Introduction
When businesses consider investing in digital transformation, one of the first questions that comes to mind is: How much does custom software development cost? The reality is, there’s no single answer. The custom software development price can vary dramatically depending on your project’s requirements, technology stack, and business goals.
Whether you’re a startup looking to build your MVP or an established enterprise aiming to modernize legacy systems, understanding the main factors behind custom software development cost is crucial for effective planning and budgeting.
In this article, SotaTek ANZ, a trusted software development company in Australia, will break down the key elements that influence custom software development price, explore different pricing models, and share practical tips to help you maximize value while minimizing unnecessary expenses.
Factors Influence Custom Software Development Cost
Factors Influence Custom Software Development Cost
Project Scope and Complexity
Project scope and complexity are among the most decisive factors in determining your custom software development cost. A small-scale project, such as a simple mobile app with basic features, might take around 3 to 6 months to complete. In contrast, more complex solutions like enterprise resource planning systems or applications with advanced integrations often require 9 to 12 months or longer to deliver.
According to industry reports, initial planning and requirements analysis usually take about 4 to 8 weeks. UI/UX design can add another 6 to 10 weeks, while the main development phase for a medium-sized project often ranges from 12 to 24 weeks. The final testing and deployment steps can require an additional 4 to 8 weeks.
As a result, the more features, integrations, or platforms your project involves, the more time and resources will be needed. Therefore, your custom software development price will scale up accordingly. Clearly defining the project scope and priorities at the outset is the best way to estimate costs accurately and avoid budget overruns later on.
Technology Stack
Your choice of technologies is another major factor affecting the total development cost. Different programming languages, frameworks, and platforms come with varying levels of complexity and associated costs. For example, building a web application with commonly used stacks such as JavaScript, Node.js, or PHP might be more cost-effective than implementing emerging technologies like blockchain, augmented reality, or Internet of Things (IoT). Projects that require specialized knowledge or custom integrations often involve higher costs, both in terms of initial development and long-term support.
Development Team Location and Experience
The structure and location of your development team have a direct impact on your custom software development cost. Building an in-house team in Australia or other high-cost regions often leads to higher expenses, with mid-level developer salaries ranging from $75 to $150 per hour in North America and $60 to $120 per hour in Western Europe. This approach may offer more direct communication but also involves additional costs for recruitment, employee benefits, and infrastructure.
By contrast, outsourcing your software development to regions with lower labor costs, such as Asia or Eastern Europe, can help businesses significantly reduce their custom software development price. In Asia, including Vietnam, mid-level developer rates are typically between $15 and $40 per hour, and in Eastern Europe, they range from $25 to $60 per hour. Outsourcing allows companies to tap into large pools of skilled talent while paying a fraction of the cost compared to hiring locally.
SotaTek ANZ takes a hybrid approach by combining local project management in Australia with the ability to leverage our extensive developer pool at SotaTek Head Office in Vietnam. This model gives clients the advantages of close collaboration and transparency while also ensuring access to cost-effective, high-quality development resources. As a result, SotaTek ANZ can deliver custom software solutions that are both affordable and reliable, helping clients maximize their return on investment without compromising on quality.
Integration with Third-party Services
Many custom software projects require integration with external platforms or services. This could include payment gateways, customer relationship management (CRM) systems, cloud storage solutions, or third-party APIs. The complexity and number of these integrations will influence the timeline and cost of your software development. Each new integration introduces additional technical challenges, compatibility considerations, and potential testing requirements that can impact the budget.
Software Development Cost Breakdown
Understanding how your budget is allocated can help you make smarter decisions and avoid unexpected expenses during your software project. The custom software development price is typically divided among several key phases and deliverables, based on Software Development Life Cycle:
Planning and Requirements Analysis
This initial phase includes business analysis, workshops, and defining your project’s scope. It usually accounts for about 10%–15% of the total project cost. Detailed planning reduces the risk of costly changes later on.
UI/UX Design
Design costs can range from 10% to 20% of your budget. This covers user research, wireframes, prototypes, and visual design. A well-designed interface can save money in the long run by reducing user errors and support needs.
Development (Frontend & Backend)
The largest share of your investment, usually 40%–60%, is dedicated to writing code and building the actual product. This stage involves both frontend (what users interact with) and backend (server, database, and logic) development. The cost here depends on complexity, chosen technologies, and number of platforms (web, iOS, Android).
Testing and Quality Assurance (QA)
Ensuring your software is reliable and bug-free typically takes up 15%–25% of the budget. QA includes manual and automated testing, performance checks, and security assessments.
Deployment and Training
Deploying the finished software and training your team usually accounts for 5%–10% of total costs. This step ensures a smooth launch and that your staff can use the product effectively.
Third-Party Services and Integrations
If your project requires integrating external services like payment gateways, analytics tools, or cloud platforms, these can add both upfront and ongoing costs. Licensing fees, subscriptions, and API charges should be considered in your total estimate.
Hidden or Additional Costs
Don’t forget about post-launch support, software maintenance, and potential scaling needs. These costs can represent an additional 15%–20% annually after deployment.
Which Software Development Pricing Model is Right for Your Business?
|
Pricing Model |
Definition |
Best for |
Key Benefit |
Challenges |
|
Fixed Price Model |
A pre-agreed, fixed total cost for the entire project, based on detailed requirements and scope. |
Small, well-defined projects |
Budget predictability |
Limited flexibility for changes |
|
Time & Material Model |
Pricing is based on the actual hours worked and resources used, allowing billing as the project evolves. |
Agile, evolving projects |
High flexibility to adapt scope and priorities |
No fixed budget; costs can increase if scope expands |
|
Dedicated Team Model |
A full team works exclusively on your project for an agreed period, often on a monthly or long-term basis. |
Large, long-term projects |
Consistent expertise and team continuity |
Higher overall cost; requires active project management |
|
Hybrid Model |
Combines fixed price for well-defined components and time & material for parts likely to change. |
Projects with both fixed and evolving elements |
Balance of cost control and adaptability |
Requires strong management to handle both pricing approaches |
Tips to Reduce Custom Software Development Cost
Tips to Reduce Custom Software Development Cost
Start with a Minimum Viable Product (MVP)
Instead of building a fully-featured product from the outset, focus on developing a Minimum Viable Product (MVP) that includes only the core functionalities necessary to address your main business goals. By launching with an MVP, you can quickly test your concept in the market, gather valuable user feedback, and validate your assumptions before investing in additional features. This approach not only minimizes initial costs but also helps you avoid spending budget on features that customers may not actually need. Many successful software products like Uber and Airbnb began as MVPs before expanding based on real-world usage and demand.
Prioritize Features Based on Business Value
Before starting development, carefully prioritize all desired features. Use frameworks such as the MoSCoW method (Must-have, Should-have, Could-have, Won’t-have) to distinguish between critical and non-essential requirements. By focusing resources on must-have functionalities first, you ensure your budget is spent on what delivers the highest value to your business. This method also helps control scope creep, one of the main reasons projects exceed their original budget. Collaborating with your software development partner to regularly review and adjust priorities throughout the project can further optimize costs.
Outsource to Cost-Effective Locations
Building an in-house development team often requires a significant investment—not just in salaries, but also in benefits, recruitment, training, and office space. For many businesses, these expenses can quickly add up and put pressure on the project budget. Outsourcing software development to regions with lower labor costs, such as Asia, offers a more cost-effective alternative. Development teams in these locations typically provide high-quality work at a fraction of the cost, enabling companies to achieve their goals while keeping their custom software development cost under control. This approach allows businesses to access a wider pool of skilled talent without the long-term financial commitments associated with hiring and maintaining an in-house team.
Choosing SotaTek ANZ to Leverage Cost Competitiveness
Selecting SotaTek ANZ as your software development partner means you benefit from both local expertise in Australia and direct access to our global talent resources. With a team of over 1,000 highly skilled developers based at our Head Office in Vietnam, SotaTek ANZ is able to deliver world-class software solutions at highly competitive prices.
Our unique delivery model enables clients to take advantage of lower development costs in Asia while enjoying professional project management and seamless communication with our local Australian team. This cost-effective approach removes many of the overhead expenses associated with hiring an in-house team, such as high salaries, benefits, and office infrastructure.
Besides, SotaTek ANZ brings extensive experience as a trusted partner to organizations worldwide. We have successfully delivered 500+ software projects for clients across a wide range of industries, from startups to large enterprises. Our proven process, deep technical expertise, and commitment to transparency ensure that you receive maximum value without compromising on quality.
Partner with SotaTek ANZ to leverage our global resources, industry experience, and cost advantages so that your business can achieve more with every technology investment.
Conclusion
Estimating the custom software development cost can be challenging, as it depends on many factors. Understanding these components early on allows you to make smarter decisions, avoid unnecessary expenses, and invest more effectively in digital solutions that drive business growth.
Ready to get started? Contact SotaTek ANZ today for a transparent, tailored estimate for your custom software project.
https://sotatek.com.au/ 
+61-410-365-172 
