Custom software development costs vary from $20,000 to $250,000, depending on team size and the time required for designing and developing the software.

In today’s modern business landscape, crafting software is imperative for businesses to run successfully and avoid being left behind. Software solutions play a pivotal role in streamlining business operations, managing and maintaining customer relationships, gain better visibility and control over their business processes. 

Investments in custom software development are surging owing to the aim of creating unique software that addresses complex business challenges. Custom software development is the comprehensive process followed by a Software development company to meet the unique business needs of customers. 

Before deeply delving into creating custom software it is paramount to understand the cost associated with it. In this blog, we will be discussing the custom software development cost and the factors associated with it. 

Stats and Facts About Custom Software Development

Custom software is highly opted by businesses as they are tailored solutions that perfectly align with the business needs and propel them towards tangible growth. The following stats and facts illustrate the role of custom software in the thriving software development landscape.

As per the reports from Grand View Research, the global custom software development market size was estimated at $35.42 billion in 2023 and is anticipated to grow at a CAGR of 22.5% from 2024 to 2030. 

Statista estimates that the global software developers population will reach 28.7 Million by 2024. 

How Much Does It Cost to Build a Custom Software?

The average custom software development cost ranges from $50,000 to $200,000 and beyond according to the business needs. The exact cost of building custom software cannot be determined precisely without the prior analysis of the software project and other factors. The custom software cost is influenced by various factors such as software complexity, UI/UX design, development team and location, etch stack, etc. 

Approximately the cost of developing custom software for a small-size project ranges between $10,000 and $50,000 as they require the basic features and functionalities and the scope and objectives are limited. The cost of building custom software for a medium-sized project ranges from $50,000 to $200,000 as they include certain complex features and integration. The custom software development cost for complex or enterprise-grade software projects ranges from $200,000 and exceeds to million dollars. The complex projects incorporate advanced features, technologies, various system integrations, and databases. 

Project Size
Estimated Cost
Estimated Duration
Small$10,000 - $50,000
4 Months
Mid-Scale$50,000 - $200,000
6 - 8 Months
Large-Scale$200,000 and beyond
8 - 12+ Months

Custom Software Development Cost Analysis 

Creating a perfect custom software entails various phases. It is vital to clearly understand each phase to perform an effective cost analysis to barge into the custom software development journey. 

Project Requirement Analysis and Planning

The initial phase of custom software development is requirement analysis and planning. The development team proceeds with analyzing the client's requirements such as scope and objectives to efficiently plan the software development strategy. This phase includes around 5 to 10% of the cost of creating custom software. 

UI/UX Design 

At this phase, the designers and developers emphasize creating an interactive and user-friendly interface, wireframes, and mockups. Roughly, 10 to 20% of the cost goes for the UI/UX design phase. The price may vary based on the additional customizations and the cost can be minimized by using ready-to-go templates. 

Development and Functionalities Implementation

This is the core software product development phase. This phase involves creating solid software by integrating front-end, back-end, and third-party APIs and implementing the desired features, functionalities, APIs, etc. This phase takes the major part of the original development cost.  

Quality Assurance and Testing

The next is quality assurance where the developers identify glitches and bugs. The software testing team conducts rigorous testing to address the errors and make improvements in the performance and scalability of the software. Approximately, 15 to 20% of total development cost goes to this phase. 

Software Deployment and Maintenance 

Software deployment and maintenance is the last phase of building custom software. The developed software is deployed on the main net and regular software updates are offered to ensure the software performs seamlessly and this phase can cost 10 to 20% of the final development cost. 

Custom Software Development Cost on an Hourly Basis 

Custom software development costs highly rely on the project size, scope, and development team. Now, we will explore the hourly rate of software developers for creating custom software based on the project size, location, and expertise. 

Hourly Rate For Custom Software Development According To Project Size

The software developer’s hourly rate differs from project to project based on their size and features. The hourly rate of a software developer for a small-scale project varies from $15 to $30 per hour. For a medium-scale project, the hourly rate of a software developer ranges between $40 to $75 per hour, and for a large-scale project, the hourly rate ranges between $80 to $125 and this may exceed based on the additional integrations. 

Software Project Size
Average Hourly Rate
Small-ScaleStandard security, reports, and analytics, intuitive interface
$15 - $30
Medium-ScalePayment gateway Integration, Chatbots, social media integration
$40 - $75
Large-ScaleAI-powered analytics, Third-party API integration, advanced encryption
$80 - $125

Custom Software Developer Hourly Rate Based On Expertise and Location 

The custom software developer's hourly rates depend on their expertise and diverse location. In the majority, the software developers are categorized as entry-level, mid-level, and senior-level, and the wages are based on these levels. This rate also differs from location based on the labor costs and cost of living. Compared to the USA, and UK, the cost of custom software development is lower in India owing to the large pool of developers. 

Factors That Affect The Custom Software Development Cost

The custom software development cost is impacted by various factors and is vital to have a look at those factors before budgeting for creating high-performing custom software. 

Complexity Of Design 

User Interface (UI) and User Experience (UX) are vital for delivering a seamless user experience and usability through advanced graphics, and animations which ultimately boost user engagement and promote customer satisfaction. Thus to craft an intuitive user interface requires more cost and consumes more time. By providing the right design specifications businesses can reduce the overall cost of creating custom software. 

Development Team Size 

The development team size plays a major role when developing custom software. A dedicated software development team comprises a Project Manager, Business Analyst, Software Developer, QA Engineer, DevOps Engineer, and UI/UX Designer whose cost depends on their level of experience, expertise, and software project type. Hence, it is vital to choose the right development team and resources according to the project scope and complexity. 

Development Team Location 

The location of the development team highly impacts the custom software development cost. The wages for software developers significantly vary across different countries with different time zones and cultural differences. Compared to countries like the United States, the United Kingdom, and Canada, software developer wages are low in countries like India, and other Asian countries. Hence, businesses should choose a development team from the appropriate country with a rich pool of talent. 

Tech Stack

The technology stack plays a major role in determining the cost of creating custom software. The preference for programming languages, frameworks, and databases affects the overall development cost. The business landscape is evolving and technological innovation is racing up, hence the integration of technologies such as Artificial Intelligence (AI), Machine Learning (ML), Predictive Analytics, and Internet of Things (IoT) will set new standards for creating software and drive up the overall cost. 


Implementing the advanced features drives up the cost of building custom software based on their complexity. To reduce the cost associated with features businesses should conduct careful planning to identify the crucial features and develop them. Gathering the perfect requirements from the clients aids in reducing the cost and having control over scope creep. 

Wrapping Up 

If you are on the journey of custom software development this guide would help you better create full-functional custom software within your budget. Maticz is the leading custom software development company that excels in offering comprehensive custom software solutions catering to the unique business needs of clients. We follow an impeccable development methodology and practices that result in a structured development process by capturing your objectives and vision. 

Our seasoned software developers aid in crafting pixel-perfect custom software fostering innovation and efficiency in the technology-driven world. We ensure to offer the software project at the pre-determined time without any compromise on the quality of the software. Get in touch with our experts at Maticz to get your cost estimation for custom software development and drive success in your business. 

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