native and other cross-platform frameworks simplify the development process and provide UI libraries that copy the look and feel of target platforms. Here’s how we designed a crypto wallet using this method.

Web apps

Web apps are not tied to a specific operating system and so must be responsive and easily adaptable for different devices, screen sizes, and orientations. To create web applications, programmers use a specific technology stack, including CSS, HTML, and JavaScript.

Take a look at how we developed a healthcare web app that helps users find the right therapist and take care of their mental health.

Desktop apps

This is software designed to run on desktops or laptops. It’s installed and executed directly on the user’s operating system. Desktop apps are specific to a particular platform: macOS, Windows, or Linux.

Some desktop apps can work offline without a permanent Internet connection, while others have online functions that require a connection to the Internet.

Check out how we created a desktop app for our client: a stun gun data analysis app.

What influences software costs: 5 factors

App development price varies depending on:

• • type of app,
  • the complexity of the app,
  • technologies used,
  • a number of features that the client wants to add to the app, 
  • a number of team members and hiring methods: in-house, freelance, outsourcing.

Each company has its methodology, level of expertise, and rating. Therefore, it’s hard to give the average costs of software development. As each app has individual requirements and serves a specific goal, it’s difficult to say for sure “your app will cost this much” without research and planning. We will still do our best to look at some approximate estimates below.

Let’s discuss the main factors that affect the cost of software development in more detail.

1. The complexity of the app

The project complexity varies based on the features that the customer chooses to include and the user interface design. All of this requires careful planning. If you want to create a custom app with complex user interactions and advanced animations, developing your app will be more complicated. 

The complexity also increases when your software needs to interact with external systems, such as payment gateways, social media platforms, and third-party Application Programming Interfaces (APIs).

2. The technical stack used

To create an app that covers several platforms at the same time, it’s better to opt for cross-platform development, otherwise, the costs and time required to develop software increase dramatically. This is due to the need for platform-specific coding, optimization, and testing for separate apps.

Additionally, the choice of the technical stack affects the development time, which will ultimately impact the cost of software development. 

3. The type of contract

There are three ways to find a software development team: employ an in-house team, hire freelancers, or turn to an outsourcing company.

In-house: hiring a team that works directly for your company. This option provides better control over the development process and makes collaboration easier, but is also the most expensive. You’ll face extra overhead equipment and office rent costs, as well as the expense of recruiting and HR management.

Freelance: hiring specialists to do a particular project. This can be good for flexibility and a low-cost option. However, finding the perfect specialist with the right portfolio takes a lot of time and effort. Managing several freelancers can also be a challenge.

Outsourcing: partnering with a software development company. Outsourcing companies give you the opportunity to work with a ready-made team of talented and experienced professionals. These software development companies have robust project management processes in place, so they can handle project planning, coordination, and communication effectively. Outsourcing is also a cost-effective option. 

If you think outsourcing is the right solution to develop software for you, learn more about Purrweb’s mobile app development services.

4. Industry and regulation requirements 

The industry you plan to operate in will impact your software development price. Certain sectors and markets are bound by stringent regulations, for example, HIPAA for healthcare or GDPR for apps that work with European Union residents. In order to comply with these regulations, developers must navigate through legal requirements, implement specific security measures, and sometimes undergo extra testing. This adds complexity and makes the development process more expensive. 

5. Location and experience of your team 

Consider where your development team is located and what projects they have had under their belt. These factors play a key role in determining average software development costs because salaries for developers vary widely across regions and countries. For example, developers in Eastern Europe typically expect lower salaries compared to those in the United States or the United Kingdom. Statistics reveal that the average annual salary for a software developer in the United States is around $127,000, while in Poland, it averages approximately $49,000. 

On top of that, the experience level of the software development team significantly impacts the costs. Senior developers with diverse and versatile portfolios ask for a higher hourly rate that reflects their proficiency and skill set. Junior developers may be more cost advantageous but will require more supervision from your side.

3 payment models for software development

Software development projects often involve different payment models that determine how the work is priced and charged. Let’s focus on the 3 most common payment models: fixed-price, time and materials, and the hybrid model.

Fixed price model

Imagine you walk to a store and buy a piece of clothing. The price tag is set, so you just pay what it says and leave. With no negotiations, discounts, or changes. This is a fixed-price model for software development costs.

In this approach, a development team defines a project’s scope, requirements, software complexity, and deliverables before work begins. Then, they calculate the cost of the software development project upfront, providing clarity and predictability.

For example, if you want to develop a basic mobile application with specific features, you might negotiate a fixed price with a development team based on the agreed-upon requirements. However, any changes or additional features requested during the software project might lead to extra costs or timeline extensions. 

For whom: This model is suitable for projects when you have clearly defined scopes and don’t expect many changes throughout the software development process.

Time and materials

The time and materials model, or T&M in short, offers more flexibility for software development. Imagine you hire a catering company for a party and receive an estimation that includes the costs of groceries (materials) and an hourly rate for a chef to prepare the food (time).

With this approach, you pay for resources used and the time spent during the development process.

At Purrweb, we use a T&M model and bill clients for the hours worked and the materials utilized. This model allows us to provide more flexibility and accommodate changes and evolving requirements as they come up. There is one potential downside of this model: the final software development costs can be unclear, especially if your scope expands significantly. We recommend discussing your budget with the development team and setting an upper limit on the budget.

For whom: If your project scope is not defined at the start and you feel like things can change.

Hybrid model

The hybrid payment model combines elements of both fixed pricing and time and materials. It’s a balance between flexibility and predictability. 

In this model, a development team prices the core features or initial phases using the fixed price approach, while additional features or subsequent phases are charged based on time and materials. 

For instance, your project team can use the fixed-price model for the basic platform features and then employ the time and materials model for additional features or ongoing support. 

This approach provides a balance between a clear budget for the primary project phase and flexibility in the following software development stages.

For whom: If your project has defined basic requirements, but you expect things to change later on in the software development.

The average cost of software development: 6 examples

Let’s talk numbers. Below, we’ve gathered several apps with different functionality and design that the Purrweb team has evaluated. Let’s talk about the average costs to develop an app.

Memo

Here is a short summary of the information below for busy readers.

Type of app	Estimated cost	App features
Healthcare app	$100,000-$250,000	Differ significantly from app to app.
Dating app	$50,000-$120,000	– secure registration form – user profiles – geolocation – partner search algorithm – audio/video chatting – in-app purchases
Fintech app	$80,000-$260,000	– linking a card – payment gateway – basic financial transactions – advanced data encryption – security protocols – custom notifications
Marketplace app	$50,000-$150,000	– user registration – product or service listing – search and filtering – order tracking – payment processing – reviews and rating
Social media app	$60,000-$300,000	– sign in and onboarding – profile settings – messaging functionality – content creation functionality – push notifications
Educational app	$50,000-$150,000	– user profile – dashboard  – push notifications – onboarding – security features

Healthcare apps

Wellness and health management apps allow to use modern methods of care, track symptoms, and improve the interpretation of physical and mental health analyses. For example, you can find medication delivery apps, apps for communicating with a doctor, and fitness trackers in this category. 

Common app features: differ significantly from app to app. Usually, there is a smart search, a user profile, a key metrics overview, a dashboard, and push notifications. Also, don’t forget that you might have to build a HIPAA compliant app, which means additional costs have to be accounted for.

Costs: A simple app with basic features will cost you approximately $25,000. The cost of an average complexity app will be around $45,000.

Dating apps

Apps like Tinder are incredibly popular, helping users chat with people and find partners. There are three kinds of dating apps: with location-based, profile-based, or niche-based search options.

Common app features: a secure registration form, user profiles, geolocation, partner search algorithm, audio/video chatting, and in-app purchases.

Costs: an MVP for dating will cost you about $55,000, and a full-fledged mobile app will be close to $70,000.

Fintech apps

Financial technology allows us to access and manage finances digitally. There are several types of fintech software: banking apps, payment processing programs, insurance, investment & personal finance management apps, and exchanges.

Common app features: linking a card, a payment gateway, basic financial transactions, advanced data encryption, security protocols, and custom notifications.

Costs: the average costs of software development in fintech start from approximately $59,000. But banking app development cost can fluctuate a lot, so do proper research, if you want to complete your project.

Marketplace

The marketplace app is a platform where buyers and sellers can connect and trade goods or services. The complexity of these projects varies depending on desired features.

Common app features: user registration and authentication, product listings, payment processing, and rating systems. 

Costs: on average, the estimated software development cost for a marketplace app ranges from $80,000 to $100,000 for a basic version with essential features. More sophisticated marketplaces can cost $120,000 or more.

Social media

​​Social media apps facilitate communication, networking, and content sharing among users. Factors such as platform compatibility (iOS, Android, web), UX/UI design requirements, and backend infrastructure can increase or reduce software development costs, depending on your strategy.

Common app features: user registration and onboarding, newsfeed, photo and video sharing, content creation functionality, messaging functionality, and push notifications.

Costs: an average social media app can cost from $56,000 for a basic version with core functionalities. However, more comprehensive platforms with advanced features like real-time messaging, live-streaming, and augmented reality filters can exceed $90,000 in development costs.

IoT

IoT (Internet of Things) applications enable communication and data exchange between connected devices, sensors, and systems. These platforms require complex integrations with hardware components, cloud services, and data analytics services, which subsequently impact software development prices. 

Common app features: user profiles, onboarding, dashboard, push notifications, and security functionality.

Costs: an average price for an IoT application can range from $47,000 to $70,000 for a basic version with fundamental functionalities. The final costs widely depend on factors like device compatibility, data security, scalability, and interoperability with existing systems.

Tips for minimizing software development costs

Not all the software development cost factors we discussed above are unavoidable. Meaning, it’s not essential to create a fancy custom app with advanced functionality and hire an in-house team to do this. Usually, a good MVP would suffice. Let’s see how you could cut costs and boost efficiency. 

Go for cross-platform mobile app development

As a rule, any company that provides mobile app development services works with both operating systems. It is possible to design two apps for iOS and Android systems separately. Would you want to practically double the budget to get native apps? If not, cross-platform development is a solution.

At Purrweb, we use the React Native framework to build compatible native-like applications. The large library of pre-built components and plugins available in the React Native ecosystem significantly speeds up the development. It’s a perfect solution to minimize the software development cost.

Start with a minimum viable product

We have more than 8 years of experience in developing apps for businesses, and the idea we always come back to is “start with an MVP”. The main pros of developing a minimum viable product include:

• • Launching your product and entering the market faster.
  • Testing your idea in the market without spending much money.
  • Getting feedback from real users and finding ways to improve your app.
  • Attracting investments for your company’s further development.

There are many more advantages to building an MVP first and turning it into a fully-featured product after testing in the market. Learn more about this in our article on MVP product development.

Outsource instead of hiring an in-house team

One more way to reduce the software development cost is to hire an outsourcing company. This way you don’t spend time and resources searching for each specialist individually, checking CVs and portfolios, establishing communication between employees, or renting an office. 

While there may be challenges, such as cultural differences, outsourcing allows you to choose a well-consolidated team that has already streamlined all the internal processes. Communication through the project manager and analysts will be convenient both for the team and for you. Read more about outsourcing for startups. 

The average cost of software development by size

To help you estimate development costs and show how a budget can vary depending on a company size, we calculated approximate project costs for a simple mobile app and chose the best payment model. Dive in and make informed decisions!

Startups

Average software development cost: $13,000 to $75,000

Best payment model to choose: time & materials

Startups often operate with limited capital but aim to bring innovative ideas to market. That’s why they typically require cost-effective but flexible solutions. The custom software development costs can range from $13,000 to $75,000 for a simple mobile app. 

Most startups start with an MVP, a minimum viable product, and a limited budget. The T&M model provides an opportunity to set financial limitations for the development phase but stay flexible on adjustments. If you discover new features you want to add, after working with user feedback, the software developers will have the capacity and resources to accommodate your requests and ensure the timely launch of the product.

Small and mid-sized companies

Average software development cost: $35,000 to $136,000

Best payment model to choose: hybrid

Small and mid-sized companies often need more complex and feature-rich software solutions than startups. The cost can vary from $35,000 to $136,000 for a simple mobile app, depending on functionality, design, and other requirements.

As small and mid-sized companies are often interested in growth and scaling up, for these projects, the hybrid model is a great choice. The basic fixed price for the core functionalities or the initial project phases ensures a clear budget and a defined scope, while the T&M approach caters to any adjustments or ongoing maintenance costs. The hybrid model provides a balance between budget certainty and flexibility, and creates room for adaptations during custom software development.

Enterprises

Average software development cost: $56,000 to $185,000

Best payment model to choose: time & materials

Enterprise software includes complex integrations, high-security standards, and a need for scalability. That’s why the software development cost estimation is always high. For a simple mobile app of this level, you would pay from $56,000 to $185,000.

The time and materials model is a great help for enterprise development. On one hand, you will be flexible with ongoing changes in project scope and requirements. On the other hand, your developers will have enough resources to address the evolving requirements in the industry. For example, new data security standards.

Software development cost breakdown at Purrweb

The costs of software development projects can depend on many factors: the payment model you choose, complexity level, functionality, and location of developers. We could go on and on, describing how different prices can be. Instead, we want to provide you with some clarity — here is the development cost for a mobile app built by our dedicated team. 

🚨Disclaimer: The estimation of software development services is provided by Purrweb and can vary from team to team. We don’t guarantee that other companies provide the same quotes and timeframes for similar projects.

Stage	Scope	Approx. time	Approx. cost
Initial meeting	Define project requirements and estimate resources needed.	1 day	Free
UI/UX design	Map user journeys, create interface concepts, and get approval	4 weeks	$5,400
Development	Built on architecture and the interface on both client and server-side	9 – 10 weeks	$36,000 – $40,500
QA Testing	Test the code to locate bugs and fix them before the release	concurrently with the development	$5,400 – $6,000
Project management	Manage the development process and control deadlines	during the whole project	$3,950 – $4,100

About us

At Purrweb, we provide mobile and web development services with user-centered and simple UI/UX to elevate interactions with our software. We help startups and existing companies build an MVP and test a business idea with real-world customers.

Want to move forward with your idea and consult our developers? Drop your email and we’ll get back to you soon

We have extensive experience in developing mobile apps, websites and portals, native apps, and PWAs. Our dedicated team can accommodate different budgets and make sure custom software development cost meet your expectations. Check out our portfolio with the latest cases.

How we work

We prefer to use the time & materials payment model to provide flexibility for MVPs. This way, our clients can adjust their project ideas based on initial release and feedback collection. 

To help startup owners estimate software development costs and avoid surprises, we provide a general idea, but always leave room for additional testing or a change of features and color scheme, in case you need it.

Summing up

The software development cost varies from case to case, and there’s no one-size-fits-all price. In most cases, you’ll need an individual session with an analyst to draft a project roadmap and make cost estimates. Good news: this is actually free at Purrweb! Fill in the form to contact us and get an offer.