What Is A Custom Software Development Company?

A custom software development company is an organization specialized in providing software services including programs, platforms and digital interfaces.

A custom software development company is an organization specialized in providing software services including programs, platforms and digital interfaces. 

These agencies conceptualize ideas and then create products that meet their clients’ specific requirements. They help brands improve their workflows and optimize their productivity. 

Their robust targeting and personalized strategies make it easier for brands to improve customer engagement and conversion rates while increasing their revenues. 

Software developers can also improve and personalize existing programs to meet an organization’s needs. 

Because they work on digital programs, custom software development companies can often work remotely, which allows businesses to hire the top teams worldwide, gaining access to a larger talent pool and minimizing the cost of development. 

According to Evans Data Corporation, in 2019 there were 23.9 million software developers and the number is projected to reach 28.7 million in 2024. 

Programmer working in a software development company
The number of software developers is expected to reach 28.7 million in 2024

What Does A Software Development Company Do? 

Top software development firms design, create, deploy and maintain solutions for a specific set of users, functions and organizations. 

They use different programming languages to create software that powers technology. 

Software developers create products that are usually referred to as “solutions” because they solve problems – from mundane personal to complex professional ones. These are mainly developed to facilitate a task or streamline processes. 

However, they also build software for entertainment purposes like computer games and gambling sites. 

Some of their primary responsibilities include: 

  • Creating websites, mobile apps and operating systems 
  • Designing software solutions which include product or platform conceptualization 
  • Integrating software with other systems 
  • Designing the UI & UX, i.e. how the interfaces look and feel to the users 
  • Paying attention to quality assurance (QA), i.e. testing a product before it goes live, or troubleshooting as part of maintenance 
  • Deploying it 
  • Maintaining it 
  • Providing post-launch support 
  • And more 

What Are The Different Types Of Software Development Firms? 

Considering the fact that software can serve virtually any industry and area of business, and technologies are so many and varied, there are many types of software companies that develop specific industry, platform, technical and/or technological expertise. 

Thereby, we can divide these innovative agencies into three categories. 

Based on their industry and field specialization software companies can be: 

  • Healthcare software companies 
  • Education software companies 
  • HR software companies 
  • Retail software companies 
  • Telecom software companies 
  • And more 

Then, we can also categorize them by platform and system type specialization: 

  • Web development companies 
  • UI/UX development 
  • App development companies 
  • Enterprise software companies 
  • eCommerce development companies 
  • IoT development companies 
  • AI and machine learning specialized companies 
  • Big data specialized companies 
  • And more 

According to the type of services they deliver, custom software development companies can be placed into two groups: 

  • Staff augmentation i.e. dedicated teams: These software companies hire and manage teams of IT professionals dedicated exclusively to your organization and can act as an extension of your in-house team. This is a type of long-term partnership. 
  • Project-based development: Companies that specialize in project-based development form shorter-term, one-time partnerships that last until the successful delivery of the client’s project or until the partnership is dissolved. 

What Is The Difference Between Custom-Written and Customized Software? 

The terms custom-written and custom software mean exactly the same: solutions developed specifically for your brand only. 

However, it is easy to confuse them with customizable off-the-shelf solutions. 

Off-the-shelf -or readymade- solution is generalized stock software for which businesses purchase licenses and which can be somewhat personalized. 

However, those small personalizations cannot compare with the benefits of custom solutions. 

In addition, off-the-shelf solutions typically require licensing fees in perpetuity for the duration of its use. 

Therefore, although off-the-shelf solutions may seem cheaper initially, those long-term costs can ultimately make it more expensive than custom solutions, which have higher upfront fees, but often lower long-term costs. 

How Much Do Top Software Development Firms Charge For Their Services? 

Top software development firms typically price their services per resource per hour. Therefore, these rates vary greatly depending on: 

  • Company location 
  • Number of resources 
  • Level of expertise 
  • Third-party charges 

The greatest factor in service cost is geography. South Asian companies can charge as low as $20 per hour, while North American companies can charge as much as $200 for their high-end expertise. 

Speaking of, expertise is an important factor in the service cost. Companies in any given location will command a range of prices, depending on the quality of their portfolios, management and resources – all of which will play a key role in the quality of their output. 

In terms of average project cost, the lowest start at $1,000 in Eastern Europe, Asia and South America. 

North American projects start at $5,000 and average at around $10,000. 

A few other factors that can also dictate the cost of custom software development companies include: 

  • The complexity of the project 
  • The number of experts working on the project 
  • The timeline 

Obviously, the more complex the project is and the more software developers work on it, the more you can expect to pay. 

5 Signs That Your Organization Needs Custom Software 

If it happens that you own off-the-shelf software but you are thinking about investing in a customized solution, you may be not quite satisfied with your current product. 

Here are a few signs that might support the idea that the readymade software you have is causing more problems than doing any good: 

  • Technology is leaving your brand behind: Your business is doing great but your competitors are offering more than you are. Customized solutions can help you get far ahead of them thanks to competition monitoring, deep data gathering and analysis as well as productivity increase via automation. 
  • Your current software limits your work: If you feel like your current product is not doing its job properly, then it is time to let go of it, especially if it causes problems and slows you down. 
  • There is an increased necessity for manual work: If you already own off-the-shelf solutions that require manual workarounds, it means that it decreases your productivity. Customized solutions can automate your manual processes. 
  • Reaching customers is getting harder: It goes without saying that customer relationships are important for your business growth. However, if you find it difficult to reach and manage them, then it might be time for a technological update. 
  • Your business is expanding: As your business grows, your software requirements will change and off-the-shelf products may become too limiting. Customized solutions may be the perfect option for you as these will scale along with your organization. 

7 Advantages Of Working With A Custom Software Development Company 

Wondering why you should invest time and money in tailored solutions when the commercial ones are readily available to use at a much lower cost? 

These are the advantages of working with a custom software development company: 

#1: They Develop Solutions Customized To Your Business Needs 

This means that unlike off-the-shelf or packaged solutions, you can ask your partner to include specific features and even exclude some that you don’t need. 

With off-the-shelf solutions what you see is what you get. And, if it happens to miss a certain functionality or features that will be useful to you, well, tough luck. 

According to Small Biz Club, brands should not buy the false promise of off-the-shelf solutions because they are too bland to be effective. 

#2: They Provide Dedicated Maintenance 

Another problem with commercial solutions is that it’s entirely up to the company that developed it to decide how long it is going to maintain it. 

Unfortunately, users don’t have much say in this. If, for instance, Microsoft decides out of the blue to discontinue support for Office 365, then that’s it. 

Software development firms, on the other hand, will update and maintain your product until you need to use it. 

#3: They Can Scale Your Solutions Easier Than Off-The-Shelf Software 

Even if the off-the-shelf solutions are, at the start, just what your business needs, don’t expect this to last. Companies grow and, with them, their software requirements as well. 

At some point, you will see that commercial software can’t cope with the increasingly heavy load. 

Custom-built solutions are much more flexible in this regard and are, therefore, better able to scale and evolve with your business. 

#4: They Provide Technical Support 

The primary goal of off-the-shelf software developers is to sell as many licenses as possible. 

Unfortunately, individual users and their problems quickly lose their importance with this approach. 

For top software development firms, users are always important. Since your business is likely the only one to use this particular software, they can focus all their attention on it via top-notch technical support. 

#5: Their Solutions Are Less Prone To External Security Threats 

A recent report on Hidden Risks to Cyberspace Security from Obsolete COTS Software shows that the number of reported vulnerabilities of commercial off-the-shelf solutions is on the rise, and in 2017 they amounted to 14,714. 

They showed no signs of stopping in 2018, and there were 15,703 identified vulnerabilities. 

Because of the way they are built, COTS solutions present an attractive point of attack. On the one hand, it is difficult to verify their security. 

And, on the other hand, COTS solutions vendors have very limited liability. 

These facts make off-the-shelf solutions much more vulnerable than custom-built ones 

Does it mean that custom-built solutions are 100% safe and secure from external threats? 

No, but at least not every hacker under the blue sky will attempt to probe your software. 

#6: They Make It Easier To Automate 

Automation is not always possible with off-the-shelf solutions. However, as you’ll no doubt learn, certain workflows are infinitely more efficient when automated. 

Each organization is unique and its processes are too. And there’s no better way to automate than with solutions tailored to your specific needs. 

#7: Their Custom Solutions Facilitate The Integration Between Different Departments Within An Organization 

Not only does every custom software development company have its own requirements, but very often those between different departments can clash with each other. 

Custom development makes the integration between different departments within an organization and their applications much easier, which in turn promotes better collaboration. 

We've ranked the best offshore software developers.

Researching Top Software Companies: What To Focus On Before You Start Your Search 

Prior to evaluating what the market has to offer and researching the best software development companies, consider the following aspects: 

Business Needs: What Do You Want To Achieve By Investing In Software Development? 

Before you start researching prospective partners, understand what your objectives are first. 

Ask yourself: 

  • What type of software are you looking to create? 
  • What specific needs and processes do you want to include in the new solutions? 
  • What will be its purpose? 
  • What do you want to achieve by investing in such a solution? 

You’ll want to make sure you select a custom software development company that has experience in these types of goals and who can deliver the best results possible. 

Location: Where Should Your Software Development Company Be Based? 

This step will help you focus your search on local or foreign prospective software companies. 
The key question to ask yourself is: How important is my team’s physical accessibility to my organization, and vice versa? 

In other words: 

  • Will your software developer need access to your physical offices, storage or other corporate premises? 
  • Will you require frequent on-site meetings? 
  • How important is it to remain within your local legal and business systems? 
  • How important is it to overlap with your development partner time zone-wise? 

If you decide to outsource your software development project, ensure you consider the following factors: 

  • Quality of local IT education 
  • Local development standards 
  • The size of the local talent pool 
  • Local intellectual property (IP) laws and other legal protections your business would enjoy 
  • Local business environment 
  • Local political climate 

The answers to these questions can help you determine whether to onshore or nearshore your software development project. 

Budget: How Much Are You Looking To Invest? 

The development cost and the cost of other software services differ greatly, not only across geographic regions but within the markets as well. 

There are many factors that determine the software company’s price sheet, from the local cost of living and doing business to the companies’ level of expertise and client portfolio. 

Our above-featured list of the top software companies comes with a price estimate for each. 
This will give you an idea of the most cost-effective regions, i.e. countries for your software development project and how far your budget can take you. 

How To Choose The Right Software Development Company For Your Business 

Not all development services are created equal. 

Selecting the right software development firm plays an important role in delivering a cutting-edge product. 

And while identifying the best fit requires thorough research and careful consideration, here are the key factors that can help you make an easier and smarter choice: 

  • Find out whether they are a good company to work with: When looking for a development partner, it is important to determine if they fit your requirements and your management style. There are several factors here that you should consider including: 
    • Do you need them physically close or can they be located elsewhere? 
    • Do they fit your budget? 
    • Do they have the manpower, the know-how and the resources to deliver your software development project on time? 
  • Understand if they have the required technical expertise: Top software companies specialize in various technologies, types of services and solutions. Look for the ones that highlight the services that you need, whether it is consulting, architecture, programming or end-to-end development. 
  • Learn whether they have the desired industry experience: Previous industry experience can significantly improve the quality of your solutions, as well as accelerate the delivery of your project. The logic is simple: The more your partner understands your target market and competition, the better they can meet your needs. Going through the portfolios of each custom software development company will help you find out what projects they have worked on. 
  • Conduct an in-depth interview with each candidate: This is your opportunity to revisit and examine all the information about the company’s portfolio, skills and experience. It is also a chance to learn about: 
    • Their management: Assess how experienced and qualified they are 
    • Their evolution and vision: Know where they come from, where they are going and how stable their business is 
    • The company’s recruitment practices: Learn how they ensure they have the best talent on board 
    • How they keep their staff on top of their game: Learn about the processes and practices they employ to keep their staff in tune with the latest trends and technologies 
    • Their staff turnover rates: Assess how loyal their workforce is as an important factor in the progressive domain knowledge building with your team 
    • Their data protection practices: Evaluate how safe your sensitive data would be in their hands 
    • Their crisis management plan: Evaluate how prepared they are to tackle crises like security breaches, technical failures and data loss 
    • Their communication channels and practices: Learn how they facilitate communication with the clients and how they ensure transparency over the development process 
  • Get in touch with each custom software development company’s references to confirm the company’s claims and gain a client perspective on their work. The key questions to ask are: 
    • How would you evaluate your collaboration? 
    • How would you describe the company’s technical expertise and the quality of their input? 
    • How would you evaluate the quality of the company’s output? 
    • How easy was it to collaborate with the company’s management and other staff? 
    • What advice would you give our organization that could contribute to the successful partnership? 
  • Find out whether they offer post-launch support: The best custom software development companies have large teams of experts who can provide support and assistance to clients. Although smaller projects and implementations may not need a lot of guidance, complex projects or big companies may need dedicated professionals. This is why you should discover how these companies determine which projects need support and if they plan to place dedicated experts in your office for a period of time. In addition, determine how long you can expect to receive that specialized assistance. 
  • See how these experts protect their products: With an increased digital presence comes a great possibility for data breach -- and the best software development firms know this. Take the time to understand how they build their programs safely and what processes they have in place to protect your information. Many United States software companies may have recommendations for hosting platforms, third-party integrations, and cybersecurity providers. So, ask for their suggestions, opinions, and logistical reasoning behind them. 
  • Understand if their code is secure: A secondary piece of protecting data is understanding who writes the software code that powers the system and knowing where the source-code is stored. A source code management system backs up your digital destination regularly, ensuring that you can re-establish a website or system quickly in the event of a crash or compromise. If this is a little out of your realm of knowledge, don’t fret! All developers use source codes and should have a solid answer as to which central location the source-code is stored at. And don’t forget to ask top software developers how often a site or program is backed up and how that process works. 
  • Discover how committed they are: Commitment is a two-way street, and brands need to ensure that they are on the same page with their software development companies. How much will their services cost, which experts are you entitled to and how long will the project take? Once this is solidified, finalize all points in a signed contract. This extra step will protect your brand, the project, and the software development firm, ensuring that everyone knows their tasks and communication is clear. 

15 Questions To Ask Custom Software Development Firms Before You Make Your Choice 

Here are the top 15 questions you should ask the best software development companies on our list to narrow the list of options down: 

1. What are your core areas of expertise?

Software developers are skilled in computer programming, but they specialize in different operating systems and programming languages such as Python, Ruby, and JavaScript. 

They also specialize in different areas of development such as architecture, backend and frontend coding, testing and more. 

Finally, software experts, including companies, develop expertise in particular domains such as AI, blockchain and IoT, as well as industries. 

Together, these experts build a product from scratch or implement changes into existing software. 

To find the right software partner for your business, determine your requirement and interview the candidates to determine whether they have the expertise to deliver the best project possible. 

2. How do you deliver your custom software development services: Do you work on a project-based or dedicated team model?

Most of these organizations offer two types of software development services: project-based and dedicated team mode. 

The project-based model is suitable for businesses that look for one-time project delivery. 

This typically includes small and short term projects that clients need to have ready within a short time. 

They usually have set unalterable requirements and don’t need to monitor the project progress closely or communicate with the software developers constantly. 

The dedicated team model, on the other hand, fits businesses that want to invest in a long term partnership. They have a long-term project and look for a software development firm that will help them shape their requirements to fit their needs. 

In this case, businesses also monitor their developers and track their project progress which is why they are involved in the project and continuously communicate with their partners. 

3. Which technology stacks do you specialize in?

Technology stacks are the combination of technologies, including languages and frameworks, used to create your solution. 

The most popular ones are: 

  • Frontend: JavaScript, CSS, HTML and frameworks like Angular.js 
  • Backend: Ruby On Rails, Node.js, PHP and frameworks like Rails and Express 
  • Database: MySQL, Oracle, MongoDB 
  • And more 

Depending on the scope of your requirement, you may want to focus on: 

  • The companies that specialize in the technology stack your project calls for 
  • Or, if you do not have a pre-set requirement, the companies that offer consulting and end-to-end custom software development services as these will be able to help you identify the right technologies 

4. Have you developed solutions for our industry before?

Each of the best custom software development companies on our list has worked with different types of clientele. Though it is not absolutely necessary to hire a partner that has developed solutions for your industry before, it can be beneficial. 

Having an agency that understands your target market, competition and business model well can accelerate project delivery. 

Those experts that have deep insight into your business concerns, market goals, budget and resources can meet your requirements and expectations better. 

Companies’ portfolios will showcase their past work and will give you an insight into their experience in your industry as well as what results you can expect from them. 

5. How do you handle the intellectual property (IP)?

Find out who will own the software rights once your product is launched. There are four types of legally recognized rights that are relevant to every industry and every type of client: 

  • Patents 
  • Copyrights 
  • Trade secrets 
  • Trademarks 

By default, the custom software development company that creates the code owns it. 

However, it is important for businesses to have complete ownership of these rights. One of the main reasons for this is that developers can make you very dependent on their technologies. And this can cost you a lot. 

Moreover, it can also hurt your clients since the software development firm services will depend on the service provider. 

Signing an agreement to protect your intellectual rights will prevent such issues. 

6. What files will I have access to during the project?

Ask the potential software developers what files you will have access to assess the level of transparency and insight you will have during the project. 

As they will work on different systems, these experts will build testing environments, code repositories and other files that document their development process. 

All these files will help you understand product functionality and unify project-related information. 

Moreover, they will also allow you to discuss some significant questions that may come up between you and your software development company. 

Make sure the custom software development company you choose pays deep attention to documentation since it can improve your product quality. 

7. What if I’m not satisfied with the product or service/ what about after-launch policy?

Posing this question to the best software development companies can help you figure out how safe your investment is. 

If the product is discovered to be buggy as a result of poor development or QA testing process, you should ensure that your development partner is willing to commit to fixing these bugs as part of their contract. 

To increase the chance of being satisfied with what your partner delivers make sure: 

  • They adhere to the quality standards while coding your product. In other words, they should use clean code and review them regularly. 
  • They provide you with a legal agreement or contract that will focus on the quality of your product. 

8. What’s your plan for long-term software maintenance?

After your software or application is launched, you will need your partner’s support and maintenance services. 

This may include fixing bugs, releasing updates or adding new features and functionalities as your business grows and changes. 

So, ask the potential candidates on our list whether they will be there to assist you post-launch. 

In addition, make sure you also discuss the cost of their custom software development services once your project ends. 

Find out whether you need to pay any additional fees or maybe they will be included in the pre-discussed budget. 

Depending on your product’s complexity, your software developer may also educate you on how to handle certain steps by yourself as well. 

9. What is your preferred development methodology and why?

Depending on their team size and objectives, software organizations implement different development methodologies and focus on different best practices. 

For your partners to finish your project successfully it is important for them to do proper planning and management. 

This is why you should understand how well these experts manage their teams and work. All methodologies have different pros and cons. 

For instance, one of the greatest advantages of Agile is that it improves efficiency by allowing developers to realize software benefits earlier. 

However, its weakness is that it relies on real-time communication. This is the reason why new users often lack the documentation they need to operate at full speed. 

So, it is of key importance to pick a custom software development company that fits your needs the best. 

That way you will ensure your projects’ success. 

10. What is your approach to project planning like, including development strategy and KPIs?

It is important to understand what is the approach these agencies have to your project from the initial planning until the very end of your project. 

The best software development company will employ reliable methods that will first and foremost meet your business needs. 

Then, they will implement different tactics that ensure the quality and functionally of your product including UX/UI research and QA testing. 

These experts will also estimate the length of your project and focus on relevant key performance indicators to allow them to make smart decisions. 

11. What is your approach to project management like, including team roles and project management tools?

The best software development firm will use appropriate project management methods and tools. They will plan, schedule, track and deliver their projects on time. 

Its team will function together as a whole and they will be able to learn and grow as they reach their collective results. 

They will have a successful project management structure where software developers will clearly define their tasks from the beginning of every project. 

And just before that, they will understand their clients’ needs well and adapt their strategies to every business’ unique goals. 

12. How do you approach client communication?

Every successful project delivery depends on effective communication between the client and the software development company. Therefore, the right partner will constantly keep you in the loop of your project’s progress. 

They will use the best tactics that will make your collaboration easier and simpler. 

This may include online messaging platforms that will allow quick responses and will save time whenever any issues arise. 

Then, they will incorporate reporting dashboards that will store the project data and include real-time updates that will let you keep track of their progress. 

Depending on your location, if you and the potential candidate are close to distance, they might also suggest you have in-person meetings from time to time for them to report on your product development. 

13. What level of involvement should I expect?

For your partner to be able to meet your expectations, it is important for you to clearly highlight all your requirements. 

This may require your software development partner to be constantly in touch with you. They might ask for your opinions, share their ideas and suggestions to ensure your project’s success. 

So, it is important for you to ask how you would be involved in the project from the start until its launch. Inquire how often you would communicate to understand whether you can allocate the time and to organize yourself better without neglecting your work duties. 

Also, ask who would be the main point of contact so that you know who to turn to whenever you have any questions. 

14. How much would my project cost?

Every firm offers different pricing structures. And as we mentioned above, most of them price their software development company services per hour. 

However, the cost of custom software development services will depend on various factors including the project complexity. 

This is why you should communicate your project requirements as well as business goals prior to asking about the cost. 

However, you should also bear in mind that a cheap solution is not a cost-effective one. The more you are able to invest, the more efficient product you will get. 

This is why you should keep your long-term software revenue in mind when negotiating on the final price. 

Moreover, make sure you also ask about the cost of the post-launch maintenance services. Find out whether they are included in the project cost or you will need to pay extra fees. 

15. What would be the list of actual deliverables?

The actual project deliverables will be different for every client since they all have unique goals and requirements. 

This is why you should clearly communicate your objectives with the potential custom software development companies on our list so that they can tell you exactly what you can expect. 

Make sure you choose an agency that can ensure product deliverables and that can deliver software that is fully functional and that meets your expectations completely. 

However, also choose a partner that can provide you with project deliverables. This includes project plans, reports and meetings info. 

Looking for the best app developers? 

Found The Right Software Development Company? Here Is One Last Tip To Ensure Your Project Is Off To A Good Start 

With your development partner decided on, all that remains is to draft the corporate agreement and start the development planning process. 

Make sure to have legal assistance in all stages of deal conclusion, from contract drafting to editing, clause negotiation to proofing and signing. 

With that, your project is on its way. 


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