Software Costing

There is an old saying that goes something like this: “hardware is almost free and comes from China; but software is actually free and comes from India”. Actually not such on old saying, and certainly not true. But we do see signs of this myth being alive and well when providing project pricing and estimates for new clients. I covered some of this in Software Estimation.

Software Estimation

Software Estimation

This was about how to try and work out a Software Development Budget in advance. Including forgetting that the entire Software Development Process involves more than just typing. So is it possible to know what it really  costs from real world (non-imaginary) data?

Software Cost

The answer is that it is. My thanks got to VDC Research who recently did a survey of Embedded Developers and made the data available to subscribers of The Embedded Muse, a software development newsletter authored by Jack Ganssle. If you develop software, especially for Embedded Systems, I recommend you sign up if you aren’t already a subscriber.

Jack Ganssle

Jack Ganssle

Here is a summary of some statistics that gave me insights into real Software Development Costs.

Average Median
Project Team Members 19 7
Project Cost $27,000,000 $250,000
Lines of Code 627,000 20,000

So that is a big spread. Our projects are often below the median level shown here so I was interested to work out what these statistics translate to in cost. The $ are all USD$. And the large lines of code average probably represents larger projects using a major Operating System such as Linux as part of the project.

Cost per team member Cost per line of code
Average $1,421,052 $43.06
Median $35,714 $12.50

My first thought is that we don’t charge enough if these are industry typical figures. A bit more thinking shows the process costs of much larger systems. As far as I know there would be few software developers actually getting $1M for their part in the project. And there will be tools costs also included. The statistic missing for me was the duration the money was spent over. We typically budget $5 per line of code for larger projects (20K lines is a decent sized project for a small embedded system) and $2.50 for smaller ones (say 5K lines of code of less).

So there you have a really rough way of estimating cost based on Lines of Code and number of Software Developers involved.

The above is a very small example of the data collected by VDC Research so consider signing up if you want to see all of it.

Software Lines of Code

Software Lines of Code, or LOC, is only one measure of a project. There is much more to consider. We had a recent project where we were asked to fix 50K lines of code for a product that was proving unreliable. So I ran RSM over the top of it to get the average Cylcomatic Complexity and got 6.2! Those who know what that means probably have no idea how you could write code that hard to debug. And no, it wasn’t lots of switch statements. So is the correct answer $250K at $5 per line of code for a complete rewrite?

The answer is a resounding “NO”!

And the reason is because we redesigned the control flow and changed the UI to a table driven design and reduced a spaghetti mess of 50K lines of code down to 10K lines of cleanly designed code. Which is a budget more like $50K. In this case, it was much more cost effective to redesign from scratch than to try and rescue it. We also fixed the hardware design as that was in part responsible for the unreliability.

So the other answer is that good requirements analysis and good design will reduce Software Cost.

Successful Endeavours specialise in Electronics Design and Embedded Software Development, focusing on products that are intended to be Made In Australia. Ray Keefe has developed market leading electronics products in Australia for more than 30 years. This post is Copyright © 2017 Successful Endeavours Pty Ltd.