How Much Does It Cost to Develop a Software in 2025?

“Deliver software reliably, share ownership, decrease development costs, evolve designs and deploy continuously” - James Shore, Author of book “The art of agile development”

The cost of software development is something that every organization would be keen to know for developing software. And whenever they look to estimate the custom software development cost, they generally have two major questions in mind, “How much” and “How long”.

As a top-rated custom software development company, we have experienced that some clients or prospects always tend to ask us questions in project work – “Is this in my budget?” and “Can software fulfill all my expectations”?

And with our 25 years of experience in the IT industry, we have witnessed that most of our sales meetings regarding software development with our clients revolve around getting answers to these questions.

However, sometimes, they have no idea about the factors affecting the cost of software development. The cost estimation of software development may vary. And here at Radixweb, we keep our estimate process very transparent to our clients.

We know every project is different. The needs, objectives, preferences, and budgets of every business and individual differ, too. With years of catering to client needs, we have understood the main factors that are major for someone looking to build custom software.

“Software” itself is a broad term. Hence, it would not be feasible for us to know the software development cost until we know what your exact software requirements are.

So, let’s proceed with our discussion and understand the factors affecting the software development cost estimate.

The average cost of software development: price factors and real-world experience from our portfolio

Overview

When an organization or startup looks to execute ideas by developing software, the first question that comes across their mind is, “How much does software development cost?”.

It’s an inevitable question that we are asked on the first go. And it’s a tough one, even for us who have been developing software for over 25 years. Well, here’s our three-word answer: “It really depends!”.

Once you try to find out the software development costs, there will be two inevitable questions “How much?” and “How long?”.

Moreover, clients face two questions while partnering with a custom software development company. One is – “Is it cost-effective or can I afford this?”, and another comes – “Can a software company deliver in time to meet my expectations?”.

Actually, as per our industry experience in this software development services, we have analyzed one thing - every sales meeting with our clients mainly revolves around these two questions and their answers.

To be precise, our customers don’t realize the parameters that affect the average cost of software development. Cost estimation of software development may vary, and many of the vendors remain unaware of the estimation process.

We really hope that it was easy to answer - how much does it cost to create software? As a matter of fact, it's almost impossible to say anything without knowing and understanding the project requirements and other factors affecting software pricing.

Let’s go ahead with our discussion and give you a clear answer to what it means for you. Read on to find out more about:

• Software development cost breakdown
• How to calculate software development cost
• What factors define the custom software development cost

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Average Cost of Software Development

We know what you are thinking now!

Since you have reached here, you would be eager to learn about software development cost estimation. Pricing is essential if you intend to transform your business digitally.

As a top-notch custom software development solution provider, we outline what goes into estimating the amount of effort and costs required to build a software development project.

According to some of the following renowned industries given below, here we are giving you a basic idea of custom software development pricing.

Well, determining the software development cost for a specific project can sometimes get tricky. The thing is that multiple factors come into play when calculating the overall software development expense. Hence, the average software development cost depends on significant factors like app type, UI/UX design complexity, team geolocation, and cooperation model. On average, the cost of software development will be around $25,000 to $250,000. For example, basic marketplace software will cost you between $30,000 and $55,000. You also must consider your development team size and their salaries.

Pricing highlighted is industry base. It may not be true to your software development. Because it requires a detailed orientation of requirements, software complexity, technology and many factors to consider.

• Healthcare - from USD 75,000 to 250,000+
• Logistics - from USD 50,000 to 250,000+
• FinTech - from USD 90,000 to 300,000+

In our experience, web and mobile applications are the most demanding software nowadays.

So, let’s give you a bifurcation about that. (Note: This calculation is just to give you a rough idea. However, it may vary.)

If we categorize mobile and web applications by their complexity level, it would be:

• Simple and basic applications: Building an application takes around 500 to 700 hours. We can develop this app quite fast. But remember, the app’s functionality is quite simple.
• Medium complexity applications: Developing an application takes around 700 to 1200 hours. The software consists of more complex features.
• Large-enterprise complex applications: This software could take around 1200+ hours. Building an application requires a lot of time, industry expertise, and research, as it has many security-level integrations, complex architecture, clean code, multiple modules, and more.

Well, the above categories are subjective. So, here, we come up with the approx estimate of the software development cost for different types of software so you can have a clear idea.

Before that, we would like to clarify that prices are based on our region's average software development hourly rates (India, USA) – USD 45 per hour.

The average offshore software development cost and time are generic and as per industry standard. It varies from requirement to requirement.

However, it’s necessary to share your detailed project requirements so that you can get a rough idea about your software development budget.

For example, for what industry or domain you are going to develop an app that will influence the final price as well.

Henceforth, our sales team ask the following question in order to understand the project requirement:

Idea: If you want to develop Medical software, you can explain your concepts to our project managers or consultants. We will help you build an MVP of the product.

Features you want to integrate: During the consultation, you can discuss some vital features that have to be integrated. It’s always good to have a description of every feature – like the patient’s location, the location of healthcare providers, etc.

Wireframes: Our software engineers will give a vision to your mission.

Competitors analysis: The application or software already existing in the market will help you decide what functions you adore and don’t like.

Special requirements: If you have any specific requirements, we can integrate that as well.

“The question – How much does it cost to develop a software program, is something that really irks clients interest who want to build a digital solution. Unfortunately, it’s not easy to share a precise cost estimation. It actually depends on various factors and goals you want to achieve.”

- Pratik Mistry (Executive Vice President, Technology Consulting at Radixweb)

Average Custom Software Development Cost

While talking about small businesses or startups, they often have a limited budget with limited resources to bring innovative ideas to market. Therefore, startups seek cost-effective yet adaptable software solutions to cover the maximum market range.

The custom software development costs can range from $20,000 to $65,000 for simple software with basic functionality and features.

While considering mid-sized projects, they come up with more features and a bit of complexity. Therefore, the range of custom software development for mid-sized projects can range from $60,000 to $140,000.

Enterprise software or large-scale projects include complex integrations, high-security standards, and a need for scalability. That’s why the custom enterprise software development cost can range from $100,000 to $500,000.

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Software Development Cost Breakdown

Generally, we consider this part during the scoping session with our clients. Our technology experts will help you at every step of the development, from project ideation and execution to monetization from software development.

Project Goals

The first and foremost important step to reaching the SaaS development cost is to explain your project objectives during the initial conversation. A clear goal will help us build the software worth the cost and effort. Moreover, it will also help our experienced development team to stay focused and aligned with our needs.

Target Audience

For whom are you developing software?

Besides explaining the project goals, the second step is to understand the target audience. You should know for whom you are choosing app development services in order to build an application.

You will get a clear idea of your end-users once you conduct thorough market research and competition analysis and identify the latest trends.

As we said, the total effort we put in and the time required to identify the target audience will also affect the overall cost of the software.

Software Type

Another important factor that helps you determine the software development time and cost is the software type. The more complicated and feature-rich your software is, the higher its development time and cost.

User Behavior

Visualizing the end-user journey or behavior will give you an insight into software development costs. A roadmap of the customer will help your business determine the overall flow of the development. Eventually, it will share the right vision to build software.

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Software Project Estimation Defined by Team Type

The software development pricing model depends on the development team as well. We are comparing four different types of teams just to give you an idea.

Note: The development cost below may change from time to time and requirement to requirement.

Local Development Team from the US

A local development team means having a software development agency located in your region – country.

This means outsourcing your requirements to the software development outsourcing company from the same location. This is the right option for startups due to being in the same region. However, it’s also noteworthy to consider its cons.

Let’s understand the advantages and disadvantages of hiring a local development company:

Advantages

• The development team and the startup workforce share a similar culture and language.
• It is simpler to prosecute a contract breach when the same legal jurisdiction is involved.

Disadvantages

• Costly for startups in the US, UK, Australia, and Canada.

In-House Development Team

An in-house team works directly from your same premises. Your company hires them and trains them as full-time employees.

The advantages and disadvantages of this hiring model are:

Advantages

• You can directly communicate with your team for updates, modifications, and other development processes.
• The team possesses the required industry experience.

Disadvantages

• Hiring in-house teams for software application development comes with a huge burden –massive hidden costs, including employee benefits, bonuses, taxes, licensed software, recruitment process, employee holidays/leaves, etc.
• Average recruitment cost is around 20 to 25% of the first-year salary.
• Paying for unproductive hours as well.

Freelance Software Developers

The developers work independently based on their contracts for projects.

You need to consider that they are not part of your organization. Hence, there are higher chances of abandoning your project development midway.

Let’s go through the pros and cons of hiring freelance developers.

Advantages

• They are cheap, comparatively.
• You can easily access talented developers across the globe.
• Offer amazing flexibility.

Disadvantages

• They can leave your project abruptly without informing you.
• They might be unprofessional with their approach, work ethics, and process.
• Higher chances of leaking sensitive information about your company to a competitor.

Offshore Software Development Company

An offshore software development company, like Radixweb, located in another country with state-of-the-art infrastructure and industry expertise, will help you develop web and mobile apps tailored to your requirements.

A development partner has a large pool of talented employees – project managers, designers, scrum masters, software engineers, QA engineers, and more. Hence, the project cost of outsourcing software development to a third-party vendor like – offshore software development company, Radixweb, is less expensive than other models.

An offshore software development company offers many advantages over other models and cons.

Advantages

• It’s the most affordable/cost-effective model.
• With a large pool of talented technocrats, they deliver affordable software solutions on time.
• It eliminates recruitment costs.
• They offer flexible software development engagement models.
• They carry a portfolio for various domains and multiple niches.

Disadvantages

• Different time zones and cultures.
• Sometimes, it becomes difficult to communicate due to the language barrier.

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Choose the Best Software Development Pricing Models as Per Your Requirements

Going through the above software development pricing models, you might have found all options appropriate. But still, it may have led you into a dilemma of choosing the right one. But if we give advice based on our experience, an offshore software development company is the right fit for your requirements that will take your vision to the next level, especially for startups.

And for that reason, we would want you to look at our portfolio and reviews, which will help you make a firm decision in partnering with us.

We are also sharing some stats that support our stance:

• 1 out of 5 organizations in the world find it challenging to hire talented employees.
• As per the report from Deloitte, 70% of organizations choose to outsource app development to reduce costs.
• The IT outsourcing market is expected to reach around USD 425.19 billion globally by 2026.
• Over 300,000 software development jobs are outsourced out of the US per year.

The following stats will help you realize that India is the right choice to pick the best software development company in India when it comes to cost-effective solutions and on-time delivery.

• India is the largest home of developers.
• The Economic Times of India states that India currently has around 5.8 million developers

In a nutshell, we can conclude that it’s always better to find a top-notch custom software development company in India in order to reduce the software development cost. And India is the only country that offers lower rates than others. Hence, the cost of outsourcing software development in India will be pocket-friendly and let you choose your own software outsourcing business models as per requirements.

Now that you are clear about various options, let’s analyze the factors affecting software pricing and capitalize on software development costs.

Factors Affecting Software Pricing

We know what you are thinking now. Let me guess.

Umm! You might be thinking about the significant factors that influence the final software development cost estimate.

Though, we have shared a basic overview of this topic, like project type and company size.

But let’s understand each in detail now.

1) Software Type

When our sales teams receive requirements from our clients, we generally ask them about the software type they want to choose. And with this software type, we tend to break them down into the following details:

• New Software Development: A creation of new software from scratch tailored to your requirements.
• Software Modernization or Modification: Our experienced developers modernize or upgrade your existing software using modern tools.
• Software Integration: We integrate new ready-made software modules or packages into existing business processes.
• Web Development: We help you build a new custom website or web application.

At last, each software development type has different software development teams. And that requires additional software development time estimation and efforts as well. Henceforth, the final software development budget will also be different.

2) Software Complexity

It’s surprising to hear that the cost of software development is correlated with software complexity. Well, it covers several parameters, like the number of screens, customization level, complexity of features, number of features, etc.

Thus, the more features you add to your software, the more complex it becomes.

To give you a clear idea, we have come up with a real example.

Suppose you are planning to develop an enterprise application that has a signup screen. So now, if you want your users to sign up via email id or mobile number, it will require around 20 hours of development.

That’s more!

What if you want your users to signup using their social media platforms or other accounts? This becomes a bit complex as compared to the previous option. And this signup requires extra development hours (20 hours extra). Besides, it offers an easy user experience as well.

In short, more features will increase your app complexity, which will also cost you more.

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3) The Average Cost of Software Development by Size

Another factor that affects the software development cost is the size of the project. Developers will have to work endlessly and tirelessly if there’s a demand for a large-scale project. There are usually 4 levels of projects.

Small-sized Development

Average software development cost for small-sized or startups: $10,000 to $60,000

Startups always have a limited budget to execute their ideas. Hence, they seek cost-effective yet adaptable solutions. Custom software development expenses can range from $10,000 to $60,000.

A few minor modifications or changes are usually part of the small-sized software development. Actually, bug fixing, maintenance, and support come under the category of small software development.

It requires less interaction with clients.

Medium-sized Development

Average software development cost for medium-sized companies: $30,000 to $100,000

Mid-sized companies often require complex and feature-rich software solutions compared to startups. The average software development cost can range between $30,000 to $100,000 for a basic app, depending on various factors such as functionality, design, and additional requirements.

While considering medium-sized development, the projects are more substantial than just minor updates. It has a tangible result and well-defined scope of deliverables. In this category, projects like simple mobile applications require enhancement of web interfaces or upgradation of UI/UX interfaces.

The medium-sized project category is a stand-alone solution that deals with a single source of data.

Large-sized Development

Average software development cost for large-sized companies: $80,000 to $125,000

Large-sized or enterprise software entails complex integrations, stringent security protocols, and scalability requirements, contributing to higher software development costs. The estimated software development cost ranges from $80,000 to $125,000 for basic software meeting these standards.

As we know, large-size development requires in-depth research and expertise to handle app complexity. Hence, large-size software development may require integration with a broad database, integration with multiple systems, security features, and login modules. Moreover, it will also ask you to go under maintenance challenges.

On the other hand, large-scale software development involves multi-platform application development (web, iOS, Android) with numerous modules.

Enterprise-sized Development

Enterprise-sized development consists of the most extensive and complex project level with robust security and reliability requirements. The projects which fall under this category are built on underlying frameworks.

The enterprise-size projects have more rigorous logging, higher security, and better error handling. For example, you can consider the application of Uber. Such types of applications work seamlessly across any platform. Furthermore, these applications have many modules to integrate and impose strict security around personal data.

The cost range would be from $100,000 – $200,000, based on the type of software you want to develop.

It becomes easier for us to calculate software development costs after getting a clear idea about the types of software you require. Software development expenses can be based on the development efforts we put in and the time we require for execution.

Software Cost Estimation based on Technical Complexity

4) UI/UX Design

The user experience is not something easy as you think. Since User Interface (UI) and User Experience (UX) leave their first impression on users, they become vital to estimate software development costs.

The actual part of UI/UX design is to grab the attention of users and engage them with better design and functionality. Ultimately, UI/UX design development requires a lot of time, depending on the website type and complexity.

5) Development Team Size

Once you are clear with the software development type and size, the next factor that affects the cost of software development is your development team size. Usually, the development team size has at least three experts from different fields – a developer, a project manager, and a QA tester.

However, these three roles can be expanded depending on the project’s needs and scope of work. The hourly rate of developers will vary based on the geographical location of the software development team. Hence, according to project type and size, you can choose roles from the following:

• Developer (Front-end and back-end)
• UI/UX Designer
• QA Tester
• Project Manager
• Software Architect
• Database Expert
• Business Analyst

Let us share the hourly rates of developers based on the different regions:

Numerous factors might affect the software development budget are:

• Technologies and tools used
• Number of platforms
• Post-maintenance cost
• Software development team level (experience)

“Every team member from Radixweb who works closely with clients is involved in software cost time estimation and budgeting.”

- Dhaval Dave (VP of Operations and Delivery, Radixweb)

6) Platform

The platform you choose for software development also influences cost estimation.

For example, if you are planning to build a like Uber or Clubhouse, you must consider primary platforms like iOS, Android, or Windows.

The renowned applications you see on the Internet support multiplatform operating systems, third-party app integrations, and database middleware.

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Hidden Custom Software Development Costs

While considering the cost of developing software, there are some hidden costs associated with it, which are not typically calculated initially. In fact, these hidden costs in software development refer to expenses or fees, including marketing, maintenance, and support.

Marketing

Marketing costs are considered when you want to promote your custom software to a specific audience.

The hidden cost – marketing costs include:

• Social media marketing
• Participation in industry events
• Off-site and on-site search engine optimization
• Content sales funnels
• PRs
• Email marketing
• Marketing team expenses

Maintenance and Support

Support and maintenance costs could arise for your seamless software functionality and operation. Maintenance costs include upgrading software, fixing security vulnerabilities and software bugs, providing technical support, and adjusting to new technologies or requirements. Resources, time, and even the involvement of third-party assistance providers are required.

Software Development Cost Estimation at Radixweb

Radixweb is a renowned custom software development company with more than two decades of experience and a rich portfolio from multiple domains. Therefore, we believe, with our great expertise and knowledge, we can help you get an accurate cost of software development. However, you need to have some basic understanding before calculating the development cost estimation.

If you still find yourself lost, we are offering you a simple cost estimation template. Let’s go through it.

Here, you should consider four major components of any software development project to determine the cost. Each factor is crucial to make your project successful.

Based on our industry experience, we offer a rough idea of software development costs.

Total Software Development Cost = 65% of Development + 15% of Project Management + 13% of Quality Assurance + 7% of UI/UX Design

Process We Follow for Software Cost Estimation

At Radixweb, we follow the right approach to optimize the software development workflow and have clear communication with clients. That’s the reason our process is followed by four steps that give you an accurate estimation of custom software development costs.

Step 1: Free Consultation Call

Once we receive requirements from your side, we will give you a free consultation call where we introduce ourselves and understand basic details about your project ideas. If you find us more promising and wish to proceed further, we can plan another meeting and get you the software development quotation.

Step 2: Project Analysis

In the second step, we get in-depth with you where we ask for more details which are necessary for calculating software development costs. We will expect to hear everything in detail – your app ideas, business strategies, objectives, features list, personal preferences, technical specifications, planned release date, etc. We analyze your project requirements to prepare the final cost of software development.

Step 3: Quote Preparation

Whatever information we fetch from you will help us finalize the software costing estimation. We will share the accurate software development cost and time with you.

Step 4: Deal Closing

Finally, you know how much does your software development costs. So, you have the time to choose a suitable engagement model (or ask us to help you with that as well), which can take you one step closer to the project's success.

Tips to Reduce Software Development Time Estimation and Costs

If you find the software development cost we have shared is unrealistic, we will give you some tips to minimize it.

Tip 1: Partner with an End-to-End Offshore Software Development Company

When you join hands with an offshore software development company like Radixweb, we will help you test your idea's viability and provide in-depth insight.

In addition, we will give you a pool of experienced technocrats at affordable rates. For example, offshore software development rates in India will always be more reasonable than the cost in the US.

Tip 2: Prioritize Discovery Phase

You can explore the business model throughout your software product discovery phase, also known as the research stage. You also get time to assess the cost implications and understand technical requirements.

This decreases the software development time and costs to develop features and functionalities.

Tip 3: MVP

MVP is the right approach we follow to build the product to understand the user’s behavior, identify bugs, the business model’s visibility, and the acceptability of the idea in the market. Moreover, it will give you real-time user feedback, so you can modify functionalities and deliver the required solutions based on it.

Tip 4: Hire Dedicated Developers

If you are planning to choose an in-house option, it’s best to hire dedicated developers from Radixweb – an offshore software development partner. We will give you a team of experienced professionals at an affordable cost.

So, if you are wondering how to estimate software development cost and determine it, we hope we have answered all your questions.

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Calculating Software Development Costs at RadixwebWant to calculate the software development cost of your project ideas? Connect with our sales representatives.We are a full-service custom software and app development company with thousands of portfolios from different domains as proof. We will deliver a scalable and feature-rich solution that meets your business objectives in a given time and budget.Well, you can check our page on Clutch, DesignRush, our portfolio, and many case studies.What are you waiting for? Connect with us today.Note: The stats and development costs mentioned in this detailed post are based on industry standards. However, it gives you just a rough idea. And there are several factors that influence the software development cost. To get a final quote for your project, you may connect with our experts.