Figuring the costs of custom mobile business app development
General app development costs
Forrester Research took an early stab at estimating the cost of developing an iPhone app, and said most apps take at least six months of full-time work and cost between $20,000 and $150,000 to develop. That’s a pretty wide range, and it’s a pretty old estimate from 2009.
A 2010 article at padgadget.com provided a good discussion about creating your own apps, and broke the costs down like this:
For a nice but simple app, the design work will likely take a designer about a week, which will cost you about $6,000. The server side will likely require a developer about 2 weeks of work, or about $12,000. Similarly, the app could be written in about 2 weeks as well, another $12,000. Add $5,000 for project management, hosting fees for a year, debugging, unforeseen delays, and your total budget is around $35,000.
The author continued to point out that a high-end app like a game could easily run over $200,000.
Similar generalizations were made about Android in 2012 by a two different developers: “An app that takes about six weeks (low to average complexity) would be about $35,000. This is probably on the low to mid end in the range of quotes.” And: “When we are asked for the cost of an “average” app, we say $30-$40K, along with a caveat that there is no such thing as an ‘average’ app.”
The problem with these and other similar estimates (like these and these and these) is that they are generally talking to an audience interested in developing consumer apps to sell in the app stores. It’s not clear how these discussions pertain to the very different kinds of apps that businesses are looking for to facilitate their own business processes using mobile devices.
Business app development costs
Update: A survey of IT professionals conducted in 2013 by AnyPresence, a backend-as-a-service company, asked about the initial cost of developing a typical mobile application. Over half reported spending more than three months and over $50,000 developing a typical app. Very nearly a quarter reported spending over $100,000.
App development company Propelics specializes in iPad apps and posted a very informative blog post in December 2011 with a breakdown of iPad app development costs. This is recommended reading on the difference between consumer and enterprise apps. In a nutshell, Propelics describes three levels of complexity in enterprise apps corresponding to three price ranges:
- Simple Enterprise iPad App Development Cost: $50,000 (+/- 20%)
- Medium Enterprise iPad App Development Cost: $100,000 (+/- 20%)
- Complex Enterprise iPad App Development Cost: $150,000 (and up)
Features that bump an app into the $100,000 range include a branded and highly tuned user experience, and integration that leverages your existing enterprise capabilities. For real-time integration, mobile device management (MDM) and mobile application management (MAM) infrastructure, you enter the $150,000+ category.
In a late 2012 webinar Propelics reiterated these figures in the context of mobile budget planning for 2013.
An October 2012 post provided some very detailed estimates by the CTO of 5App and his conclusion:
It’s safe to assume that using traditional development techniques to create a cross-platform enterprise app won’t come in under £100K.
He lays out a grid splitting out costs for design, development and testing on one, two or three platforms for four app categories. Here are some example estimates (converted from GBP to USD for comparison to other estimates here):
- An app that extracts data from a database and displays it in a simple list can be expected to take 4-8 weeks to create at a cost of $26,000 on a single platform.
- An app with more complex server-side integration and offline data caching will probably take 8-12 weeks and cost $71,000 to develop for two platforms.
- A full-scale enterprise automation app with integration to business processes will take anything from 3-6 months and may cost over $150,000 to develop on three platforms.
An October 2012 analysis of why enterprise apps fail begins with this rather revealing anecdote:
The head of digital for a major UK interactive agency shut the door and slid the iPad across the table with a pained smile. Her team had developed an app for a major financial services firm. $140,000 and six months later they were about to start again. The client was, unsurprisingly, unhappy.
Web applications in a browser are an alternative to native app development. Comentum, a company that does Web application development, has published an analysis of different types of Web development companies. Projects using “Moderate Class” development companies are said to range in cost from $7,000 to $150,000, putting Web application development in a similar range to native app development.
Continuing costs after app development
It would be a mistake to think of app design and development as a one-time cost. As Art Wittmann wrote in Information Week:
The short-term investment in creating those first pristine apps is likely to be the tip of the iceberg in terms of people and capital costs. Whether you're using internal teams for development or contracting with coding houses (a practice that brings its own set of challenges), you'll need to make a sober assessment of the short- and long-term costs of supporting the practice.
Forrester estimated in 2012 that the average amount spent on a typical customer mobile app ($50,000 to $150,000) turns out to be just 35% of the true two-year cost.
Update: According to the AnyPresence survey cited above, over 80% reported updating their apps at least twice a year and nearly a third were updating at least once a month.
An app developed today will need to be updated in the future for changing business processes and for operating system updates. It will need to be ported to any new platforms you want to support. According to MGI Research, most mobile apps will experience at least four major update cycles stemming from operating system and device updates in the 2012-2014 time frame.
Moreover, there are ongoing costs associated with distributing apps and updates to employees. Anyone planning to develop multiple business apps might want to engage a mobile application management vendor such as App47 or MAAS360.
Also, if your strategy for cross-platform app development is to use a framework such as DragonRad, be sure to include any ongoing subscription costs in your calculation.
What about mobile enterprise application platform (MEAP) costs?
A number of companies offer middleware server platforms to deliver mobile application solutions with more or less programming involved. Some of the prominent MEAP vendors include Antenna Software, IBM Worklight, Kony Solutions, Verivo (formerly Pyxis Mobile) and Sybase Unwired Platform.
In June 2013 Verivo announced a new MEAP platform called Akula along with some pricing information. A production server for up to 100 mobile users runs $30,000 per year, or $60,000 per year for unlimited users. This appears to cover server licensing only.
Pricing is not transparent for most of these solutions, but one mobile analyst Kevin Benedict wrote:
Upfront, getting-started costs are important to understand. I know some mobile platform vendors that want to charge you hundreds of thousands of dollars worth of platform before there are any mobile apps. To me this is difficult to swallow. There is no ROI on a mobile platform without apps. I would rather pay for the platform as part of an app. I want to pay when my ROI starts.
An alternative to app development: Subscription software services
App development and management costs can be avoided by companies whose needs can be met instead with software-as-a-service (SaaS) offerings. For example, companies needing mobile customer relationship management (CRM) solutions can subscribe to Salesforce.com or soon Microsoft Dynamics and pay a monthly fee per user rather than developing custom apps. Salesforce starts at $65 per user per month, and Microsoft Dynamics CRM costs “as little as $44″ per user per month.
Formotus pricing is also by subscription, starting at $45 per user per month and sliding down with volume. This price is all inclusive for as many custom business apps as you want to create, deploy, update and use:
- No activation or sign up fees
- No additional charges to create, deploy and use as many forms as you want
- No additional Formotus software, server or maintenance charges of any kind
For customers who use our platform to create custom mobile solutions without coding, this is the only cost. When customers choose to have Formotus or one of our partners create the solution, that typically is just a small fraction of the cost of coded app development.
Formotus custom business forms work across platforms, are optimized for offline use, and are fully controlled from the cloud. The capabilities of these forms include leveraging existing backend systems, creating highly tuned user interfaces, and managing the complete life cycle of each Formotus form — eliminating the costs of MAM and MDM. Employees can use Formotus on their own BYOD devices, and the employer stays in full control of updating or removing the apps remotely.
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