How To Estimate the Cost of Software Development in 2022?

When it comes to developing software for either a company or an individual, questions like ”How much will this cost” and ”How much time will this take?” are inevitable. One of the most important things that a project depends on is the cost of software development.

It’s only natural for the clients to wonder whether they can afford software development and if it will be done within the desired timeframe. Most of the sales meetings will revolve around this question. However, many clients often don’t realize how many different factors impact the cost of software development because the highly complex estimate process is not transparent to them.

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Still, when it comes to everything you need to know about software development in 2022 and all things related to making a good estimate, it’s easy to get lost in a sea of information. That’s why we decided to try to explain and help you understand this process better. The points we present to you will clarify the difference between Time and Effort and show you additional factors used to come up with a valid software development project estimate.

Average Cost of Software Development

If you are a start-up owner, having a precise estimate of the software development cost can help you plan your budget better. However, if you don’t have a detailed discussion with an IT company about the costs, all you’re going to get are vague answers.

This happens because more than just one factor determines the cost of the software. An app that requires only backend processing is much cheaper than one that’s connected to external systems and involves financial transactions. Still, a project’s complexity level is only one factor.

Other vital factors are the technology and people-hour required to build the software. The consensus online is that software development can cost anywhere from $50,000 to $250,000. If the app can be built in under 700 hours, the cost will be in the lower price range, but if you want the same app to work across all platforms (web, Android, iOS…), the cost will rise to a 6-figure price.

average-cost-of-software-development

Please take note that the prices listed in this article do not reflect the actual pricing of Quantox Technology but are rather a reflection of an analysis related to the average software development costs in the industry.

Main Factors of Estimating Software Development

The perfect software development cost estimate will consider that we are not living in a perfect world, and circumstances that are out of our control can happen often. Things like staff availability, deployment process, and the time it will take to access the system, or a database will affect the timeline of the project and, therefore, can affect the cost.  However, the following factors are the most important to explore if you want to learn how to determine the cost of software development in 2022.

  • Platform

Different platforms like Android, Web, and iOS have a different volumes of users, and depending on which platform you’re building your software, you’ll be able to reach a different number of possible users. However, developing a cross-platform app takes means that the cost of software development is going to go up. A cross-platform app is deployable on all platforms with the same codebase. Still, you need an experienced team to save time on building this type of app, and it may not even be the best solution for products that include streaming, graphs, and dashboards.

Your next solution is to build a native app for each platform meaning one codebase for iOS native to this platform, and a different code for Android. However, this solution is also the most expensive one as you’re building two separate applications. You can always do what most start-ups do- focus on one platform until you achieve a certain level of success and expand your budget. After that, you can easily take on the cost of building the same app for all other platforms.

Now you’re probably wondering, “But what about the cost of the software development technology?”. If you opt for one of these 10 software development trends in 2022, like augmented reality, virtual reality, or blockchain, it may cost you more. However, you’re still paying a developer, engineer, or programmer for the job. Most of these technologies do not require a special type of equipment to execute a project successfully- it’s the knowledge and effort of the person working on it that’s going to cost a little bit extra.

  • Type of software project

Software development projects can be divided into the following types starting from the lowest level to the highest:

  • Web Development: a custom web-based software development
  • Software Integration: the existing software’s capability is expanded by adding custom code. Here we include plugins, or packages like Office, data flow manipulation (NetSuite to QuickBooks), and similar.
  • Software Modification: large-scale enhancement of the already existing software
  • New Software Development: custom development of brand-new software.
Type-of-software-project

Depending on the type of the project, we’ll need a different team with a different amount of development effort. Once we have all the facts, we will reach the final estimate by combining this information with the project size analysis and team analysis.

The Size of the Software Project

This step can be a bit trickier because the size of the project sometimes doesn’t correspond to its complexity. A large project can sometimes be more straightforward than a small but highly complicated project. Generally, software development projects are divided into small, medium, large, and enterprise.

  • Small Software Project: Small software projects are considered those that will involve minor changes like making bug fixes or making minor changes to the user interface. All communication with the client will be them saying, “I want this changed/fixed,” followed by “Here is how we changed/fixed it.”
  • Medium Software Project: In this category, we can include a small mobile application or web interface- anything where we have a single source of data. Medium-sized projects do include more minor tweaks and fixed, but also solutions and integrations. The interaction with the client is not as limited, and you may expect a few sessions or regular weekly check-ins.
  • Large Software Projects: Almost everything is included in large-scale software projects: syst4ems integration, databases, security, logging features, framework, thinking hard about maintainability and scalability while creating multi-party applications across all known platforms. The client interaction is often daily, with weekly status calls being made to the higher-level management.
  • Enterprise Software Project: Think of a large project and multiply it by a dozen. Enterprise-level projects are almost always built upon an underlying framework. Security, error handling, and logging are much stricter, while data integrity has become vital for these applications. Support systems are built to be “bulletproof” and handle as many as three concurrent faults without the user noticing anything. A great example is an Uber mobile app. In these types of projects, the client and the IT team become one, and their interaction includes daily status reports and calls across teams and divisions and weekly status calls to the higher-level management.


  • Size of Development Team

When it comes to the size of the development team on one project, usually, we’ll have at least three roles- a Project Manager, a Developer, and a QA Tester. However, depending on the size of the project, these three can expand the scope of their work, and we can have a developer who’s also in charge of a testing phase. Larger projects, however, prefer to assign one role to one team member to get the job done.

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  • Location

Hiring software developers anywhere in the US or Western Europe may overwhelm your budget because their hourly fee averages around $100/hour. The developers based in eastern Europe proved that they could build software applications without compromising the quality and at a much lower rate. Asia can also offer software development professionals at a lower rate, but time zone, language barriers, and cultural differences proved to be a challenge for any type of project.

  • Hiring Options

The IT industry allows you to find the best developers in the world to work on your software. You can hire a software developer in three different ways- as a freelancer, within an in-house team, or by outsourcing a development company.

-Freelance Software Developers: While there are a lot of great freelancing platforms where you can find amazing software developers for a low price, there’s practically little to no guarantee that your project will be completed successfully, if at all. There’s also no way for you to control the freelancer and the progress they are making on your project.

-In-house: Having an in-house software developer means hiring the one to work on your project from the comfort of your own office. That way, any issues or bugs can be resolved on the spot. However, the recruitment process can be time-consuming, even with the help of LinkedIn or Glassdoor. You’ll also find that having an in-house software engineer can require more investments in salaries, taxes, and equipment as well. Also, you’ll find out that software developers need a lot of really helpful software development tools to allow them to build and integrate your new software app, and this is something that will also have to come out of your budget.

-Outsourced: Software Development Outsourcing has a much more significant impact on the cost of software development. While developing software in-house does provide a certain amount of security to the client, the cost of outsourcing software development outweighs the additional security by reducing the cost by 40%. 

This happens because there’s a gap between developed and developing countries like India and Mexico. With outsourcing, you can cut costs and still get a top-notch product. All it takes is a bit more focus on choosing the best software development partner in 2022 to get your project completed.

Our methodology for estimation of Software Development Cost

At Quantox, we recognize that there are no two businesses that are the same, and similarly, the apps and software we create for our clients are all unique. However, to start-up and business clients, knowing the cost of software development is imperative to plan their budget.

Our systematic process allows us to give our clients a precise cost estimate. When you show your interest in working with Quantox Technology, we make sure to schedule a meeting and discuss your idea in detail. We will ask you detailed questions regarding your app or software but also related to your goals and business requirements. You’ll receive your cost estimate with an architecture diagram within seven (7) working days.

If you are satisfied with the project cost estimate, we can present a few options to start building your app the best way.

 How Quantox Can Help Your Business with Software development

Quantox Technology has been developing tailored software solutions for more than a decade, and we have a track record of creating accurate software development cost estimates. By including the non-technical factors that impact the cost of software development, our clients have a clear picture of what it takes to digitalize their ideas. If you need a software development cost estimate, Quantox Technology will be glad to assist you with it. Let’s Talk!

You can learn more about how to estimate the cost of software development in our free eBook “The Ultimate Guide to software development in 2022”. Find out more about the 2022 programming trends and software development tools that can help your business grow.