Businesses in various sectors are increasingly spending on custom software in an attempt to fulfill special operational requirements, enhance customer experiences, and establish a competitive advantage. Nevertheless, the most frequently asked question is: What is the cost of custom software development? The software development cost averages around $20,000 to $250,000+, depending on the complexity and the features, tech stack, and the location of the developers. The basic app or in-house tool will cost approximately $20, 000 – $50,000, and medium complexity software will cost $60,000 – $120,000.
The market size of global custom software development is projected to hit $53.02 billion in 2025 and reach up to $334.5 billion in 2034 at a CAGR of 22.7%. This guide discusses the different aspects that can affect the custom software development cost and gives you an idea of how you can streamline the cost without reducing quality. As a startup or an enterprise, knowing these aspects is essential to make smart budgeting decisions and develop value-based software.
Global digitization, shifting client expectations, and fast technological changes are factors that affect the software development cost in 2025. Due to the new trends such as the integration of AI, low-code platforms, and cloud-native development, software development pricing 2025 model is becoming more dynamic and value-driven. 70% of new business applications will be based on low-code/no-code platforms. It is estimated that enterprise software spending will reach $1.25 trillion in 2025 and increase by 14.2% annually. Moreover, 90% of the companies will focus on cloud-based development and DevOps in their projects.
Custom software development refers to the designing, building, deployment and maintenance of software that is specifically designed to fulfil the unique needs of a business or organization. As opposed to the ready-made solutions that address the needs of a wide audience, custom software is designed and created to resolve a particular issue, streamline internal processes, or personalize user experience.
It requires a close coordination of stakeholders and developers to specify features, architecture and user flows. Compared to CRMs, ERPs, eCommerce tools and mobile apps, custom solutions are more flexible, scalable, and secure. Although the average cost of software development for startups might appear to be generally higher at the initial stages, it promises to provide better returns in the long-term due to improved efficiencies and usability.
The process of estimating the software development cost is not a one-size-fits-all approach. A number of factors determine the amount of money that will be invested to turn your custom software idea into a reality.
The kind of software, whether an internal enterprise solution, SaaS platform or mobile app, directly affects the total software development cost. The more intricate the software is, the more advanced the features are needed: AI, real-time data processing, or multi-user roles, which demands more hours of work and budget. A basic task management application can be much cheaper than a CRM that has built-in analytics and third-party APIs. To estimate cost, businesses often use the formula: Cost = Development Hours × Hourly Rate × Complexity Factor.
The quality and depth of the UI/UX design has a great impact on the cost to develop software. Complex designs relying on user experience, animation, transitions or bespoke illustration take additional time and dedicated skill. This is particularly the case in industries such as fintech or healthcare, where readability and accessibility are essential. The upfront investment into the quality UI/UX increases user retention and minimizes rework after the launch.
Selection of an appropriate technology stack has an effect on performance as well as custom software cost estimate. Niche or newer technologies might be more scalable or functional, but they are costly because of a limited supply of developers. As an example, blockchain or machine learning executions involve specialists, which raises the hourly cost. On the other hand, frameworks such as React or Node.js are more popular, provide a quicker development workflow, and are economical. The inappropriate technology selection may cause rebuilds in the future, which increases the cost of building software over a period.
The overall software development pricing 2025 is severely affected by the size, experience, and location of the development team. Bringing on board a senior developer may increase your hourly rate, but will result in quicker delivery and fewer errors. On the other hand, less experienced developers can be affordable in the short term, but usually cause delays. Regardless of whether you choose a freelance team, in-house employees, or a custom software development company, labor costs are up to 60-70% of the total project cost.
Security is no longer optional; at least not in apps dealing with personal information, payments or sensitive business insights. The inclusion of security measures such as end-to-end encryption, multi-factor authentication and adherence to compliance frameworks increases the cost of software development services. However, failing to pay attention to these features may result in breaches, lawsuits, and increased post-launch expenses. A secure system will also entail code auditing, penetration testing and third-party security tools, which will add to the overall software development cost.
Regardless of whether you are going to target Android, iOS, desktop, or all three, the platform choice can be a significant factor in the custom software development cost. A cross-platform app will be more expensive than a single-platform one. In the case you require native performance and features in your app, you might find it necessary to create two versions of your app, one for each platform. This in effect doubles your development time.
A key factor in the software development cost analysis is geographic location. As an example, North American or Western European developers would normally cost between $75 and $150/hour, but a team in India or Eastern Europe might cost between $20 and $50/hour. This software developer per hour cost does not always imply low quality, offshore teams are sometimes able to provide very good work at a fraction of the cost. The secret is to have a reliable partner. Such a regional price disparity explains why most businesses prefer offshore software development to streamline their budgets.
Various platforms are associated with distinct needs that influence timeline and software development cost. Web apps usually require responsive design and compatibility with browsers, whereas mobile apps require platform-specific code development with Android and iOS. Desktop applications might require platform-specific integrations. By knowing your users’ most preferred platform, it will assist you in utilizing your resources well without unnecessary spending in the cost of developing custom software.
Knowing how your money is spent when undertaking a software project is essential in planning and ensuring that you do not overrun your budget. Every stage of the development lifecycle has a specific purpose, problems, and expenses. The following is a software development cost breakdown and how the budget usually flows throughout the major phases of a project.
This first step entails getting an idea of business objectives, technical specifications and project scope. It involves interviewing stakeholders, conducting market research, and preparing a software requirement specification (SRS). This will help to detect possible risks in advance, set schedules, and make proper budgeting.
In this phase, designers make wireframes, mockups, and clickable prototypes according to the user journey. It is all about providing intuitive user interfaces and significant user experiences. Effective UI/UX design increases interaction, decreases churn, and guarantees easy interaction. This stage also involves usability testing and refinement to the final approval of the design, ensuring the visual comprehensibility and functionality.
Frontend development turns accepted designs into interactive interfaces with the help of HTML, CSS, JavaScript, and frameworks such as React or Angular. This step makes the software responsive, cross-browser compatible and easy to interact with. Designers add graphical elements, animations and client-side code that communicates with the backend.
This is the engine room of your software. Backend development encompasses API development, business logic and database management systems. Server-side code is written by developers and is used to drive user requests and guarantee data integrity, performance, and security. Here, technologies such as Node.js, Django or .NET are frequently applied. As this component deals with authentication, data processing, and integrations, it occupies a substantial part of the overall budget.
QA makes the software bug-free, safe, and performance compliant. This phase entails functional, usability, compatibility and load-testing, both manual and automated. Regression and UAT (User Acceptance Testing) are also done to test the product under real life conditions. Early detection and correction of problems saves money and time in the post-launch maintenance.
Deployment encompasses the process of preparing the production environment and rolling out the application to either the general population or to an internal user base. This procedure includes the installation of hosting servers, domain configuration, and seamless database migrations. It also entails the incorporation of DevOps procedures such as CI/CD pipelines to facilitate continuous delivery. Deployment should be closely followed to prevent downtimes or poor performance upon launch.
After launch, software requires ongoing updates, bug fixes, security fixes and performance optimizations. Maintenance keeps the software up-to-date in terms of new versions of the operating system, frameworks, and user demands. It can also involve the provision of new features or responding to user feedback. Maintenance is a recurring expense that is essential in making the software stable, scalable, and relevant in the long-term.
| Development Phase | % of Total Cost | Estimated Cost (for $100,000 Project) |
|---|---|---|
| Discovery & Planning | 5% – 10% | $5,000 – $10,000 |
| UI/UX Design & Prototyping | 10% – 15% | $10,000 – $15,000 |
| Frontend Development | 15% – 25% | $15,000 – $25,000 |
| Backend Development | 20% – 30% | $20,000 – $30,000 |
| Testing & Quality Assurance (QA) | 10% – 15% | $10,000 – $15,000 |
| Deployment | 5% | $5,000 |
| Maintenance & Support (Ongoing) | 15% – 20% | $15,000 – $20,000 annually |
When evaluating the software development cost, comparing the price is not enough, but also the value. Arka Softwares has an advantage over the competitors because of its combination of affordability, quality, and long-term support.
Arka softwares has a completely transparent pricing structure where clients get breakdown of costs before development commences. This avoids any unforeseen expenses and surprises in the project. Conversely, other software companies have hidden charges that are termed as miscellaneous expenses and this tends to increase the overall software development cost.
While other development companies may command higher prices for senior developers, Arka is able to provide high-quality coding and architecture at reasonable prices due to experienced teams. This balanced way of doing things enables clients to receive high-level development at an affordable software development cost. Other firms can impose more costs without corresponding upgrades in the quality of code, documentation, or delivery schedules.
Arka adheres to an MVP-first approach, which allows clients to release essential functions within the shortest time at the most reasonable cost. This will help avoid wastage of resources on unwarranted features during the initial phases. Most agencies develop full-scale applications initially, which increases the cost to develop software without addressing market requirements.
In contrast to most companies, who end their support once the delivery is done, Arka Softwares offers long-term maintenance and updates support through their software development pricing 2025 strategy. This minimizes the long-term software maintenance cost to the client, and guarantees the security and scalability of the software.
Having a distributed team with offices in different time zones, Arka Softwares brings together offshore rates and localized project management. Clients get the advantage of working in real-time and the benefits of quick delivery without the high hourly rates that are common with western agencies. This hybrid model will ensure that your custom software development cost is low without quality and communication being affected.
Managing your software development cost is not simply about trimming expenses, but it is about making wiser investments at each phase. With the best practices and time-tested strategies, you will be able to minimize expense, speed up delivery, and maximize your budget.
Rather than creating the complete product, start with Minimum Viable Product (MVP). This approach helps businesses in testing major functionality, getting feedback from users early and prototyping quickly. Agile development is flexible and makes changes faster, minimizing rework and optimizing budget. Emphasizing on only necessary features initially; you reduce the software development cost in the beginning and accelerate the time to market.
The choice of modern, scalable and well-supported technologies eliminates rewriting or incompatibility problems. By not using niche or outdated technology, you minimize future maintenance costs and can hire dedicated developers more easily. Performance of your software can also be enhanced with the right stack, becoming more cost-effective to maintain. Future-proof tech stack assists in managing your software development cost estimation and minimizes technical debt.
Effective project management will keep the timelines, budgets and deliverables on track. Agile tools such as Jira, Asana, or Trello enable teams to cooperate, prioritize and prevent delays. Well-defined milestones and frequent check-ins will enable you to notice the scope creep early enough and minimize unnecessary changes. Under proper management, projects will have higher chances of achieving their objectives without increasing your custom software development cost.
Collaboration with a professional and qualified development team enhances the quality of the code, minimizes the chances of making errors, and accelerates delivery. Although more experienced developers might have a higher initial cost, they do not require as much management and can work more quickly. This saves on long-term expenses and rework. To get maximum value out of investment, seek an expert custom software development company that has a track record in your field.
Not every feature has to be ready at launch. Pay attention to the ones that have a direct influence on your business objectives or user experience. Effective prioritizing can be done by using the MoSCoW (Must-have, Should-have, Could-have, Won’t-have) technique. Also, by avoiding unnecessary complexity, you can drastically cut the number of development hours and manage the cost of building software, particularly during initial phases.
Hiring a blend of in-house and outsourced developers can balance quality and cost. Nearshore or offshore outsourcing lowers the custom software development hourly rate 2025 without compromising on the decision-making processes. The hybrid models are especially useful when you require time zone or skill set flexibility. Outsourcing is one of the best means to achieve affordable software development cost without affecting the deliverables.
When budgeting a software project, most companies only consider the initial development costs. Nonetheless, some costs are quite deceptive and they can really drain your total investment before you know it.
Once the software has been released, it needs to be continuously updated to eliminate bugs, increase performance, and ensure compatibility with new technologies or operating systems. The routine maintenance can also cover security patches and improvements requested by users. The cost is around 15-20% of the total development budget, and it has to be spent each year to sustain the software and be competitive.
Deploying your software in cloud environments such as AWS, Azure, or Google Cloud incurs recurrent expenses. These are subject to storage requirements, bandwidth consumption and server availability. Also, scaling to take care of peak traffic or world usage can cost you a lot of money per month. These infrastructure costs must be factored in advance to avoid surprises after deployment.
There are numerous third-party services integrated into software, including payment gateways, SMS providers, or analytics tools. These services have usage-based pricing or subscription. Failure to consider these charges in planning may lead to unforeseen monthly bills. These charges can be managed as time goes on by selecting APIs that are scalable and less expensive.
In order to meet compliance regulations such as GDPR, HIPAA, or PCI DSS, additional development and legal advice are required in many cases. The use of encryption, data protection protocols and consent management functionalities add on to the initial cost. Besides, the risk of non-compliance may be associated with significant fines, which makes these investments essential as opposed to optional.
Data migration is required when updating legacy systems, or when merging platforms. The processing of a large amount of structured and unstructured data, its cleaning, and compatibility with the new system is time-consuming and expensive. Also, it may be necessary to integrate with existing CRMs, ERPs, or custom tools which may involve connectors, adding both development labor and cost.
Arka Softwares follows a transparent and structured cost estimation model. Clients receive a detailed project breakdown, outlining hours, phases, and associated expenses. This clarity helps businesses avoid surprises, understand value for money, and plan budgets efficiently. With Arka, you always know what you’re paying for—ensuring better control over your software development cost from day one.
By blending experienced global talent with cost-effective offshore resources, Arka ensures top-tier delivery without inflated pricing. This strategic approach allows clients to leverage premium skill sets while reducing hourly development rates. As a result, your custom software development cost becomes more manageable without compromising quality or innovation.
Arka encourages Agile methodologies and MVP development models, allowing clients to launch faster with lower initial investments. This phased rollout helps validate product-market fit early on and allocate budgets more effectively. It’s a smart way to keep the cost of developing custom software under control while delivering continuous value and enhancements.
In addition to development, Arka provides lifelong support, upgrades, and monitoring of performance. Their proactive software maintenance for business maximizes the uptime and minimizes the long-term maintenance costs. This full-service model of the lifecycle protects your investment and guarantees that your software development cost will yield recurring ROI.
Arka deploys special project managers and modern collaboration solutions such as Jira, Slack, and Trello to update the stakeholders in real-time. This organized communication minimizes misalignment and rework, which are two key causes of blown development budgets. A good project visibility can be used to streamline team output and software development cost estimation at all levels.
Arka has a wide range of portfolio, including healthcare, fintech, eCommerce, and logistics, with dedicated domain expertise that reduces delivery time and shortens the research process. Their strategies that align to the industry contribute to less trial-and-error development, and therefore quicker and efficient builds. This real-time experience enables businesses to reduce the cost of software development services and maximize it.
Estimating the software development cost accurately is essential for budgeting and long-term success. Every choice you make, whether it is what and how much your project will entail, what platform to use and what team to hire, all choices affect your overall price. Implementing intelligent strategies such as MVP model and open planning, companies will be able to manage costs and mitigate risk more efficiently. Engaging a competent partner like Arka Softwares will guarantee quality at affordable software development cost.
Outsourcing is often more cost-effective, especially with offshore software development, as you avoid hiring, onboarding, and long-term overhead costs.
The software development cost for startups typically ranges from $30,000 to $120,000, depending on MVP requirements, timelines, and functionality.
Complex and custom UI/UX design can increase design costs by up to 15–25% of the total budget.
The custom software development hourly rate in 2025 ranges between $30 to $150/hour, depending on region, team experience, and project complexity.
Jeeto11
The app quickly earned over 1,000 downloads within two months of launch, and users have responded positively. ARKA Softwares boasted experienced resources who were happy to share their knowledge with the internal team.
Archithrones
While the development is ongoing, the client is pleased with the work thus far, which has met expectations. ARKA Softwares puts the needs of the client first, remaining open to feedback on their work. Their team is adaptable, responsive, and hard-working.
Service Provider
I started my project with Arka Softwares because it is a reputed company. And when I started working with them for my project, I found out that they have everything essential for my work. The app is still under development and but quite confident and it will turn out to be the best.
