Professional software development fees

[ricko_uk]

Hi,
this is just a curiosity question and only to have a rough idea. How much does a company like QT charges per day per developer for custom software development?

Obviously to give accurate figures anybody would need to know specs which I don't have (one of various reasons for not contacting QT directly). The location of the client is the United Kingdom but QT that does the job is I think Sweden.

I am just wondering about some very rough fees numbers... 400 USD/day? 600 USD/day? 1,000 USD/day? I say USD but EUR or GBP is also ok, just for me to have a rough idea.
Maybe a realistic range would be easier to provide?

For a project like this:
- to develop application software that run on top of Raspbian
- needs at least 2 senior software engineers with 15+ years of experience both working full time on it for at least 1 year (possibly more because it would be an ongoing project with continuous updates and software functionality extensions
- it is mostly about controlling small stepper motors, generating graphics on demand, UI interface on a small touch display, communication via Ethernet and USB to a PC

Thank you

[Karel]

Have you asked Qt?
If yes, how much did they ask?
If no, why not?

[sparkydog]

I'm a professional software developer working for a company that primarily does contract work. (Note, I don't do much with the sales side, so take most of this with a fair-sized grain of salt.)

IIRC, our overhead rate is around 100% and is considered extremely low for the industry. I'm not going to give my hourly rate, but at a guess, if you're talking US in a region that isn't overly expensive, you're looking at around $70 - $120 per hour at the experience level you mentioned. (Increase this if you're talking to a company that operates out of somewhere expensive, e.g. California.) I'd probably figure on a more conservative overhead rate, so I'd guess customer cost is maybe $200 - $400 per developer-hour.

Now, that said, you obviously didn't give a lot of project details, but "at least 1 year (possibly more)" sounds excessive unless we're talking an awful lot of functions. That said, the only real way to answer this sort of question is to actually solicit bids. Given that you're asking this question, I'm guessing you don't have a lot of software experience yourself. That being the case, the people that do this for a living are probably going to be able to give you a much better time estimate. (Of course, they'll need a lot more details than you've given here to do so.)

Something else I'd point out, however... why do you think you need 15+ years experience? Nothing you listed strikes me as something that needs depth of experience. What you need is breadth of experience. Sure, a pair of senior developers can probably bring that, but it might be more cost-effective to find the right mix of several (4+) junior developers. That would also give some chance of the project getting done faster (in calendar time).

[aeberbach]

A company know of doing iOS/Android development was asking AUD$1500/day or AUD$1800/day for the really senior guys. They were very much in demand. I do not contract but am regularly spammed by recruiters offering AUD$1000/day, so if that is what the contractor gets you can be sure the contracting company gets much more.

[Bud]

@OP you really ready to pay a quarter million dollars or more a year for Pi driving some step motors?

[SiliconWizard]

Yeah, I'm not sure I get why the OP would want to have the job done by QT themselves. And why it would require "2 senior software engineers with 15+ years of experience both working full time on it for at least 1 year ".
Perplexed.

[Bud]

I could understand if the developers have to observe and understand things like compliance, governance, risk management, the product model, write documentation, provide L2/L3 support for the product. This comes with experience. But just writing code ? 

[ricko_uk]

Thank you all!

As mentioned in the OP it was just pure curiosity. A client needed a professional software company with all documentation tracebility to do that and I think they might have gone with QT but not sure. That is why I was wondering.

[SiliconWizard]

Thank you all!

As mentioned in the OP it was just pure curiosity. A client needed a professional software company with all documentation tracebility to do that and I think they might have gone with QT but not sure. That is why I was wondering.

Ok - it's hard to answer your question then, as with this requirement (full documentation, which I assume may include detailed specs, detailed design, verification and validation), costs will quickly go up and will vary a lot depending on the company. One can give a cost range (per hour or day) for typical software contract work from an experienced engineer behind a company (not a freelancer), but add specific requirements such as documentation and traceability, and things can go to the roof and vary a lot.

If your client requires that, it's likely to mean they need to be compliant with some standards - listing them would be more useful for quoting than just mentioning 'documentation'. If it's a safety-critical application that must comply with specific regulations, it's a whole other story and I'm not sure Qt would be the most appropriate here.

[ricko_uk]

Thank you @SiliconWizard
it is not a safety critical application, just a lab equipment.

In your experience then what would be a cost rage (per day) if it was just a n independent contractor and if it was a large company like QT or similar ones?

Thank you

[mr ed]

Safety critical total  project time can be - at the least - 5 times the work of "commercial normal" code. The pay for coders is a bit more but you will learn to hate the work.

[AndyBeez]

OP from the spec of two highly experienced developers who are both available now, able to work for a year and give rolling support? Lower your aim or be willing to be invoiced for eight to ten thousand pounds sterling a week. Or £400K+ a year. And add an extra £100K which is the fee of the (lazy) recruitment consultant who finds you those two guys. You might go to India or Mexico to slash costs?

Would it be more cost effective to hire permanent staff?  Spoiler, yes it is.

[jonpaul]

Great question:

Program/FW/SW development Offshore/East Europe  is a fraction the USA /UK/EU costs.

Many US firms have outsourced routine and complex SW to China, Vietnam, Baltics (Estonia, Latvia, Lithuania)

Jon

[jchw4]

I have never done any contract work.

But I remember back at the days when I worked for some Enterprise software company we calculated our base customization price and ended up with 2.5*(person salary). This was "zero profits" base which included taxes, office rent, legal department cost to review and sign the contract, etc. The price was for returning customers which had a history of successful orders.

Later I talked to people having similar experience at other companies and the base cost was 2x...5x.
2x was really hard! Even 2.5x was pretty uncommon.

It was about 20 years ago. Not sure how things have changed.

[SiliconWizard]

Yes, obviously full-time of a contractor behind a company is x times his annual salary, with x being a number that's always going to be much higher than if you hired the person yourself.

But you potentially buy the guarantee (given by the company) that the engineer is fully qualified (and that they'll put another one on the project if that doesn't work), and you buy the flexibility of not having to fire them when the project is over. And that you won't have to manage them either. That may be worth the cost. Can't decide for others.

[sparkydog]

The cost of employing someone is always higher than their salary. The cost of contracting is higher still. In addition to the employee's salary, you have the costs of non-monetary benefits (e.g. medical, if the office provides drinks/snacks), the costs of office space (leases, utilities), the costs of providing and managing those aforementioned items (e.g. accounting)...

If you employ someone directly, you're possibly already paying some of those costs (e.g. you're already leasing an office, you already have an accounting department). According to one source, an "average" overhead rate is about 75-80% (that is, for every $100 you pay an employee, it costs your company about $180).

If you contract, you're normally going to be charged for all of those overheads plus some amount because the contractor wants to make a profit. Realistically, however, I would expect the difference in those rates to be modest; if it isn't, you're probably being gouged by the contractor. In particular, my understanding is that 150% overhead (that is, you pay $250 for every $100 paid to a developer) is fairly typical.

[tggzzz]

I have never done any contract work.

But I remember back at the days when I worked for some Enterprise software company we calculated our base customization price and ended up with 2.5*(person salary). This was "zero profits" base which included taxes, office rent, legal department cost to review and sign the contract, etc. The price was for returning customers which had a history of successful orders.

Later I talked to people having similar experience at other companies and the base cost was 2x...5x.
2x was really hard! Even 2.5x was pretty uncommon.

It was about 20 years ago. Not sure how things have changed.

Same 40 years ago in a contract R&D house, for hardware, software, mechanics, etc. A government "cost plus" rate was salary+165%, commercial was more variable but salary+250% to 350%.

[zapta]

The functionality you mentioned, steppers, RPI, small screens, interface to PC, etc, sounds close to open systems such as Klipper. You may want to search first what you can leverage on, before you build from scratch. Not just because of the cost but also to reduce risk.

BTW, do you have any in house software development capabilities? It may be risky to have your core business depend on external consultants without in house knowledge retention.

[TheUnnamedNewbie]

A few of my friends of freelance software engineers. They usually charge anywhere between 700 EUR/day to 1.2kEUR/day, depending on experience, education (one has just a bachelor in programming, one never finished his masters in CS, the other is a PhD in CS), etc. None of them has more than 7 years of experience - I would imagine these rates increase if they had 15+ years. This does include them having a desk at the customer, and they get hardware from the customer to work on.

That said, software engineers tend to get paid about 1.5 times more in the US than they do here in Belgium, so I would assume the freelance rate scales appropriately.

[Jon_S]

Just for some more anecdata, with UK prices.

My brother's company charges customisation of their (PC/Web) software products at £400 per senior programmer hour, for a staggering day-rate of £3200. He says they have more work than they can cope with.

The most I have ever been able to charge for freelance embedded was £450/day. I was thrilled with that...before I heard about my brother's figures.