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The cost of an IT product: from idea to market entry

This article is an analysis based on real experience and facts that will help you understand the full cost of developing and owning an IT product.

The Total Cost of Ownership (TCO) of an IT product includes not only the immediate development costs, but also the subsequent costs of support, updating, staff training, and even losses from temporary failure. Understanding TCO allows you to budget more accurately and evaluate return on investment (ROI).

1. Research and planning

The first stage, at which product requirements are formed, an analysis of the market and competitors is carried out. The costs here depend on the depth of the study, but you should not save money – mistakes at this stage will be more expensive in the future.

2. Design and prototyping

Creating a UX/UI design and product prototype requires investment in creative resources and tools. The cost can range from several thousand to tens of thousands of dollars, depending on the complexity and uniqueness of the project.

3. Development

The most expensive part, where the cost depends on the chosen technologies, platform, complexity of functionality and geography of developers. It can range from 10 thousand to several million dollars.

4. Testing and launch

High–quality testing is the key to product stability. The costs depend on the testing methods and the volume of the product.

5. Support and updates

Constant support, bug fixes and the release of updates require regular investments. This can range from 10% to 50% of the initial development cost per year.

Startups and MVPs

For a minimally viable product (MVP), the cost can start from 20 thousand dollars. This allows you to quickly enter the market and test the idea.

Medium-sized businesses

Products for medium-sized businesses require more complex integration and functionality, which increases the cost to 100-300 thousand dollars.

Large corporate solutions

Large projects with a high level of individualization and integration can cost from 500 thousand to several million dollars.

Do not forget about hidden costs such as staff training, marketing and sales efforts, as well as the need to constantly optimize the product to meet changing market requirements.

Examples of calculations and estimates

Research and planning:

  • Cost: $2,000 - $10,000
  • Optimization: Using open research and market analytics can reduce costs.

Design and prototyping:

  • Cost: $5,000 - $20,000
  • Optimization: The use of ready-made design systems and UX/UI templates can reduce development time and cost.


  • Cost: $10,000 - $250,000+
  • Optimization: The choice of flexible and scalable technologies.

Testing and launch:

  • Cost: $5,000 - $15,000
  • Optimization: Automation of testing and the use of cloud services for test environments.

Support and updates:

  • Cost: 10-50% of the initial cost of development per year
  • Optimization: Implementation of a feedback system from users to prioritize and effectively manage updates.
  • Cloud solutions:Using cloud services for hosting, testing, and deploying applications can reduce infrastructure costs.
  • Constant optimization: Regular analysis of product usage and user feedback will help optimize functionality and reduce support costs.

To illustrate the calculations of the total total cost of ownership of an IT product from an idea to 3 years of product life, let's look at an example of an average project. These calculations are approximate and may vary depending on many factors, including the complexity of the project, the geography of development and the chosen technologies.

Initial data:

  • Project type: Medium-sized business project
  • Initial Development: $100,000
  • Annual maintenance and update costs: 20% of the development cost
  • Additional costs (marketing, training, infrastructure): $20,000 per year


Initial development:

  • Research and Planning: $5,000
  • Design and Prototyping: $15,000
  • Development: $70,000
  • Testing and Launch: $10,000

Total: $100,000

Annual maintenance and update costs (20% of the development cost):

  • Year 1: $20,000
  • Year 2: $20,000
  • Year 3: $20,000

Total for 3 years: $60,000

Additional costs for 3 years:

  • Marketing, training, infrastructure: $20,000 * 3 = $60,000

The total total cost of ownership for 3 years:

  • Initial Development: $100,000
  • Support and updates for 3 years: $60,000
  • Additional costs for 3 years: $60,000

Total: $220,000

These calculations and tips represent a general approach to understanding and managing the cost of ownership of an IT product. However, each project is unique, and it is important to adapt strategies to the specific conditions and goals of your business.

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