App Development Cost or Dollars per Month
July 12, 2023
If someone asks "How much does it cost to build an app?", what answer do they expect? Probably the answer should be a number. If so, a number of what? Well, the cost is measured in dollars, right?
While for a one-time purchase the cost is in dollars, building an app is not a one-time expense. In fact, building and maintaining the app is an ongoing process, so its cost is measured in dollars-per-month.
It should come as no surprise for a business person, as the cost of running a business is a certain amount of expenses per month. And as long as the monthly income exceeds the monthly expenses the business makes a profit. Business people usually do not think in terms of "dollars", instead they think in terms of income and expenses as in "dollars per month" and "dollars per year".
Fixed Price As Budget Type
Still wouldn't it be wonderful to have a "fixed cost" app development budget? Wouldn't it be great to spend say $100 000, and in say six months to have an app be ready. And then being able to use the app year after year without spending any extra money on it.
Alas, anything human-made needs some maintenance to stay useful. Without maintenance things surely start falling apart.
There are differences, of course. Say a silver spoon, if not broken, can be used without maintenance for hundreds of years. Though people used to polish their silverware, even if just for looking more shiney. Anything more complex, a device with moving parts, a machine, an electronics device - has much shorter lifetime, even shorter without proper maintenance. And software technology is the most notorious in that regard.
The car without maintenance may become rusty and eventually fall apart. But the app cannot rust - the software is free of real world decay, it can be perfectly preserved, it can stay the same indefinitely. However, an app without maintenance, while staying exactly the same, will become obsolete. And an obsolete app becomes unusable as much as a rusty car.
Continuous App Updates
The software exists within infrastructure, it is connected to other apps, it depends on other apps and systems. And all those systems are being constantly updated.
- There are new regulations issued by authorities, requiring apps to follow certain requirements or new standards,
- There are new security updates for the critical parts the app rely upon,
- There are new requirements by the platform owning company (Google or Apple).
The service provided by the company may be growing, depending on new features added to the app. And there are competing companies with similar services and similar apps, updating their apps all the time. The app may be still perfectly functional, but has an "old look", does not feel "modern". Or maybe the competing app offers some new cool feature. And unless you keep up, your users may start switching to a competitor service.
There is a technology race and a competition race. Both being unavoidable, they require the app to be continuously updated to stay relevant.
App Development Weekly Cost
In practice an app owned by a small business could be:
- Actively developed - lots of new features being added - large team with 10+ engineers, weekly cost more than $20k,
- Just developed - normal speed, regular features and updates - team of 3-8 engineers with weekly cost $5-15k,
- Only maintained - just the necessary updates, minimal new features - small team - 1-2 engineers, weekly cost under $2k,
- Dead in the waters - the app probably already stopped working, but no one noticed, as no one uses it anyway.
Larger companies usually have many apps (projects) with many teams working in parallel, spending hundreds of thousand dollars per week on their apps development.
Overall, the cost in relation to app development is always a weekly or monthly cost, not a fixed amount. The monthly expenses for app development/maintenance may change significantly over time, but they are never zero.
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