When thinking about developing a digital product, either a mobile app or a web app, two main questions pop-up in everyone's mind "how much does it cost to make an app?" and "how much time will it take?".
With those two questions in mind, we developed this thorough guide. We want to help you understand better how to estimate the development costs and how to assess the time needed to launch your app to market.
At Digitalya, we receive these two questions very often, and we thought of giving entrepreneurs, and CTO's a helping hand in choosing the best solutions for their needs. That's why we gathered a series of questions from our clients and answered them below. Also we developed this user friendly app cost calculator that can help you estimate your app costs in less than ten minutes.
There are many factors to take into consideration, and as a startup owner or someone in need to digitalize some processes, you might find them overwhelming. With so many options, the paradox of choice is just around the corner. We hope that the questions answered bellow will bring some clarity and help you set up the next steps.
To offer you a complete overview and help you choose the right solution for developing your app, we also analyzed the industry prices, and we pointed out the most important things to consider when calculating your development costs.
So let's start then.
1. Software companies vs. Freelancers vs. In-house developers vs. App builders - What are the pros/cons and prices? 2. Mobile Apps vs. Web Apps vs. Both — What's the difference in price and functionality? 3. User roles - How do I get users to use my app? 4. How much will custom features cost? 5. How much does it cost to integrate in my app Artificial Intelligence (AI), Virtual/Augmented Reality (VR/AR), Internet of Things (IoT) or Robot Process Automation (RPA)? 6. How long does it take to build an app? 7. How much does it cost to make an app in 2020? 8. Conclusion
1. Software companies vs. Freelancers vs. In-house developers vs. App builders - What are the pros/cons and prices?
a. Software development company
The easiest option to choose from, taking into account the quality perspective and the management effort, would be a software development company, like Digitalya. We're saying "the easiest option" because these kind of companies usually put a lot of effort into recruiting the best developers and helping them grow even further on other technologies. Besides that, a software company offers a full-cycle product development, from UI/UX to architecture, development, project management, and QA.
The hourly rate of these kind of companies varies based on the location, the team size, the tech stack, the seniority level of the developers, the code quality, the experience on the market, and other factors.
Based on the size and the seniority level of the developers, the price might vary as following:
- Software development enterprises (100+ employees):
starting from 500 000 $ per product
- Software development agencies (10-100 employees):
starting from 15 000 $ per product
- Software development shops (5-10 employees):
starting from 5 000 $ per product
You will find a detailed infographic showcasing the hourly rate of different regions, at point four, in this article.
- Your digital product will be developed from start to end: from architecture to design and maintenance,
- The company usually has extensive experience, and they will offer you consultation in making the right choices, not only development services,
- The team will have a project manager, who will make sure that your vision is implemented on time and on budget,
- Generally, this solution is the most cost-effective one if you take into account all the factors involved in developing an application.
- There might be some cultural differences,
- In some cases, constant follow-up is needed,
- You might have a different time zone as your software development provider.
The hourly rate of a freelancer depends on different factors as well, like his previous experience, the coding language that he uses, his location. The hourly rate of a freelancer can vary from 15$ per hour to 300$ per hour.
- Freelancer services can get quite cheap, so you might save some money,
- You can talk directly to the person developing your product,
- Freelancers have more flexibility in their schedule so you might communicate with them during the weekends too.
- Usually, freelancers have their expertise limited to one major area like front-end, back-end, design or a specific coding language,
- To develop a complex app, you will need to hire more freelancers. Therefore you should take care of the management part of the project,
- Usually, there is no recourse if they drop a project, so you have limited warranty and liability.
c. In-house developers
Hiring in-house developers is justified mostly when your business has stability, and the product represents your core business.
- The in-house developers will better understand your company culture,
- The availability will be increased,
- You can discuss face to face regarding the company’s objectives and monitor their outcomes.
- In the tech field, finding the right people and hiring them is very expensive,
- You need to invest time in recruiting talent with specific skill-set for your project and make sure they’re constantly up to date with the new technologies,
- You might not have previous experience in managing the software development processes.
d. App builders
An app builder might be the right choice for a product idea that doesn’t need customization, and the app architecture is simple. The app builders usually have a plan pricing, and it can vary between 0$/mo to 800$/mo, depending on the features you need.
- Less pricey than a development company,
- You have a wide range of plans that you can choose from,
- You can start for free then move to a subscription plan,
- Usually, you work with predefined templates and features, so it’s almost impossible to scale,
- You are the one developing the software architecture of the project,
- Even though you don’t need prior coding skills, you should understand how software works and what makes an app successful.
Now that you figured out what solutions are out there and you have a complete overview of the software development market, let's get into more details. Further on, we will help you understand better how you can make a rough estimate of your app, so you will be prepared when negotiating with your software provider.
The first thing you should decide upon is what platform would best suit your users’ needs.
The key to making a good decision regarding the platform choice is to identify your buyer personas and your user personas (if they are different). Start a research to fully understand what are their expectations and how you can fulfill them. Here user interviews come in handy and also competition research. Check information like what are their main needs when deciding to use an app similar to yours, what are the main app features they’re searching for, when do they use it, from what device they prefer to access it.
Depending on the end goal of your app, you should decide upon the following variables:
a. Web Application
Your app can be accessed from a desktop, laptop, or mobile device by using a web browser. If the users have access to the internet, they can use it without downloading it.
b. Mobile Application
Your app can be used on one platform, like Android or iOS or both. In order to use it, users need to download and install it from the app store. It can be a native app or a cross-platform app.
Two separate applications. One that will run on the browser and one that people will be able to download it from the app store.
In the following image, you will find the differences in prices for the two types of applications.
The next step after making the decision regarding the platform is to start defining the types of users that will access your app.
Understanding how your app will be used and what is the purpose of every user when logging into it is important for two main reasons: security & privacy - not everyone should have access to the personal data; overwhelming amount of features - having access to features that you don’t need and don’t use might be distressing.
Usually, you will find the following user roles within an app. You might need all of them, more or only one.
I will take an easy to understand example as a business page on Facebook. Let’s take, for instance Digitalya’s.
- A Visitor is an anonymous user or guest that has limited permissions in accessing the features of the application.
As a visitor entering a business page on Facebook, I can only see the content, but I can’t interact with it, like leave comments, like pictures, upload content.
- A Registered User will have to log in and manage his profile. The user will have access to all content types of different content types based on subscription.
As a registered user, I can create a profile and personalize it. I can interact with the page’s content, like other pages and invite friends to like them too.
- A moderator can perform administrative tasks like approve, create or publish content, add or delete sections.
As a moderator on a business page, I can schedule posts, view page insights, create ads, send messages as the page.
- The Administrator can assign application-specific roles, give different permission to users, and make changes to the app.
As the administrator of the page, I have all the above permissions, and I can manage page roles, edit the page, create and delete posts, publish and manage jobs.
These are the basic roles in an app, but you can create many more depending on your needs and assign them different permissions. Get a sneak peek on the complete business page roles for Facebook, so you will understand how they defined them.
The cost of developing will vary based on how many user types your application will need.
Custom features usually are priced by hour, and that's why it is important to choose the right ones. Bellow, you will find a list with the most common custom features explained and an infographic with the globally hourly rates, which vary from 15$ per hour to 200$ per hour.
So, how do you choose the right ones? After you defined your platform and the application roles, you can move further on in establishing the main app features. Taking into account that in this stage, you want to define your Minimum Viable Product (MVP), try to stick to only the most necessary features.
Here your software provider should be your best friend. With extensive knowledge gathered from building different digital product types, he can help you figure out how you should define your app by understanding your users.
A software development secret is to create demand with your digital product. And the only way to do that is to make it as intuitive as possible with great UI/UX design and the right app features. Let us explain what we mean with this.
Think of an application that you use daily or weekly. Why do you use it? What particularly do you like about it? How often do you use it? Is it a habit for you to use it? What is your role when using it?
When defining your requirements, first put yourself in your user’s shoes. Why is he/she using your app, and what features do they need in order to consider the in-app experience a successful one?
Before deciding upon the main ones, try to identify the app category in which your product would fit: travel, healthcare, transportation, aviation, social media, dating, management and so on. Then research to get inspiration from already-existing apps like Airbnb, Blabla car, TripAdvisor, and others.
Now you’re ready to choose. Taking into account what you discovered from the new research, check which of the following, you want to integrate it into your application.
The dashboard screen provides a full overview of the metrics tracked by your application.
2. Activity Feed
An Activity Feed can provide to your users a list of the most exciting and recent activities performed by other users or freshly published news.
3. Advanced Analytics
With Advanced Analytics, you can discover more in-depth insights about your users, make predictions, or generate recommendations.
The Calendar feature enables your users to plan activities/events and have a complete overview of their schedule.
By integrating the Media feature in your app, your users can check and interact with images, audio, and video content.
6. Maps Geolocation
With the Geolocation feature, you can identify the geographic location of a user or a computing device.
The Booking system can offer a complete analysis of your resources and will help your users prevent overbookings.
Design and plan different events, invite users to participate and interact with your content.
By integrating a messaging feature in your app, your users will be able to chat inside the application.
10. Rating System
Users can give grades or leave reviews based on their experiences.
11. Invitation System
Increase your user base by implementing an invitation system where your users can share your website or application by inviting their friends and colleagues.
12. CMS (Content Management System)
With the Content Management System, you will be able to modify the content inside your app without a developer's help.
By integrating an e-learning system, your users will be able to view their curriculum, get in contact with their teacher or trainer, and access other online materials like e-books, videos, audio files.
14. Video streaming
By incorporating the video streaming feature, your users will be able to record live videos or to save and download video content to watch/rewatch it later.
The development cost for each of these features varies based on the number of hours needed to implement it, the coding language, the seniority level of the developer, if the feature is developed from scratch or integrated with an already existing platform, and if the code written is reusable or not.
A rough estimate of the global average hourly rates are the following:
5. How much does it cost to integrate in my app Artificial Intelligence (AI), Virtual/Augmented Reality (VR/AR), Internet of Things (IoT) or Robot Process Automation (RPA)?
Now that you’ve decided upon your main features, you should see how you can differentiate yourself from your competitors. A smart strategy is to integrate one of the cutting edge technologies and create a unique selling proposition based on that.
The latest technologies can provide your users with the opportunity to have a complete overview of their devices, analyze data based on complex algorithms, automate tasks, or offer enhanced experiences.
You can choose from the following, based on the purpose of your app:
1. Artificial Intelligence (AI)
Integrate AI advanced algorithms in order to understand and interpret your user's needs by using technologies like Predictive Analytics, Speech recognition, Computer Vision, Language Understanding, and others.
2. Virtual/Augmented Reality (VR/AR)
Enhance natural environments and offer enriched experiences to your users by integrating VR/AR technologies.
3. Internet of Things (IoT)
Give your users the opportunity to have a constant overview of their devices by enabling the advanced technologies of IoT.
4. Robot Process Automation (RPA)
Empower your users to automate repetitive tasks by implementing RPA technologies.
The hourly rates for integrating these technologies are from 10% to 20% higher than the usual global hourly rates. Pay attention cause the total cost might get pricey.
Now that you've gone through all the steps of calculating your development cost, you probably would like to know how much time it will take to create your application. This is the second most common question that we receive at Digitalya from our clients.
Basically, the development time is directly dependent on the number of app features you want to have (the technical complexity) and the team consistency. Meaning that if you have a higher budget, you can hire more developers to create your application, so it will take less time. Another factor to take into consideration is the competency of the team. If your team is consisting of senior developers, the time will automatically be shorter, and the budget higher.
The minimum well-functioning development team consists of a front-end developer, a back-end developer, and a project manager. For this set and the minimum features needed for developing an MVP, it will usually take from four to six weeks of implementation.
After the product is launched and tested in the market, the next phase starts, meaning the scaling part. This step consists of implementing new features on the product, and it can last from months to years, depending on the product's success.
Also, an important part is keeping your product updated, also known as app maintenance. This process varies in price, and the total maintenance cost depends on the hourly rate of the company.
To help you, even more, we created an app cost calculator, that includes all the factors mentioned above. The tool was developed based on our experience gathered from working with multiple startups from various industries and feedbacked by experts in the field.
Budgeting is challenging not only for startups but also for established businesses. Prices of building an application vary based on the development solution you choose, the location, the features, the team skill-set, and the new technologies you want to adopt.
The most important thing is to conduct an extensive research in the software development market and to choose the solution that fits your needs best, be it a software development company, freelancers, in-house developers or app builders. Just make sure you carefully consider each and every factor - code quality, experience, price, communication.
We hope that our guide was helpful for you to estimate your app development costs and to understand better what factors to take into consideration when choosing your software partner.
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