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Ha! A car? That's cheap! Big companies can't risk going with a freelancer (who might go out of business or be booked when they need updates) so they put out an

by swanson 14y ago

Ha! A car? That's cheap! Big companies can't risk going with a freelancer (who might go out of business or be booked when they need updates) so they put out an RFP to software firms. A month or so of upfront design (wireframes, screen design, user stories). Another couple of weeks of iterations to get signed off by the branding/marketing group. The development will need a team, four developers is about right (we need to get this app out fast in the ever-changing mobile landscape). We'll need a manager at half time and a team lead to handle client meetings. Throw in a dedicated test engineer (so many phones to test on these days...) and a month for formal test plans and execution (did we mention this app might be audited? test plan is 500 pages). Make sure it is localized as well - we are a global company with global customers, all of whom we value. We also don't want to be sued, so we'll need a EULA screen that the user must accept. And a help page. And a way to register on our site. Oh yeah, the way our budgets work, we've only got one shot at getting money for this app - can't do a minimal release and update it after it's in the store. Conversative costs for an app in the OP's "BMW Tier": One month upfront design at $100/hr (1 designer, 1 dev): ~$30k Three months of development at $100/hr (4 dev, 1 test): ~$250k Three months for PM at $150/hr (0.5 PM): ~$40k One month formal resting at $100/hr (1 test): ~$15k Monthly maintenance/update 20hr/month (1 dev): ~$25k Total: Over $350,000 for the version 1.0 of your mobile app (on a single platform) Apps ain't cheap.

samps 14y ago
You sound like you're disagreeing with the OP, but the article explicitly calls out a $400K+ category of app development if you "do everything right". I think you're on the same page as the author here.
- swanson 14y ago
  Edited to clarify. The above example would be the enterprise version of his second tier, the $20k BMW
Zak 14y ago
The Bugatti Veyron SS costs approximately $2.7M. That's about the top of the price range for new-production road cars. Owning and operating a world-class race car costs more and tends to be budgeted as a lifecycle rather than a one-time purchase. I'm sure someone else can come up with witty analogies for apps, but I think the model holds. Outsourcing the development of an app costs as much as a car, for some value of car. You get what you pay for, and the things that cost a lot at the high end aren't immediately obvious to people not in the business.
ricardobeat 14y ago
That's a lot of bloat for a single-platform, first version app. A designer + developer duo can put a nice polished app out in a month or two, and could cost way under $100/hr. You certainly don't need a team of four + a PM. The process you're thinking of fits the "I want the best" price range (1 month testing?).
- swanson 14y ago
  Of course there is bloat, this is the world of Enterprise Development!
- randomdata 14y ago
  could cost way under $100/hr. Way under seems like a bit of a stretch. The average developer salary is $92,000 per year, which works out to around $45/hr if we assume a standard work week. The rule of thumb is that you need double or even triple of what you are paying your employees in order to be able to afford to employ them. Even if you are the business owner and employee, you still need to recoup the costs of running the business for yourself so the math remains the same. It seems the bare minimum you could charge for the average developer is $90/hr, which is just shy of the $100/hr. quoted. Above average developers will require much more per hour. You could, perhaps, charge way less if you hired below average developers, but that seems to fall under the first category and not the one the parent is referencing. This, of course, assumes that you are operating in the USA. Numbers may differ in less costly parts of the world.
  - ricardobeat 14y ago
    Oops, I missed the part about not being able to use freelancers. $50-$60/hr is a common rate for freelance developers. There also excellent devs that don't live in countries as expensive as the US.
    - joshuakarjala 14y ago
      I think the point was, that even if you are a freelance - you still have employ yourself, with all the overhead that implies: running costs, pension, vacation, accounting etc. So basically most above-average developers in US (and areas with similar wages / living expenses) would charge at least $100 per hours. Your point about developers in countries with lower living expenses than the US is valid. But that would also depend on the customer being in said country.
vlokshin 14y ago
First line sounds a bit loaded, but I think we completely agree? I think...
anuraj 14y ago
I second this estimate, though we do it at half this cost as our developers are in India. Typical enterprise applications require 3+ years of maintenance & enhancements that would work out much more than just getting the app out of the door. Also most enterprise applications would require a travel component as requirements gathering and field testing has to be done on premise. Add to this cost of equipment that is required for development and testing. And yes, freelancers cannot be trusted with enterprise development as long term support infrastructure is required.
- drewcrawford 14y ago
  > freelancers cannot be trusted with enterprise development as long term support infrastructure is required. How is a company that has employees any better? What are you going to do, lock the original devs in the dungeon so they can't leave? The reality is that getting the same set of eyeballs that did the first job counts as the kind of special expertise that only comes with a premium. Either the devs are being paid to watch Law and Order seasons for three months in-between your maintenance cycle, which is its own special kind of premium rate. Or, you have to outbid the project they've moved onto, plus any contractual penalties they might incur for moving off the new project, plus the Fred Brooks Tax for playing musical chairs with developers.
  - anuraj 14y ago
    A company is a going concern which can provide legally tenable support guarantees irrespective of individual developers which is not possible for a freelancer. Project Management and enterprise processes are precisely there for this purpose. With a freelancer, you have no such guarantee. With enterprise outsourcing, cost is inflated, but business continuity is taken care. Reason why Bank of America would not look out for the next door freelancer while developing their mobile app. There is a reason for organizational forms to exist :)
    - drewcrawford 14y ago
      > which can provide legally tenable support guarantees irrespective of individual developers There is very little in software that is irrespective of individual developers, least of all support guarantees. It in fact hinges entirely on the current and former individual developers, and the quality of whatever notes or documentation were left behind. The mere fact that two parties negotiate that software should be performant and bug-free, does not make it so by force of will. As for business continuity, most "app" companies have been around for 1-3 years, whereas the developers that comprise them usually have a decade or two at writing software professionally on the resume. There are more established "consulting" companies that pre-date iOS, but I'll let you in on a secret--they farm work out to freelancers. It's entirely a question of how many middlemen you want between you and the person ultimately responsible for getting the work done.
crusso 14y ago
The article didn't appear to be speaking to a "big company". Those people already know the cost makeup of getting their $300k+ app done. I think this article was speaking more to the smaller business that has no experience in app development but wants to take a plunge into the market. I deal with these smaller businesses here and there. They're often very unrealistic when contemplating the costs associated with app development. They're thinking $500, like that ad they took out in the local paper and they're often shocked when I let them know that their product vision is a couple of orders of magnitude different than their budget. This article would probably be one I'd point them to in order to help them understand the investment that they're making, since it is an investment.
castles 14y ago
I'd love to be paid $100/hr for formal resting. That would be sweet.

by swanson 14y ago

samps 14y ago

You sound like you're disagreeing with the OP, but the article explicitly calls out a $400K+ category of app development if you "do everything right". I think you're on the same page as the author here.

swanson 14y ago
Edited to clarify. The above example would be the enterprise version of his second tier, the $20k BMW

Zak 14y ago

The Bugatti Veyron SS costs approximately $2.7M. That's about the top of the price range for new-production road cars. Owning and operating a world-class race car costs more and tends to be budgeted as a lifecycle rather than a one-time purchase. I'm sure someone else can come up with witty analogies for apps, but I think the model holds. Outsourcing the development of an app costs as much as a car, for some value of car. You get what you pay for, and the things that cost a lot at the high end aren't immediately obvious to people not in the business.

ricardobeat 14y ago

That's a lot of bloat for a single-platform, first version app. A designer + developer duo can put a nice polished app out in a month or two, and could cost way under $100/hr. You certainly don't need a team of four + a PM. The process you're thinking of fits the "I want the best" price range (1 month testing?).

swanson 14y ago
Of course there is bloat, this is the world of Enterprise Development!
randomdata 14y ago
could cost way under $100/hr. Way under seems like a bit of a stretch. The average developer salary is $92,000 per year, which works out to around $45/hr if we assume a standard work week. The rule of thumb is that you need double or even triple of what you are paying your employees in order to be able to afford to employ them. Even if you are the business owner and employee, you still need to recoup the costs of running the business for yourself so the math remains the same. It seems the bare minimum you could charge for the average developer is $90/hr, which is just shy of the $100/hr. quoted. Above average developers will require much more per hour. You could, perhaps, charge way less if you hired below average developers, but that seems to fall under the first category and not the one the parent is referencing. This, of course, assumes that you are operating in the USA. Numbers may differ in less costly parts of the world.
- ricardobeat 14y ago
  Oops, I missed the part about not being able to use freelancers. $50-$60/hr is a common rate for freelance developers. There also excellent devs that don't live in countries as expensive as the US.
  - joshuakarjala 14y ago
    I think the point was, that even if you are a freelance - you still have employ yourself, with all the overhead that implies: running costs, pension, vacation, accounting etc. So basically most above-average developers in US (and areas with similar wages / living expenses) would charge at least $100 per hours. Your point about developers in countries with lower living expenses than the US is valid. But that would also depend on the customer being in said country.

vlokshin 14y ago

First line sounds a bit loaded, but I think we completely agree? I think...

anuraj 14y ago

I second this estimate, though we do it at half this cost as our developers are in India. Typical enterprise applications require 3+ years of maintenance & enhancements that would work out much more than just getting the app out of the door. Also most enterprise applications would require a travel component as requirements gathering and field testing has to be done on premise. Add to this cost of equipment that is required for development and testing. And yes, freelancers cannot be trusted with enterprise development as long term support infrastructure is required.

drewcrawford 14y ago
> freelancers cannot be trusted with enterprise development as long term support infrastructure is required. How is a company that has employees any better? What are you going to do, lock the original devs in the dungeon so they can't leave? The reality is that getting the same set of eyeballs that did the first job counts as the kind of special expertise that only comes with a premium. Either the devs are being paid to watch Law and Order seasons for three months in-between your maintenance cycle, which is its own special kind of premium rate. Or, you have to outbid the project they've moved onto, plus any contractual penalties they might incur for moving off the new project, plus the Fred Brooks Tax for playing musical chairs with developers.
- anuraj 14y ago
  A company is a going concern which can provide legally tenable support guarantees irrespective of individual developers which is not possible for a freelancer. Project Management and enterprise processes are precisely there for this purpose. With a freelancer, you have no such guarantee. With enterprise outsourcing, cost is inflated, but business continuity is taken care. Reason why Bank of America would not look out for the next door freelancer while developing their mobile app. There is a reason for organizational forms to exist :)
  - drewcrawford 14y ago
    > which can provide legally tenable support guarantees irrespective of individual developers There is very little in software that is irrespective of individual developers, least of all support guarantees. It in fact hinges entirely on the current and former individual developers, and the quality of whatever notes or documentation were left behind. The mere fact that two parties negotiate that software should be performant and bug-free, does not make it so by force of will. As for business continuity, most "app" companies have been around for 1-3 years, whereas the developers that comprise them usually have a decade or two at writing software professionally on the resume. There are more established "consulting" companies that pre-date iOS, but I'll let you in on a secret--they farm work out to freelancers. It's entirely a question of how many middlemen you want between you and the person ultimately responsible for getting the work done.

crusso 14y ago

The article didn't appear to be speaking to a "big company". Those people already know the cost makeup of getting their $300k+ app done. I think this article was speaking more to the smaller business that has no experience in app development but wants to take a plunge into the market. I deal with these smaller businesses here and there. They're often very unrealistic when contemplating the costs associated with app development. They're thinking $500, like that ad they took out in the local paper and they're often shocked when I let them know that their product vision is a couple of orders of magnitude different than their budget. This article would probably be one I'd point them to in order to help them understand the investment that they're making, since it is an investment.

castles 14y ago

I'd love to be paid $100/hr for formal resting. That would be sweet.