“Can we get a price to develop this?” … is a pretty standard question asked by prospective clients during our first conversation.
Providing a fixed price for custom software is not possible without a detailed discovery process. BUT, we can provide estimates.
It is clear to me that more education about the true cost of custom software is desperately needed. Which is why I’m writing this post. It will give your organization a rough idea of how much to budget, set an accurate expectation and reduce “sticker shock”.
The Sample Data
What I am presenting is pricing information from 11 different mobile app development firms in the United States. They range in size from small (less than 15 employees) to large (51 to 200 employees).
Like Big Fish, these companies create custom mobile apps; and like Big Fish, their websites don’t have a price list, because they don’t sell boxed software.
In a reasonable amount of time we were able to find 11 mobile app development firms in the United States that post cost estimates on their website. We classified them as small, medium or large – based on their number of employees.
- Small (generally less than 15 employees) – 3 in our sample
- Medium (15 – 50 employees) – 5 in our sample
- Large (51 -200 employees) – 3 in our sample
Is Your App Basic, Full-Featured or Complex?
Next we created three categories for mobile app projects, based on their level of complexity. These categories were created based on the estimates given by the 11 agencies, and the categories and descriptions they used.
- Basic (does a couple things well/prototype)
- Moderate (full featured, more robust app, or version one of a complex project)
- Complex (complex, multi-phase project; enterprise level)
The Reality Check.
Surely our app is basic?
I doubt it.
Apps in the “basic” category are not as common as you may think. They do a few things well, but are not full-featured or comprehensive.
We see them used by companies who need an app to do something very specific, but not a lot of things. Sometimes prototypes, and version one of a full-featured app, fall in this category.
How Much to Budget for Your App
No surprise to us, the estimates for basic, moderate and complex projects provided on app development agency websites are quite similar among similarly sized agencies. This group of companies wasn’t cherry-picked.
Small Agency (less than 15 employees)
Basic: $15,000 – $35,000
Moderate: $30,000 – $100,000
Medium Agency (15 – 50 employees)
Basic: $50,000 – $80,000+
Moderate: $150,000 – $400,000+
Complex: $250,000 – $750,000+
Large Agency (50 – 200 employees)
Starting at: $100,000+ (often $500,000 – $1,000,000)
When it comes to the large app development agencies you’ll be hard pressed to find a fit for a basic app that isn’t a prototype. The large agencies we looked at estimated $100,000 and up for a version one full-featured app.
Don’t Forget Ongoing Costs
It would be a mistake to think that the costs of custom software are limited to only the initial price of design and development. Your organization should also include a budget for ongoing maintenance, updates and hosting (if applicable).
As an example, each time the operating system on which your app was developed receives an update (such as iOS 8 to iOS 9) your app will need to be tested on that new operating system to ensure it still works.
It is not at all uncommon for certain features to simply stop working when your users update their phone to the latest and greatest version of Android or iOS.
Ongoing maintenance also includes security patches, UI updates to accommodate new screen sizes (think iPhone 5 vs iPhone 6), feature enhancements and so on. If the app relies on data, or a web service, hosted on your corporate servers, any changes to those back end systems will necessitate testing and updating the app as well.
According to FierceWireless.com, “the industry norm for software maintenance is about 15 to 20 percent of the original development costs. So if your app cost $100,000 to build, roundly estimate to pay about $20,000 per year to maintain the app“.