What does software cost? Budgets by project type

Why there's no single answer to the price question

The question "What does a piece of software cost?" is about as hard to answer as the question of what a building costs. A warehouse shelving unit and an office complex are both construction projects, yet they're a hundred times apart in price. Software is no different: a small internal tool for one department and a multi-tenant SaaS platform with several thousand users are technically related, but cost fundamentally different amounts.

Still, budgets can be roughly bounded by project type once you know which factors determine price within a category. The overview below sorts typical projects at mid-sized companies by budget range and links to the relevant category page for more detailed figures. It doesn't replace a concrete proposal, but it gives you an order of magnitude you can use to request internal budget approval before contacting an agency at all.

Hourly and daily rates for context

German agencies typically bill €100 to €180 per hour for software development, which works out to €800 to €1,400 per day. Specialized areas like cloud architecture, machine learning, or IT security tend toward the upper end of that range, while standard web and app development sits more in the middle. Freelance developers are cheaper at €80 to €120 per hour but don't bring a team or backup coverage. Nearshore teams with German project management, for example from Poland, Portugal, or Romania, fall in between at €60 to €100 per hour.

The hourly rate alone says little about total cost. An agency charging €180 an hour but with a well-practiced process and little rework can end up cheaper than one at €120 that needs twice as many hours because unclear requirements lead to rework. A more telling question than the rate itself is how the agency arrives at its effort estimate and what experience it has with comparable projects.

Budget ranges by project type

Within each row, the actual figures vary widely. For a website, for example, a compact corporate site built on a standard CMS costs €5,000 to €15,000, while a multilingual website with custom functions and a deep SEO concept runs €15,000 to €50,000. For custom software, internal tools cost €15,000 to €40,000, customer portals and system integrations €40,000 to €150,000, and platforms with multiple roles and compliance requirements start only from €150,000. The linked category pages break down these tiers in detail, each with the criteria that separate one tier from the next.

What determines the price within the range

Four factors explain most of the price differences within a project type. First, the number of systems the new software has to talk to: every additional interface to ERP, CRM, or inventory management means extra work for integration, error handling, and testing. Second, compliance requirements such as ISO 27001, TISAX, or provisions from the EU AI Act, which demand additional documentation and review steps. Third, the number of user roles and permission levels, because each role needs its own interfaces and access logic. And fourth, where the team is based, see the hourly rates above.

An example: two companies each have a customer portal built. The first connects only to an existing CRM and has a single user role, with a budget of around €45,000. The second also connects ERP and a payment system, distinguishes between three roles with different permissions, and needs GDPR-compliant data processing agreements (DPA) with all service providers involved. Despite a comparable basic idea, the second budget comes to about €110,000.

A fifth factor comes into play with existing systems: the condition of the current software or data. Migrating from a well-maintained, well-documented database is considerably cheaper than replacing a spreadsheet system that grew over years with inconsistently recorded data, which first needs cleaning up before the new application can work with it. If in doubt, have an agency give you a rough assessment of this point before you send a request; it's otherwise easy to overlook.

Ongoing costs after launch

Development costs are only part of the bill. For maintenance, security updates, and minor extensions, plan for an additional 10 to 20 percent of the development budget per year, or 15 to 25 percent for app projects, since two platforms force new versions every year. For SaaS products, ongoing development after launch often makes up a larger share of total cost than the initial build itself.

Depending on the project type, ongoing operating costs come on top: cloud infrastructure, platform licenses for low-code solutions, or model costs for AI applications that scale with usage volume. For a cloud migration, for example, the actual infrastructure costs come on top of the €20,000 to €80,000 project budget and keep running independently of it. A reputable agency will work through these follow-on costs with you before the project starts, based on your expected volume, rather than mentioning them only after launch.

Setting a realistic budget before you send a request

Before you approach agencies, a rough self-assessment using the table above helps you see what order of magnitude your project falls into. Ask yourself which of the eight project types comes closest to yours, and whether the lower or upper end of the range is more realistic, for example based on the number of systems that need connecting. A realistic budget in your request noticeably speeds up the process: agencies can immediately judge whether your project fits their minimum budget, and everyone avoids proposals that miss the mark in either direction. A project request without any budget figure, by contrast, often leads to proposals that either come in well above your expectations or quietly cut scope to fit an assumed number.

For how to document requirements upfront so the budget estimate is actually reliable, and how to compare the proposals you receive afterward, see Comparing agency proposals.

Why the cheapest-looking proposal is rarely the cheapest

A low price often just pushes costs back in time. Cutting corners on the requirements phase leads to expensive change orders later. Cutting corners on testing leads to bugs in production that cost more to fix than the original savings. And cutting corners on documentation makes every later extension by a different agency more expensive, because nobody can get familiar with the system without significant effort.

A proposal that sits noticeably below the ranges named here isn't automatically a warning sign, but it deserves a closer look: which team actually works on it, what's included in the price and what isn't, and how the final handover gets documented. A proposal with no testing phase or no documentation at all is often not calculated more cheaply, just incomplete, and the missing items resurface later as extra costs.

A realistic comparison therefore looks past the bottom-line number to what's actually included in it. Two proposals with a similar price can still differ significantly in scope, test coverage, and rework.