How much does it cost to develop software?

How much does it cost to develop software? The answer isn’t straightforward. Software projects vary widely, and each comes with its own unique demands and price tags.

In this article, we'll break down the key factors that impact development costs, helping you understand what drives the numbers and what you might expect to pay for different types of software solutions.

Factors Affecting Software Development Costs

Software development costs can seem unpredictable, but understanding the main cost drivers can help you make smarter, more informed investment decisions.

Here’s a look at what really shapes software costs.

Project Scope

Project scope is a foundational element in software development, with direct effects on both costs and timelines. A well-defined scope acts as a roadmap for each phase of development, providing clear guidance on requirements, functionality, and priorities.

Core Elements of a Strong Project Scope

• Objectives and Goals: Define the core purpose and goals of the software. Knowing the "why" helps the team focus on essential features and avoid unnecessary extras.
• Feature List and Prioritization: Create a prioritized list of features, organized by must-haves and future additions. This structure prevents "scope creep", which is the gradual increase of features that can inflate costs and extend timelines.
• Technical Requirements: Specify platforms, technology stack, and any performance or security needs. Defining these requirements early ensures predictable costs and alignment with your expectations.
• Timeline: Establish clear milestones for design, development, and testing phases. Timelines help maintain budget control by keeping the project on track.

A clear, structured scope enables the team to allocate resources effectively, minimizing revisions and keeping the project on budget. Without a well-defined scope, projects often experience costly rework and overruns. By investing time upfront to define a precise scope, you significantly improve control over development costs

The Technology Stack

Your choice of technology stack affects not only development costs but also long-term maintenance. While new, trendy technologies can be attractive, they often come with higher upfront costs and may require specialized skills, impacting both initial and ongoing expenses.

Established technologies typically offer a larger talent pool, predictable timelines, and mature libraries, making them ideal for stable and cost-efficient projects. Conversely, newer technologies, though potentially costlier to develop and maintain, can deliver advanced functionality for projects requiring cutting-edge capabilities.

Ultimately, choosing the right stack means balancing your project’s immediate needs with its future goals.

Quality Assurance

Quality assurance (QA) and risk management are crucial parts of any software project, though they’re often underestimated in initial budgets.

Quality assurance typically requires 15-25% of the total project budget. Investing in QA upfront helps identify and resolve issues early, reducing the expense and effort needed to fix them after launch.

QA covers more than just finding bugs. It’s also about preparing for potential changes, handling technical challenges, and ensuring resources are available when needed.

Many projects also add a buffer in the budget, which helps the development team stay flexible and handle surprises without sacrificing quality.

Cost Ranges for Different Software Solutions

Let’s look at some cost ranges for different types of software projects in the Swedish and European markets:

Mobile Applications

The cost of developing a mobile app varies significantly based on its complexity and the platform it’s built for.

• Native Apps (iOS or Android): Developing a native app for a single platform (either iOS or Android) generally costs between 10,000 and 80,000 EUR (150,000 to 900,000 SEK). For dual-platform development (both iOS and Android), the budget typically increases to 20,000 to 150,000 EUR (300,000 to 1,700,000 SEK).
• Cross-Platform Apps (React Native, Flutter): Choosing cross-platform development can reduce costs by 30-40%, though it may come with some trade-offs, such as slight compromises in performance or limited access to certain native features.

Web Applications

The cost of web applications varies with the complexity of the front end and back end.

• Basic Business Websites: For straightforward company websites with simple contact forms and basic content management, expect a timeline of 1-2 months, with costs ranging from 3,000 to 40,000 EUR (30,000 to 450,000 SEK).
• Interactive Web Applications: For web apps that require custom features, e-commerce functionality, or integration with APIs, budgets can range much higher, depending on scope.

SaaS (Software as a Service) Platforms

SaaS platforms add infrastructure needs and ongoing scalability considerations to the mix.

• Basic SaaS Platforms: Typically single-purpose tools with basic user management. Development time: 3-6 months, costing 40,000 to 200,000 EUR (450,000 to 2,250,000 SEK).
• Full-Featured SaaS: Including multiple modules, analytics, API integrations, and custom workflows. These often require 8-12 months, costing 100,000 to 600,000 EUR (1,100,000 to 6,750,000 SEK).
• Enterprise-Level SaaS: For high-demand applications, such as multi-tenant architecture, advanced security, complex permissions, and white-label options. Development time: 12+ months, starting at 600,000 EUR (6,750,000 SEK) and beyond.

Strategies to Reduce Development Costs

Cost management is a top priority for anyone investing in custom software. To help maximize the budget and deliver a product that meets specific needs and stands the test of time, here are some essential tips for keeping development costs under control.

1. Start with a MVP

A smart way to control costs is by starting with a Minimum Viable Product (MVP). Rather than building out the entire product at once, an MVP approach focuses on the core essentials that define the purpose of your software. This lets you validate your idea with real users and gather feedback early on, minimizing the risk of investing in features that may not be needed.

By gathering real user feedback, you can add or adjust features based on actual demand, helping each development phase align closely with both user expectations and business goals.

2. Leveraging Existing Solutions

Not every element in a custom software project needs to be built from scratch. In many cases, integrating third-party services, established frameworks, or customizable platforms can deliver essential functionality at a fraction of the cost of custom development.

Often, the balance of custom and off-the-shelf solutions is the most efficient way to meet project goals without inflating the budget.

3. Prioritize Quality to Reduce Long-Term Costs

Investing in quality during development may seem counterintuitive when trying to save costs, but it can actually prevent higher expenses down the line. Writing clean, maintainable code and conducting thorough testing help catch issues early, reducing the chance of costly fixes after launch. Addressing a bug during development is significantly cheaper than solving it once the product is live.

A focus on quality also makes the code easier to maintain and scale, which can reduce future development costs. By investing in solid architecture and testing processes from the beginning, you create a more stable foundation with less risk of technical debt.

4. Design with Scalability in Mind

Cost-effective development is also about planning for future growth. Designing for scalability allows your solution to grow with your business, reducing the likelihood of costly reworks as your needs evolve.

A scalable architecture also means you’ll be better prepared for integrations and improvements down the line, saving you time and costs as your software adapts to new opportunities.