Figuring the costs of custom mobile business app development
General app development costs
This post is primarily about apps for for mobilizing business processes, but if you are interested in the more general topic of app development costs here are some pointers:
Business app development costs
Update: 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.
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.
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.
We’ve now found four different websites designed to estimate the cost of developing an app. They each ask somewhat different questions about your requirements, which can be useful in thinking about what your requirements actually are. We ran an example app through each calculator, answering the questions to represent, best as possible, the kinds of features and complexity we see in our own customers’ high-end mobile solution requirements. In general this meant we required most but not all available features.
App development company Otreva has a calculator site to estimate the cost of developing an app based on features chosen. We entered features that seemed suitable for an enterprise app of the kind our customers typically need, for iOS and Android, and the estimate came to over $360,000.
Another calculator is available at Tusnua Designs, who generates an estimate of what they’ll charge to create your app for you. We generated an estimate for an iOS/Android app with similar bells and whistles, and the total came to around $300,000.
We tried out the app cost calculator at Kinvey, a Backend-as-a-Service company. This time we ordered up a large app with similar features for iOS, Android and Windows, and the estimate came out at $321,000.
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 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 >>
Finally, we tried the TCO estimator that MADP company Kony offers to determine the 3-year total cost of ownership of an app. Their estimate came in a little lower at $256,000. Like Kinvey, Kony also suggests the same app would be substantially less expensive ($133,000) on their own platform.
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.
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.
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 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.