How Much Does A Web Application Cost: A Proven Way To Determine The Real Price

One of the most popular questions we hear from our clients is “how much does it cost to build a web application?”. We will show you exactly what components go into the price charged by software companies for custom web application development services.

We understand perfectly well why most of our clients would like to get the price for their project right away. It would be very convenient to know the exact amount of money required to bring your neat idea into fruition and implement all the features you have envisioned. This would allow to better plan and administer funds.

Unfortunately, a lot of clients don’t have a full insight into how to develop a web app. Most of the times a web application development company won’t be able to give you an exact estimate right away. This is because web applications development is a multi-stage process that takes a lot of time and effort.

Each project is a unique undertaking that requires varied approaches, tools, and team compositions. Thus, a lot of variables go into the web app development cost.

The best we can do is to dissect the main factors that determine the cost to create a web app. We’ll also give you an idea on how to pay less without sacrificing the quality of a product.

By the end of this post, you’ll know more than most when it comes to calculating web app development cost.

Here is What the Development Process is

If you want to develop a web application, it’s a good idea to take a step back and figure out what a development process consists of and why you should pay for each activity.

Regardless of the used methodology, the web development is a very labor-intensive process. Each of its stages requires hard work of several qualified specialists.

As a part of a go-to-market strategy, the development usually has five stages: requirements gathering/analysis, prototyping and design, development, testing, and launch to market.

1. Requirements gathering/analysis

This is the stage at which a business analysis department conducts several interviews with the client. They ask a lot of questions about the client’s vision, desired features, goals, etc. During the whole course of a project business analysts act as mediators between stakeholders and the development team. At this stage a prototype is produced, wireframes are built, use cases and user stories are written, functional and scope documentation is prepared.
Resources needed: A product/project manager.

2. Design

This is the phase where the magic happens and designers come up with the look and feel of the application. This stage involves the design of user interface, experience, and various visual elements. The designers try to make interacting with the application a pleasant and memorable experience, as well as to make the application reflect the soul and spirit of your brand.
Resources needed: 1 UI/UX designer.

3. Development

This is the most obvious step in bringing an application to life which usually includes development of the front-end and back-end of the application. The team can proceed to the coding itself. Unit tests are run to ensure that each smallest testable piece of code (called unit) functions correctly.
Resources needed: 1–3 web developers.

4. Testing

This is when Quality Assurance engineers perform functional, UI/UX, and other testing. In addition to manual tests, QA department can run automated tests. This option costs additional money but is essential for large projects. The final phase of this stage is User Acceptance Testing (UAT) performed by the actual intended users of the application.
Resources needed: at least 1 QA engineer.

5. Launch and maintenance

The last stage at which the product is finally launched. Load testing is performed to see how the application behaves under normal and peak load conditions. The team prepares domain and server and performs the final testing of the system before its release. After the application has entered the market you can start the process all over again to continue development OR move to the support stage.
Resources needed: all the team.

As you can see the development team consist of at least 4 highly skilled professionals working full-time to bring your idea to life. Moreover, each phase requires the usage of different tools and resources.

Remember that the cost to bring an application to market goes beyond a simple MVP budget. The costs are much more than the initial, UX, design, development, or project management dollars. There will be at a minimum budget required for ongoing updates and some server costs.

What Factors Influence the Costs of Development?

Let’s take a look at the main components that affect the cost of web applications development:

• The scope of work.
• Business niche.
• The technical complexity of the project’s features.
• UI/UX design.
• Deadlines.
• Non-functional requirements.
• Development company.
• Engagement model.

Now let’s examine each of these factors separately and see how they may increase or decrease the costs of web development.

Scope of work

A scope of work may be described as a set of features that the web application is required to have or the amount of work required to develop them.

If you’ll try to implement all the desirable features at once you’ll prolong the development process and increase the initial costs.

Оn the contrary, if you focus on a minimum set of most valuable features and implement additional features through the upcoming updates, the upfront cost will be dramatically reduced. Nerds call this philosophy ‘MVP approach’.

The programmers would need to only code the essential features, the QA engineers will, in turn, have much less code to test and so on. Simply put, each additional feature requires additional time from professionals who receive their wages on an hourly basis.

Thus, an MVP approach is a clear winner in this category. Of course, in the long run, the cost of your project development will increase after each release. But the digital world is in constant flux and the best decisions are made based on insight, so you will at least pay only for the features that your business and your users need at the moment.

Takeaway: implementing all the features at once increases the cost of development and delays the release of your web application; using the MVP approach helps to reduce the costs and avoid the risk to invest in useless features.

Business niche

A broad business domain means that there are plenty of people available who can turn your idea into reality. A huge pool of potential contractors means that the price has to be kept in check because of healthy competition.

Nowadays every man and his dog can, for example, develop an online shop. We’ve already detailed the process before. The problem that can arise from such situation is a lot of incompetent developers hiding among the accomplished and reputable companies.

If your niche is extremely narrow, prepare to open your wallet wide. It can be very difficult to find the developers who know their onions in such a case. A company employed to develop a very specific application might need to hire a specialist in a given area. They might have to organize additional training for the staff. All of this prolongs the development and increases its cost.

Takeaway: a narrow business niche means higher costs of development; a broad business domain meant lower costs.

Technical complexity of the project’s features

Some of the features are a standard fare for the web development companies. They are typical and don’t require any extraordinary operations to implement them. That’s why the developers don’t charge that much for such features.

Other features, such as third-party integrations, can be rather tricky to implement. Integrations are usually done by means of Application Programming Interfaces — or API for short. In our example, a sleek online shop, it may be required to integrate a shopping cart, a shipment module, a checkout, a payment gateway, social media and much more.

But why is API integration considered such a complex task?

First of all, the developers have to interact with the interfaces created by the third parties. Quite often the programmers have no prior experience if the integration is of a non-standard kind. The third-party technologies may have compatibility problems with the in-house tech. The providers can make alterations to their APIs. Sometimes this may break your application until the programmers resolve the conflicts.

That’s why the development team has to thoroughly research the API they need to integrate. Also, the third party integration requires a lot of additional testing needed to determine how the application interacts with the API. All of this, of course, costs a lot.

Takeaway: implementation of technically complex features increases the costs of development; routine features are not so expensive.

UI/UX Design

If you want a fully custom design be ready to fork out a pretty penny. Not only professional designer(s) will have to slave away 24/7 to come up with a design that is: a) different from every other company on the Internet; b) reflects the identity and philosophy of your brand.

HTML/CSS coders would also have to develop a custom markup for the app. Pretty effects and breathtaking animations, company logos, etc. all take additional time and cost more money.

The cheaper alternative is a standard design consisting of pre-built templates and themes. The costs of design also depend on plans for the future. For example, if you plan to launch a mobile app in addition to a web application this desire should be taken into account when making the parent application.

Some specific requirements of a client (i.e. support of older browser versions) can cost additional money.

Takeaway: custom design increases the costs of development; design based on existing templates and themes helps to cut costs.

Deadlines

The costs of development are greatly affected by the time limits imposed on the dev team. A rush job almost always means higher costs. This is because to meet the tight deadlines more resources have to be dedicated to the development process. A tight schedule also comes with higher risks and increased need in effective management.

At some point simply adding another developer to the team yields no significant increase in productivity. This is because it is hard to divide complex tasks into smaller, more manageable subtasks.

The need for internal communication increases so do the disputes and as the result team becomes much harder to manage.

Sometimes it’s more effective to encourage the team to work overtime than to simply add developers. This, of course, means that the client has to compensate that extra workload so that the overworked sleep-deprived developers don’t organize a riot.

Takeaway: tight deadlines cause the costs of development to go up; lax time limits help to cut down the costs.

Non-functional requirements

Every software product has a set of functional requirements, i.e. a list of things the application should be capable of doing. All the other requirements can be grouped into a category of non-functional requirements.

This category consists of various characteristics which describe how the application works. The examples may include scalability, security, usability, reliability, performance, etc. Their importance lies in that they influence the experience that users have while interacting with the system.

One of the most important non-functional requirements is the system’s capacity or a number of requests it can handle per unit of time. High-load systems always cost more money to develop for several reasons.

First of all, their architecture differs from that of normal applications. If the system is expected to be used by millions of people daily it should be extra reliable, secure, and have almost no downtime.

Developing a high-load system may require drawing in additional specialists who have experience in creating such products. Also, the server equipment needed to run a high-load application is far more expensive than the machines used for common web applications.

Takeaway: high-load systems cost a ton of money; regular ones — not so much.

Choice of developer

The choice of company you entrust to create your web app is one of the most important variables that influence the costs of development. The more the company pays its employees the more it charges its clients.

Hourly rates for web app developers depend on three key factors:

1. Geographical location.
2. Experience.
3. Company’s size, expertise, and reputation.

The physical location of the developers determines how much they are paid. The professionals living in countries with a higher cost of living tend to have higher salaries.

Developers in USA, Canada, the UK, and Australia can be hired to make a web app for $80–250/hour.

Eastern Europe, Middle East, and South America come second with $30–110 per hour. The cheaper option is to hire developers from Ukraine for $20–50 or India for $10–80 per hour.

It’s no secret that freelance developers have lower rates than their counterparts employed at the biggest agencies in the field. Experienced developers tend to charge more for their services than the newcomers. The services of well-known companies can cost a lot due to brand recognition. Thus, you have to look for a delicate balance between your budget and the reputation of the people you hire.

Some software giants won’t even touch your project if your budget doesn’t come near $500,000 or more. MindK, on the other hand, can tackle projects of almost any scope. The main advantage of MindK is that we have our development department located in Ukraine, a home for some of the most talented people in the industry. The country also boasts one of the highest populations of developers in Europe while having modest hourly rates.

Takeaway: large companies in first world countries charge more than smaller developers and companies in countries with a lower standard of living.

Engagement model

Software development companies use a great variety of different engagement models. Each of them has various benefits and drawbacks. This is yet another thing that can greatly influence the final costs of developing a custom web app.

Two of the most used engagement models are fixed price and non-fixed price models.

Fixed price
Under such type of contract, the budget, timescale, and volume of work are set in stone and stipulated by both parties beforehand. The price is based on the estimate produced by the development company before the start of development. Fixed price contracts require completeness of initial requirements and tight control over changes.

The developers bound by a fixed price contract bear all the risks. The developers can’t exceed the estimated budget and deadlines so the risks are calculated beforehand and are included in the final price. On one hand, fixed price contract offers a great degree of predictability. On the other hand, fixed price is the most expensive and the least flexible type of contracts.

Non-fixed price

This is an umbrella term for a number of engagement models. There are a great number of its subtypes such as Cost Plus, Guesstimate, Time and Materials, Dedicated Development Center. All of them have common features.

Under a non-fixed-price contract, the cost of development is not set in stone and can dynamically change during the development process. The contractor and the client typically share their risks.

Thus the developer doesn’t have to overcharge the customers for the risks so the costs go down.

Our advice is to start the MVP development under a fixed-price contract and then continue the cooperation under a more flexible engagement model.

At the very beginning, there can be a lack of mutual trust between the developer and the client. It’s only natural to have a bit of wariness towards people you know only by their advertisements on the Internet or the client’s testimonies.

Developing the MVP under a fixed price contract allows you to limit the scope of the project while being upfront with deadlines and the project’s costs. You don’t have to bear any risks and you’re guaranteed to get a working solution within the deadlines. As the mutual trust growth, it’s better to choose one of the more flexible engagement models. In such a way you’ll save a lot of money.

Takeaway: Fixed price contract increases the costs of development; non-fixed price contracts help to cut down expenses.

Conclusion

Now, we hope, you have a good idea about the factors that influence how much it costs to build a web application and why the developers hesitate to give you the answer right away.

To recap the most important determinants: scope of work, business niche, the technical complexity of the project’s features, design and user interface, deadlines, non-functional requirements, choice of developer, and the chosen engagement model.

As you can see different factors and decisions can decrease or increase the costs of development. That’s why it is very important that you discuss all the ins and outs of your dream project with the development team.

Only together you can decide where it’s possible to cut corners and where it’s better to pay more so that you’ll get a product of the highest quality.

You also have to remember that money spent developing a functioning app form only part of the budget. A great portion of the budget is going to be spent on marketing, updates and added features, backend maintenance, customers support, and other expenditures. So keep that in mind when hiring a team of professionals to develop your project.

If you’d like to get additional info or ask a question just message us or make a comment. Turning big ideas into fully functional applications is part of our everyday work. If you want to know our rates do not hesitate to contact us and we’ll be glad to produce an estimate for your application.

Oleg Nesterov

Founder, CEO and lead strategist. Passionate about web and mobile development, product management and superb client service.

Source: https://www.mindk.com/blog/how-much-does-a-web-application-cost