• Link copied

The business landscape is becoming more and more dynamic. Businesses have to find a way to remain competitive, and that's how custom software development companies come into play. 

In this article, Software Outsourcing Journal will explore the ins and outs of custom software development, its pros and cons, different types of services, and how you can choose an ideal partner to elevate your business. So, keep scrolling down to learn! 

What Is Custom Software Development?  

Custom software development refers to the process of developing software that has tailored features to satisfy certain needs of target users. 

Custom-made software works best in a given business or department due to its unique features. Companies can use it for different purposes, such as:

  • Avoiding duplicate work
  • Automating manual processes¬†
  • Reducing manual errors
  • Enhancing resource management¬†

Many companies partner with the best custom software development companies to build custom software apps because of their efficiency, reduced costs, independence, and scalability. 

Firstly, the software is surely efficient because it aims to serve particular business needs. Companies can also get independence as they manage the apps themselves. And in terms of cost, businesses can save money in the long term, although the investment seems big. 

Owing to the benefits above, this type of digital solution is growing significantly. Its market size value in 2023 was $35.42 billion. It can even grow with a CAGR of more than 22% from 2022 to 2030. 

What Is A Custom Software Development Company?

Custom software development companies are businesses that customize software apps for their customers. It means they offer custom software application development services and products tailored to their customer needs. 

Those companies provide a wide range of services. For example, they can develop a software product from scratch or just offer IT consulting services to help businesses grow. So, remember to consider your needs to go for the most suitable custom software development service. 

The customized rates vary depending on customer needs. You need to claim your requirements at the beginning of the project so that your partner can easily customize the software according to your demand. 

The budget and time frame also play a vital role in your collaboration with the custom software development agency because they act as the guidelines for the whole project. 

Pros And Cons Of Using Custom Software Development Companies

Businesses of all sizes opt for custom software development services for better return on investment and flexibility. However, they have to deal with the higher upfront investment and maintenance costs. Here are some pros and cons of using custom software development companies. 


You will be surely impressed by the numerous custom software development service advantages. The most outstanding ones are as follows: 

  • Better Return On Investment¬†

The app is designed specifically for your company. If you go for this solution, your app will come with all the necessary features you require, enhancing efficiency and reducing operational costs. Thus, it will offer a higher ROI (Return On Investment) in the long run. Outsourcing services can even help businesses reduce operational costs by 60%.

Moreover, while off-the-shelf software needs you to pay licensing fees, custom solutions don't. Hence, the ROI offered by custom software development can beat the cost-to-revenue ratio of other services. 

  • Tailor-made Solution¬†

One of the best things about custom software application development is that you can get what you want. It comes into play when you need particular features for your unique needs. 

At the beginning of the project, the custom software development agency will study your requirements to understand what you need from the software. Then, you can even optimize the product by adding extra features during the development process. 

Many outsourcing companies are available in the market. You can check their portfolio, development process, methodologies, and technology stack to see if they fit your requirements and build a perfect app to suit your business.    

  • Greater Scalability

Since the app is tailor-made, you can ask your partner to scale it up as your business grows. Please note that technology keeps evolving, and you expect the same thing for your business. Hence, keep your websites and software updated to satisfy your customers' needs. 

  • Enhanced Reliability

If you buy off-the-shelf software, you will depend on the company's terms, conditions, and pricing. Once that company halts upgrading the product, it must be hard for you to find alternatives. 

On the other hand, if you use custom software, you just need to care about maintenance costs. The app allows you to work freely and comfortably for as long as you need. 

Furthermore, you have time to research your partner. And once you choose them, you can trust their experience and skills. Talented developers can build reliable products for your business. 

  • Improved Security¬†

Security must be among the top concerns when building software. More than 95% of websites these days face security vulnerabilities. But if you choose custom services, there will be fewer things to worry about. Why so?

First, the custom-made apps come with customized security features. Thus, they can deal with the expected issues of your business. Data protection can also be improved.

Second, the developers are supposed to update the apps for you. This simple approach is necessary to mitigate potential risks. 

  • Control And Ownership¬†

Some businesses using off-the-shelf software complain that they don't possess complete ownership. As a result, they can't monetize the product. Licensing costs are another big issue. 

Fortunately, custom software gives you complete control and ownership. Thus, it enables immediate decision-making. You can also adapt it to meet different needs. No extra licensing costs are another plus. 


This solution offers tons of benefits, but there are still some custom software development service disadvantages to discuss. 

  • Higher Initial Cost

Custom solutions are generally more costly than commercial ones. In terms of software development, you need to pay for tailored features and technical expertise. Thus, the initial investment is high. 

Luckily, you can save your money in the long run. Also, remember to choose reliable developers who offer you a good deal. 

  • Longer Development¬†

Building tailored software takes a lot of time because the developers have to analyze your requirements, design the prototype, create the app, and test it. This time-intensive process may encounter delays, too. So, to optimize the speed-to-market, you should expect the challenges and learn how to carry out our project efficiently. 

  • More Involvement¬†

Custom software development calls for more involvement from your management team. You have to join any stage of the project to ensure it's going well. But this involvement is what you need to build custom-made software. The result will not disappoint you. 

  • Uncertainties¬†

This type of service sometimes comes with uncertainties because of the intricacies of the development process. For example, while developing the software, the project scope may change. Your initial vision cannot remain the same after that. So, project management is vital to ensure the project outcome.  

Services Offered By Custom Software Development Companies 

A custom development company offers different services depending on your needs. The most common options are as follows:  

Software Product Development

If you choose the software product development service, you can build a new software product from scratch or add it to any existing project that requires a creative touch. 

The ultimate goal of this service is to offer and ensure the highest level of discipline to give you a high-quality product while avoiding wasted money and time. To do that, the outsourcing company starts with your ideas. They also analyze customer behaviors to find the best solution. 

After the research stage, the developers design the product structure, which includes its key elements and storage networks. 

Once everything is ready, they will conduct software development. They break down the project requirements into manageable tasks and detailed items. This way, they can estimate the timeframe and track the project's progress. 

The next stage is testing. Since quality and security are vital for any software product, the developers must check the system and fix bugs carefully before releasing it. 

Enterprise Software Development

B2C and B2B require complex apps to run their business and perform technical tasks. In this case, they partner with custom software development companies to build enterprise-level software. 

There are many cases where this custom software development service is in demand. For example, your business may struggle with data analysis or resource arrangement. In the era of technology, you can possibly handle those tricky tasks using an app, and that's how enterprise software development services can save your day. 

If you choose enterprise software development service, you can then ask for software maintenance and support. Most custom software development businesses offer post-deployment services. Thus, you can rely on them to ensure your software is always bug-free, updated, and aligned with your changing needs. 

SaaS Development

SaaS (Software as a service) refers to a distribution model that helps you access apps over the Internet. The best thing about this model is that you don't have to maintain the apps on your devices. 

So, SaaS development is the process of building software apps using the SaaS model. The SaaS app development service allows businesses to optimize their cost and time. They can also easily enjoy the latest technologies. All these benefits allow SaaS to grow sharply. Revenue in SaaS software is expected to reach $282.2 billion in 2024. 

There are many custom software development services included in this category. For example, you can ask your outsourcing partner to design SaaS apps or consult for SaaS solutions. If you only want to develop your existing SaaS app, your partner can also help. 

Software Integration And Modernization

No company works with only one software solution. In this case, they choose software integration services so their tools can communicate smoothly. This way, they can improve data flow and minimize operational issues. 

Software modernization is important, too. You should consider software modernization services to transform your outdated systems. After the checkup, the latest methodologies will surely help you gain a competitive edge in the market. 

IT Consulting

Finding digital solutions that boost productivity and optimize user experience is tricky. But don't worry! You can nail it by asking IT experts. 

From 2012 to 2022, the IT consulting field witnessed a sharp growth of more than 30%. Many outsourcing agencies provide IT consulting services to help their customers improve their software performance. To do that, they determine challenges and find opportunities to recommend the most effective digital solutions. Their expertise can also help you avoid security problems. 

Quality Assurance

QA (Quality Assurance) involves software testing to ensure that the product meets all requirements. It guarantees the product's quality and avoids bugs, creating a positive user experience. 

There are two main types of QA testing: manual and automated. In the manual approach, the QA analyst performs the checkups by hand and ensures the software has all the needed components. Meanwhile, automated testing involves test scripting. The testers use code to perform the analysis. Hence, this method can save more time than the manual one. 

What Is The Average Cost Of Custom Software Development?  

Custom software development service solutions may cost from $20,000 to more than $200,000. The price range is wide because many factors affect the cost. 

Project Size And Complexity 

Hiring developers to build an app from scratch costs differently from asking for IT consulting services. The price will vary as a result. 

Often, the average cost of running a small custom software development project is from $20,000 to $50,000. The mid-range project may cost up to $200,000. And if you want to join a large-scale one, your budget should be larger than $200,000.  

Startups typically choose small projects and use MVP development methods to test their projects in a small customer base. Meanwhile, enterprises are more willing to go for large-scale projects because they work with more complex processes. 

Complexity Of The Software

Each custom software is unique because it aims to serve particular needs. The complexity, number of features, screens, and workflow also affect the price of the software. Generally, the more features the app has, the more costly it is. 

The type of software plays a role, too. Education apps often cost less than automotive ones. Meanwhile, the healthcare industry is huge, so there are many options with different prices to consider. They can be cheaper or pricier than others. 

Technology Stack

The tools developers use to build your app can impact the price, too. You may want them to work with the latest technologies to maximize the app's performance, which means the development will increase. 


Custom software development costs vary by region. The average salary for a software engineer in Japan is around $69,946, while the figure in Canada is up to $93,096. Hence, remember to research region rates before choosing your partner. 

Target Platforms

Do you want your software to work on websites, mobile apps, or desktops? Your decision is important as it determines the operation system that your software should be compatible with. The cost will then vary. 

For example, an app on Android devices must be suitable for more screen sizes than the one on iOS. Custom software development companies must know the target platform to build the app properly. 


UI/UX design helps you picture the apps' graphical elements, such as buttons, fonts, user interfaces, and functionality. Up to 74% businesses believe that user experience is necessary to boost sales. Thus, they do not hesitate to invest in UI/UX design. 

You need a good UI/UX to ensure intuitive interaction and a smooth experience, too. And, of course, a better product requires a higher cost. 

How Do You Choose The Best Custom Software Development Company? 

Since the demand for custom software development services is rising, there are now many providers in the market. So, how can you choose the best custom software development companies? 

Define Your Goals

First, you should know what you want to do. For example, if you aim to develop a software app, start by planning what you will use it for and which features it must have. If possible, sketch a diagram or workflow so developers can easily picture your idea. 

Check Different Software Development Firms

Next, check different options to find the best one among them. You can research companies by asking your network or searching on Google. Here is what you need to focus on when checking your custom software development firm  list: 

  • Location

Language barriers may give you a hard time communicating with your partner. Moreover, the cost of custom software development is different from region to region. Thus, you need to consider geography when choosing your provider. 

  • Portfolio

You can then narrow down the list by checking the company's portfolio. It helps you determine the technology skills, project scale, and other factors that are important for your project. 

Experience in the industry is vital here. If your partner has worked in your niche, they can easily learn the competitors and trends. Hence, they can save money, effort, and time while getting the best results. 

Don't forget the tech stack! You may need multiple stacks to develop your tailored app. Thus, find the type of customizations that fit. Please note that each type has its own benefits and drawbacks because they include different tools. The staff using them should also have certifications to bring out the best of their performance. 

  • Services

As mentioned above, there are various custom software development services. Every company lists what they offer on their official website. So, you can check to see if your potential partner has what you need. 

  • Customer reviews

Read customer reviews on the companies, too. The testimonials may be written letters or reviews on third-party websites. The feedback provides you with insights into the services they got from the providers. 

  • Communication

Since you want to build a custom-made software app, you have to get involved in the development process. That's why communication is key to success. 

When choosing the best custom software development company, find one with communication skills to ensure your project runs smoothly. Even if there are changes in the software continuously, everyone in the project can be on the same page. 

Discuss Pricing 

Price matters. The tailored solutions may differ in price due to various reasons, as discussed in the previous section. While saving is important, it's not a good idea to sacrifice quality. 

So, do not go for the lowest-price option, or you may encounter technical issues in the future. Instead, be open to paying a higher upfront cost. You can then save your money in the long term.  

Consider Security

When asking external developers to build your app, you may give them access to your business data. So, be sure to ask how they plan to work with sensitive data. 

Also, check which security measures they use. This aspect is crucial especially when you are handling PCI or HIPAA data. Remember to ask your partner to obey the regulations and comply with the standards strictly. 

Talk About Post-Development Support

Your partnership won't end even when the software is built. Many companies try to offer their customers the best experience with their post-development support. The best custom software development company should have this service. 

Remember that you want your app updated to fit changing needs. Moreover, bugs and errors may show up at any time. In this situation, you need experts to address the problems. 

Discuss Contracts

The contract entails cost, adaptability, and efficiency of your project. There are many contract models to consider, such as: 

  • Time and material contract: If you choose this contract, you just need to pay for what you exactly get. It's aligned with your shifting requirements and not strictly claimed from the start, making it a perfect choice for those with ever-changing demands.¬†
  • Staff augmentation: This contract is suitable if you need specialized skills in a short period to meet certain requirements. This way, you can avoid obligations related to long-term staff hires.¬†
  • Dedicated development team: This model suits complex projects requiring specialized and consistent expertise.¬†¬†
  • Project-based: Those with a clear idea of their project but don't have specialized staff can choose this contract. It allows you to keep your core competencies while achieving top-notch results on a specific project.¬†
  • Fixed-price: This contract works best when your project won't change in terms of requirements and scopes. Hence, you can control the budget easily.¬†

Final Thoughts 

Custom software development companies can deliver top-notch digital solutions to propel your business forward. There are pros and cons when trying this approach, but the benefits shine out. So don't hesitate to take your first step. 

Hopefully, Software Outsourcing Journal has helped you choose the top custom software development companies for your next project. If you need any further information, please feel free to ask!  


1. How long does it take to build custom software?

Generally, custom software development companies need from four to nine months to build a complete app. This time is needed to research, design, build, test, and release the app. 

2. What is the difference between custom software and commercial software?

Custom software includes all the features you need for particular purposes. Only a group of audiences or organizations uses it. On the other hand, commercial software is a generalized and standardized app created for the mass audience. 

3. Who owns custom software?

It depends on the agreement of the client and developer. Often, the client requests for ownership from the developer. But without a clear stating, the developer or the development company can retain the code's ownership. 

4. What is the life expectancy of a custom software?

The average lifespan of custom software is about six to eight years. It varies depending on the software's size, complexity, modularity, development support, and technology advancements. 

5. What does a software developer do?

A software developer writes code to build software. After developing, they troubleshoot and maintain the software to ensure it can work properly. They also meet with clients to learn their needs. 

6. Is custom-written software cheaper?

Custom software has a higher upfront cost than off-the-shelf solutions. However, it offers a better ROI in the long term.