Figuring the costs of custom mobile business app development
(Last updated July 17, 2015. Originally posted July 7, 2012.)
Business App Development Costs
We like sources that provide specific numbers and a methodology for arriving at them. Here are some of the better sources we’ve identified.
App development company pricing
An analysis by Ken Yarmosh of Savvy Apps, an app development agency, provides several interesting data points. First he approaches the question from the point of view of a startup company — how much funding will they need to raise and budget for app development? He cites two different sources who suggest ranges from $90,000 to $210,000. Writes Yarmosh:
Apps built by agencies like savvy apps cost anywhere between $150,000 to $450,000.
He positions that as an intermediate price point between the “big boys” who charge up to $1M and the “small shops” that can cost as little as $50,000.
In-house app development costs
What about the cost of in-house mobile app development? A November 2014 Kinvey report based on a survey of CIOs and Mobile Leaders found that mobile application development is “costly, slow and frustrating.” According to this survey:
56 percent of mobile leaders surveyed say it takes from 7 months to more than one year to build one app. 18 percent say they spend from $500,000 to over $1,000,000 per app, with an average of $270,000 per app.
App development cost calculators
Calculating the cost of a hypothetical project on iOS and Android
Mobile app and platform companies are now offering calculators that let you specify the features you need and see a ballpark estimate of how much your app will cost. We ran a hypothetical app project through each calculator, answering the questions to represent the kinds of features and complexity we see in our own customers’ high-end mobile solution requirements.
Our example project is for iOS and Android and includes login authentication, complex business logic and UI, offline functionality, and backend connections. Keeping the estimates parallel was an inexact science because they each ask different questions, but we made the effort. Below are the results.
Otreva calculator site: $360,000
Tusnua Designs: €215,000
Note: This calculator that can generate an estimate over a million dollars if you keep adding features. Our first effort to calculate an app with similar features rang up at $473,000, which seemed out of line with the other calculators. A little investigation revealed that a single feature we had selected — workflow — accounted for over over $200K of that total. Our revised estimate without workflow (“a 5-10 step process that involves complex enterprise business logic and decisions”) yielded the more typical estimate of $267,000.
This Kinvey estimate was for the price of building the apps yourself. To be fair, Kinvey also calculated the lower cost of $139,000 to build the app using their own BaaS platform. The level of detail available in the report exceeded all other calculators we tried, and we were even able to generate a link so you can see the choices we made that resulted in this estimate. Check out our example estimate >>
Kony calculates the 3-year total cost of ownership. Like Kinvey, Kony also suggests the same app would be substantially less expensive ($133,000) on their own MADP platform.
More on App Development Costs
A survey of 12 “leading mobile application development companies” by Clutch found that “the median cost range is between $37,913 and $171,450, but could climb up to $500,000 or higher.” The report, released in January 2015, includes detailed breakdowns of cost drivers both as estimates and as descriptive quotes from the development company representatives.
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.
Ryan Matzner of Fueled, a New York City mobile development shop, in February 2015 described a typical app as costing around $150,000 at his company. He broke it down as two developers (mobile and backend) working full time for 8-10 weeks, plus a designer, an art director, a project manager and an account manager all working less than full time.
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.
Companies are under tremendous pressure to develop and deploy mobile apps for their business systems, yet the traditional approach to mobile app development typically costs $250K+ and takes 6+ months for a single app.
Based upon complexity, the initial costs to develop a native enterprise application for one mobile device platform can range from $50,000 to $250,000. Those costs grow exponentially if you need that app to support multiple mobile device platforms.
Continuing costs after 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.
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.
What about mobile platform costs?
A lot has changed in this space since we first published this blog post in 2012. Then all the talk was about Mobile Enterprise Application Platforms (MEAP). Since then the terminology has changed and the new mobile platforms are called Mobile Application Development Platforms (MADP) and Mobile Backend as a Service (MBaaS). Also since then Antenna, Sybase and Verivo have gone away.
Pricing is not transparent for most of these solutions, but 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.
Kony is one company more transparent pricing. As of June 2015 Kony pricing starts at $15/user/month for one ‘multi-channel’ (phone/tablet/desktop) app, or $29/user/month for 5 apps. In both cases a 50-user minimum applies, so $750/mo is the price of entry, not counting development costs.
Historical pricing note: 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 ran $30,000 per year, or $60,000 per year for unlimited users. This appeared to cover server licensing only.
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 Microsoft Dynamics and pay a monthly fee per user rather than developing custom apps. Salesforce’s most popular sales edition is $125 per user per month, Microsoft Dynamics CRM starts at $65 per user per month.
There are subscription options for custom mobile apps too. Salesforce offers its Salesforce1 platform, for example, and Kony offers MobileFabric enterprise apps. Salesforce1 costs $80 per user per month for up to 10 apps, or $150 for unlimited apps. Kony costs $29 per user per month for 5 apps, or an undisclosed amount for unlimited apps.
Better than a subscription: Formotus license-months
The Formotus service starts at $40/user/month and goes down with volume. But this is not a subscription with a set number of users for a set period of time. Instead customers purchase a package of license-months to be used as needed for as long as they last, sort of like prepaid cell phone minutes. For example a package of 100 license-months ($35 each) could last 10 users for 10 months or 50 users for 2 months. Usage is pro-rated to the day so customers can add and remove users at any time without penalty and never pay for ‘ghost users’ that aren’t actually on the system.
This license-month 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 code-free tools to create custom mobile solutions, this is the only cost. Even when customers choose to engage Formotus or one of our partners create the solution, that typically amounts to just a small fraction of the cost of coded app development.