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What does it cost to build and host a web application in 2023?

Woman looking at a website with dollar sign on it

Web applications play an essential role in business operations. These software applications are accessed through a web browser and don’t need to be downloaded. They provide functionality through a URL so companies can engage with customers, automate processes and improve efficiency.

When it comes time to build and host a web application, most businesses are also wondering how significant their investment in the technology will need to be. The answer can differ depending on many factors. In 2023, the cost of building and hosting a web application is determined by things like the size and complexity of the application, any refinements and/or constraints, and hosting and maintenance costs.

Start with the basics: how to determine size and complexity.

To determine the size and complexity of your application we need to first define what it’s going to do. The specifications for modern software are often defined by ‘user stories’. These user stories are a simple way to describe discrete functionalities your application should provide, from an end-user perspective, and are often used by developers to define and estimate the effort required to build an application.

Let’s use Facebook as an example of a web-based application that most people are familiar with. While Facebook may seem relatively simple to use, it is actually a massive web application with many different layers of functionality for different user groups. Describing it in user stories would take a very long time, however, if we stick to its most basic functionality we can use it as a good example. Here are some examples of web-based user stories:

  • As a user, I need to register and create a profile
  • As a user, I need to verify my email address to complete my registration
  • As a user, I need to find friends to connect with
  • As a user, I need to request to connect with the friends I find
  • As a user, I need to add pictures to my profile 
  • As a user, I need to post status updates to my feed 
  • As a user, I need to be able to react (like, love, hate, cry, etc) to posts 
  • As a user, I need to be able to comment on posts 
  • As an advertiser, I need to compare the performance of my campaigns
  • As an page  manager, I need to manage roles for my page

I think you get the idea. 

Defining this application in user stories would take a very long time, and producing each piece of application functionality takes a lot longer! With the table below we will try to ballpark the relative size of your application using the number of user stories.

When you are thinking of your user stories, also think of the relative complexity of each user story. For example: ‘As an advertiser, I need to compare the performance of my campaigns.’ is not the same level of effort as ‘As a user, I need to be able to react to posts.’

We normally apply a ‘level of effort’ attribute to each user story to help scope the application. In development, ‘low’ might mean 5-10 hours, ‘medium’ 10 to 20, and ‘hard’ 50 to 100.

Any user story more complex than that should be broken down into smaller stories. For example ‘As a user, I need to manage my profile’ is not an acceptable user story and should be broken down into even smaller pieces.

Micro (< $50,000)Small($50,000-$200,000)Medium($200,000-$1M)Large($1M+)
10-15 “low effort” user stories25-50 “low effort” user stories50-100 “low effort” user stories200+ “low effort” user stories
5-10 “medium effort” user stories10-25 “medium effort” user stories25-50 “medium effort” user stories50+ “medium effort” user stories
1-2 “large effort” user stories2-5 “large effort” user stories10-20 “large effort” user stories25+ “large effort” user stories

What’s next? Identify application refinements and constraints.

Another factor that can impact the cost of building and hosting a web application in 2023 is refinements and constraints. Refinements include features and functionality that are not essential but enhance the user experience or provide additional value. 

Constraints refer to specific requirements or limitations that the application must meet, such as compliance regulations or security measures. These can add to the development time and cost of the application. 

Gain a competitive edge by considering user delight.

With any application you build, you are most likely facing competition in one form or another. In many cases it is with a direct competitor, but you are also competing with your users’ expectations of what an efficient and pleasant web interaction feels like. 

That being the case, you want to refine your application to not only beat the competition but to also be a joy to use. Therefore, you will probably want to pay attention to usability in the design of your application. 

Software developers often have a basic idea of usability when developing applications, but there’s a big difference between a rudimentary interface and an efficient experience developed by a UI/UX professional. Here are a few classic UX design failures to illustrate the point.

Good usability is best built into the design and informed by user research. To add a UX professional or team to your software project might add another 5-10% in cost (could be more depending on the nature of the application and how important the experience is). That said, this 5-10% can save you much more down the road in rework and enhanced customer satisfaction and retention.

Criticality, security, and regulatory requirements directly impact application cost.

Is your application critical to the daily operation and success of your business, or that of others? Does it deal with health and safety or finance? Does it deal with an industry with regulatory requirements, such as PCI or HIPAA? Do federal accessibility requirements apply? If you answer yes to any of these questions, your application needs to be developed with special requirements in mind.

All of these considerations will increase your budget significantly; not only through the additional requirements, but also due to the need for testing. All well-developed applications are tested continually through the development process with both automated testing and human testing and peer review

Application software that is extremely sensitive or critical would have additional layers of testing and security added throughout the process. Normal development of a web application would include a 20% cost for testing and security, but on critical or extremely critical software that might grow as high as 40% of the total cost.

Ensure a smooth run with ongoing application support.

Designing and developing the application is just the start. Once it is built, it must be operated from somewhere by someone (hosting), and all software needs periodic maintenance such as security and feature updates. 

What about hosting?

For most web applications we recommend a cloud environment for scale and redundancy. Amazon Web Services, Google ComputingCloud, Microsoft Azure to name a few. Processing cycles, storage, bandwidth, backup, disaster recovery, and other details all add to the cost. With a disclaimer on accuracy for your particular application, here are some ballparks below.  

Micro SmallMediumLarge
< $100 / month$100-$500 / month$1,000-$5,000 / month$5,000-$100,000+ /month

Don’t forget application management.

Applications have an ongoing cost of ownership — all software, especially critical applications, need security updates, periodic maintenance, updates to supporting software and technology, and perhaps testing of backup and disaster recovery. To keep your application secure and performing well, these need to be performed as preventive maintenance, not as an emergency response after problems occur.

To make sure all these happen, you will want some level of application management, whether that’s internal or through a managed service provider like Atlantic BT. Because you have a custom application your best bet in choosing a managed service provider will be a company that can both manage the hosting of your application and the ongoing application development and support. 

It’s very rare that you ever “finish” developing your application. Normally, you continue to evolve and improve your application over the course of the time it is in production. Choosing a managed service provider that has a continuous DevOps chain from development through hosting will ensure efficient, continuous operation.

The costs of managed services around a custom application could range from 5%-20% depending on how well it was built originally and how many features and requests you want to continue to add as the application is used. 

Are the numbers starting to make sense?

This web application cost article will help guide you in the right direction for a ballpark estimate. More importantly, it tells you how to approach estimation in general for software development and lifecycle maintenance. 

Trying to figure it out on your own is time consuming and relatively imperfect if you don’t have the in-house skills and experience. We can help in a couple ways:

  1. If you just want to chat — we’re always here and look forward to getting to know you and what you’re working on. We can probably give you a SWAG (scientific wild ass guess) in just a few minutes, but more likely we are going to recommend some kind of discovery to start nailing things down to plan the application. 
  2. If you need something with a bit more fidelity for an internal budget request or pitch to management we can help with a “QuickStart Web Application Budget Workshop”. For a very high value engagement that won’t cost you much, we’ll put 3-4 of our top brains in a room and create a budget range and document the broad requirements for your application. 

Ultimately, the investment in a well-designed and well-maintained web application can pay off in increased customer engagement and business growth. Working with an experienced development team to create a detailed project plan and budget will provide the most benefit.

Atlantic BT’s years of experience and expertise in web app development, combined with our ability to handle everything from design to hosting and management, make us the ideal choice for businesses seeking a comprehensive solution to their web application development needs. 
Contact us today to learn more about our services and how we can help your business thrive in the digital age.

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