Software Development Cost: A Guide for Beginners

The term – software development is a lot more than what user knows about it. The development itself is a tricky session where all developers, coders, and testers are involved to give a shape to an idea.

Most software development companies follow a pattern which starts from learning about the clients’ or business requirements and ends with providing support and maintenance to the final product for a specified amount of time.

In between the planning, developing and delivering, there’s an important stage which any business and software development company cannot take for granted. That is the stage of cost estimation of software development.

It starts with the negotiation stage and both involved parties final down a number that suits them. This is important as cost defines the shape of the entire project. The more the cost, the higher the chances of software laden with high-end rich features and functionalities and vice versa.

Software Development Cost

Before moving forward, let’s see why cost estimation is required at an early stage of the software development discussion.

  • Cost defines the features and functionalities list of the software project
  • It supports developers to prioritize the tasks of development
  • Detailed understanding of the impact of variation on development due to unexpected market changes
  • Plan and implement necessary needs and requirements in the project
  • Cost comparison support for customers

While there are more to prove the need for cost estimation, we shall take you ahead with more details. For startups and beginners, it’s a very crucial part to get over with.

Software Development Cost: Main Components

Since working with beginners has always been a risky business, there are still chances that the turnout of the output is beyond expected. This can only be achieved if the startups or beginners tend to take advantage of cost estimation into their operations.

Let’s mellow it down a bit for all the beginners and startups out there and bring a clear picture of what and how to consider notes in software development cost estimation. Let’s begin.

1. Developers Cost

One of the major aspects which can be used to estimate the software development cost is Developers Cost. In the development phase, there would be many developers who would be working on the software project.

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The developers assigned can be skilled, experienced or beginner. According to the skill set of the developer, the cost can be adjusted. The more skilled and experienced need of developer would entice higher price and vice versa.

In case the project is big and important, a business may want to have skilled developers which would automatically elevate the cost of the overall software development. In such a case, outsourcing software development companies is a much cheaper option because of low wages per hour in developing countries.

2. Product Complexity

Most software development projects are well understood by the team involved to work on it. Balanced understanding is a must when it comes to development so that client’s expectations can be met at the time of delivery.

However, there is a time when the project is quite complex and could require more than what was planned for the project. Product complexity has a wide impact on the cost of software development and thus needs to be discussed before finalizing the cost of the software.

Complexity can impact the cost in multiple ways:

  • Limit or increase the number of personnel working on the project
  • Overall productivity gets hampered
  • Delivery timelines may get altered
  • A complex project may demand specialists

3. Project Development Duration

Another aspect which estimates the cost of the software development project is the duration of the project running in the software development companies.

The duration is important since it decides the delivery of the project to the clients and helps them plan the launch of the software application to the final audience. If the duration of development exceeds the decided timelines, the cost is sure to shoot up.

This usually happens in software development as the development is no simple task and may take more time than expected. However, both parties acknowledge such scenarios and work without charging anything extra.

But in cases when there are multiple modifications in the software during the development requested by clients, then software development company may charge for all the modifications made in the project.

4. Technology, Trends & Language

While most software development companies work on similar technology, language, and platforms, there might be demand from clients to build the project in some new or latest technology that is still new to the development company.

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This automatically highlights the rise in the costing as new and advanced technologies require skilled developers who are aware of such trends and are comfortable working on it. They come at a higher price and impacts the overall cost of software development.

5. Hiring Cost Depending Upon Region

Now a days the cost of developing a software also increases or decreases depending upon the region. There are some regions where the cost of development is much less than other regions or countries. US and Australia top the chart as regions having the highest developer hiring cost whereas countries in Asia would charge much less for similar services.


To sum up the entire blog, the cost of software development is an essential part of the overall development stage as it is important for both parties. It has to be mutually agreed and divided on. Many software development companies outsource their project as it is a cheaper option for them.

However, it has its challenges. The best way to meet at a center point is to decide on the requirements and place the estimation as per the required demands. The right development is based on the right team which doesn’t come for free!

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