How Much Does Custom Software Actually Cost in 2025
Ask five agencies what custom software costs and you will get five answers that range from $10,000 to $2 million. That spread is not because agencies are making up numbers. It is because "custom software" covers everything from a simple booking tool to a multi-tenant enterprise platform serving 50,000 concurrent users. The question is not how much software costs. The question is how much your specific project should cost - and what you should be suspicious of if a quote lands far outside that range.
We have priced over 300 projects across SaaS platforms, internal tools, mobile apps, and data pipelines. The numbers below reflect what we see in the market as of 2025, not just our own pricing. These are total project costs including design, development, QA, and deployment - not just developer hours.
Price Ranges by Project Type
Here is what you should expect to pay in 2025, broken into categories that actually mean something. These assume a professional team of 3-7 people working with modern frameworks and proper QA processes.
MVP or Proof of Concept - $15,000 to $50,000
This is the starting point for most startups and internal innovation projects. At this budget, you get a focused product with 3-5 core features, basic authentication, one user role, and a clean but not heavily customized UI. Think of it as the minimum version that lets you test your idea with real users. A typical MVP takes 6-10 weeks with a small team of 2-3 developers, a designer, and a part-time QA engineer.
What you can build at this level: a single-purpose SaaS tool, a customer portal, a booking or scheduling system, or a data dashboard with a handful of views. What you cannot build: a marketplace with multiple user types, complex payment flows, real-time collaboration, or anything that requires heavy backend processing.
Mid-Size Application - $50,000 to $150,000
This is where most serious business tools land. You get multiple user roles, third-party integrations (payment gateways, CRMs, email services), a responsive design system, admin panels, reporting, and proper error handling. Projects at this level take 3-6 months and involve a team of 4-6 people.
Real examples from our portfolio: a logistics management platform with GPS tracking and automated dispatch ($95K), a healthcare appointment system with insurance verification and HIPAA-compliant data storage ($120K), and a B2B marketplace with escrow payments and vendor onboarding ($140K). Each of these included design, development, testing, deployment, and 30 days of post-launch support.
Enterprise Application - $150,000 to $500,000+
Enterprise projects involve complex business logic, multiple system integrations, strict security and compliance requirements, and often need to handle thousands of concurrent users. You are looking at custom workflows, role-based access with granular permissions, audit trails, data migration from legacy systems, and often a dedicated API layer for third-party consumption.
At this tier, timelines stretch to 6-18 months. Teams grow to 6-12 people including architects, senior developers, DevOps engineers, and dedicated QA leads. The upper end of this range covers products like multi-tenant SaaS platforms, financial trading systems, or custom ERP replacements.
What Actually Drives the Cost
Nine times out of ten, the features list is not what makes a project expensive. It is the non-obvious factors that inflate scope. Understanding these will help you make informed trade-offs instead of cutting features blindly.
- Number of integrations - every third-party API adds 40-80 hours of work including error handling, rate limiting, and data mapping. Connecting to Stripe is straightforward. Connecting to a legacy ERP system that uses SOAP and has no documentation is a different story entirely.
- User roles and permissions - a single-role app is dramatically simpler than a multi-role system. Each additional role multiplies the number of UI states, access rules, and test scenarios by roughly 1.5x.
- Data complexity - an app that stores simple records is different from one that requires real-time sync, version history, multi-currency support, or complex relational data with dozens of interconnected entities.
- Compliance requirements - HIPAA, SOC 2, GDPR, and PCI-DSS each add 15-30% to the total cost through encryption requirements, audit logging, access controls, and documentation.
- Performance requirements - supporting 100 concurrent users is trivial. Supporting 10,000 requires load balancing, caching strategies, database optimization, and often a different architecture entirely.
Why Hourly Rate Alone Is Misleading
A developer charging $50 per hour sounds cheaper than one charging $150 per hour. But that comparison ignores the most important variable: how many hours does it take? A senior developer who charges $150 per hour and builds your feature in 20 hours costs $3,000. A junior developer at $50 per hour who takes 80 hours - and introduces bugs that need another 30 hours to fix - costs $5,500 and delivers a worse result.
We see this pattern constantly. A client comes to us after spending $40K with a low-rate offshore team, only to find the codebase is unmaintainable. The rebuild costs $60K. Their total spend is now $100K for a product that could have been built right the first time for $70K. Hourly rate is an input. Total cost of ownership is what matters.
What to Compare Instead
- Total estimated cost for the complete scope, not hourly rate times a guess at hours
- What is included in the estimate - does it cover QA, project management, deployment, documentation?
- The team composition - how many seniors vs juniors? Who reviews the code?
- Post-launch support - is there a warranty period? What does maintenance cost?
- Reference projects of similar complexity - ask for examples with actual budgets
How to Get an Accurate Estimate
The accuracy of your estimate depends almost entirely on how well you define the project. A vague brief produces a vague estimate with a wide range (and agencies will pad the upper end to protect themselves). A clear brief with user stories, priority tiers, and a stated budget range produces a tight estimate you can actually plan around.
Start by writing down what your users need to accomplish - not what features you want. "Users need to book appointments and receive confirmations" is better than "we need a calendar with drag-and-drop, color coding, and Google Calendar sync." The first describes the outcome. The second prescribes a specific implementation that may or may not be the most cost-effective approach.
Then get three quotes. Not one, not seven - three. With one quote, you have no reference point. With seven, you will spend weeks in evaluation calls. Three gives you enough signal to spot outliers and understand where the market sits for your specific project.
The Cost of Waiting
One factor that rarely appears in pricing discussions is the cost of not building. If your team spends 20 hours per week on manual processes that software could automate, that is $50,000+ per year in labor costs (assuming a blended rate of $50 per hour). A $75K software project that eliminates that manual work pays for itself in 18 months. Every month you delay, you are spending money on the problem instead of the solution.
The same logic applies to revenue. If a new product could generate $30K in monthly recurring revenue and it takes 4 months to build, every month of delay costs $30K in unrealized revenue. Factor this into your decision when comparing the cost of building now versus waiting for a cheaper option later.
Bottom Line
Custom software in 2025 costs between $15K and $500K+ depending on scope, complexity, and team quality. The majority of business applications fall in the $50K-$150K range. Focus on total cost of ownership rather than hourly rates, define your project clearly before asking for estimates, and always factor in the cost of the problem your software is solving. That context turns a pricing conversation into a business decision - which is exactly what it should be.
