Understanding the cost of software development for a project is a crucial aspect for businesses of all sizes, be it small and medium-sized enterprises (SMEs) or large corporations. The scale and scope of the business significantly influence the budget for software development.
To make sense of this, we can look at businesses in three distinct categories: startups, SMEs, and large enterprises. Each of these segments faces unique software project costs based on their specific requirements. These include the number of features needed, the complexity of those features, scalability considerations, and other unique attributes.
In this article, we will be simplifying the cost structure of software development, offering a clear perspective on the potential expenses involved in developing small, medium, or large-scale applications.
Startups
For startups, newly established and launching products, developing a custom solution from the outset can be highly advantageous. Tailoring a solution specifically to your business and audience needs can prevent reputational damage.
Generic, off-the-shelf tools might lack crucial features your industry needs, potentially deterring early clients. Conversely, even a modestly successful app can build a user base and provide a significant promotional lift to elevate your idea.
For startups, the initial version of an app is often a Minimum Viable Product (MVP), encompassing just the essential features. Such an app can be developed in about 2 months or 800 hours (total time for a team including a Project Manager, QA, Designer, Backend, and Mobile developers).
The cost of this development will vary based on your region’s average rates, but typically ranges between $30,000 and $45,000.
SMEs
For Small and Medium-sized Enterprises (SMEs) aiming to elevate their business, investing in custom software to automate daily operations and optimize internal processes is a strategic move.
Moreover, as these businesses grow, they increasingly require scalable software solutions tailored to small businesses, ensuring no compromise on security, speed, performance, and other critical aspects.
For a medium-sized application, the average development timeframe is about 4-6 months or 2000 hours, considering a team comprising Project Managers, QA specialists, Designers, Backend, and Mobile developers.
Using an estimated average rate of $50 per hour, similar to the previous example, the software development costs for such an app would range between $70,000 and $100,000.
Large Enterprises
Large corporations, handling millions of operations and employing thousands of employees, have distinct needs for internal applications. These enterprises require comprehensive custom tools to efficiently manage their extensive daily tasks.
Due to their size and scope, they also face heightened security risks, making them attractive targets for cyberattacks. Custom solutions designed for such corporations focus on robust asset and data protection to prevent significant security breaches.
Additionally, these software solutions must comply with data protection regulations like GDPR to ensure seamless and legal operations.
At an estimated rate of $50 per hour, the development of large-scale applications for such corporations can take over 6 months. The cost for these projects typically starts at $100,000 and can exceed $500,000, reflecting the complexity and scale of the solutions required.
4 Strategies to Lower Software Development Costs
At Sombra, their mission is to create impactful products while ensuring the process remains clear and approachable. Having completed over 150 projects, we’ve learned that a structured approach to software development can be straightforward and not overwhelming.
Indeed, there are several methods to decrease the overall software development costs. Here, I’ll outline 4 practical strategies to reduce your project’s software development expenses. By adopting these approaches, you can make your development process more economical and efficient.
#1: Open-Source Software
Opt for open-source software components and libraries to decrease software development expenses. These open-source options often come with solid functionality, reliable security, and active community backing, all without the burden of licensing fees.
The team at Sombra always stays aware of the licensing demands and maintains adherence to any open-source licenses. Because of this, we leverage software modernization services to make sure all things are right and on point.
#2: Limit Third-Party Integrations
While integrations can enhance a software project, it’s vital to weigh their development costs and possible complexities. In integrations, we focus on ensuring they enhance the core features and bring tangible benefits to the end product.
For instance, in a mental health app development at Sombra, utilizing an existing chat service rather than crafting a custom one proved to be a time and cost saver.
Similarly, for fintech applications, we often integrate with reputable platforms like Stripe or PayPal instead of developing own payment systems, achieving secure, efficient payment solutions without the high cost of custom development.
However, multiple API integrations can escalate costs and affect the overall app architecture. Sometimes, managing these integrations might require a specialist, potentially increasing development costs.
#3: Apply Agile Project Management
Agile methodologies, like Scrum, are incredibly beneficial. They allow us to segment your project into smaller tasks, known as sprints, making the project more manageable.
The use of Agile at Sombra is significant because of its iterative nature. This means frequent feedback, adaptability, and re-prioritization as necessary. By working in these concise cycles, we greatly reduce the risk of expensive rework, keeping the focus on delivering high-value features.
#4: Streamline Design
A simple and clean design approach can greatly reduce development complexity, thereby lowering software development costs. We’ve had instances where simplifying the user interface and eliminating superfluous features reduced both development time and cost.
Simplifying the design or app features at a certain development stage allows for a quicker launch. Post-launch, the app can be refined and enhanced. This interactive development approach is key.