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Procurement Market Intelligence Report

Software Development Services
Sourcing Guide & Market Trends

Comprehensive intelligence for making smart purchasing decisions

Learn about actual and potential costs

How much should I pay for Software Development Services?

What is the average price of Software Development Services?

This procurement report includes pricing information to help you purchase Software Development Services. Our analysts provide a benchmark price and a price range based on key pricing factors to help you understand what you should be paying for this specific product or service. To see the average price for this and hundreds of other products and services, subscribe to ProcurementIQ.

Has the price of Software Development Services been rising or falling?

Analysts look at market data from the previous three years to determine an overall price trend. You can use the recent price trends to help you understand price volatility and plan your budget.

I’m not ready to purchase Software Development Services yet. Will I pay more if I wait too long?

We forecast the next three years of price movements by looking at factors likely to affect the market's supply chain, such as inputs, demand and competition. You can then use the price forecast to figure out the best time to purchase.

What other costs are associated with purchasing Software Development Services?

Our analysts calculate the total cost of ownership and assign a level of low, moderate or high, depending on things like customization, integration and installation. Use this information to budget for Software Development Services with a reduced risk of unexpected costs.

See how we display average pricing information, trends and market data.

Find the vendor to meet your needs

Where can I purchase ?

Market share concentration in the software development services market is low. About 62,800 vendors provide software development services in the United States. Most vendors are nonemployers, and the top four vendors control less than 30.0% of total market revenue. In the three years to 2020, market share concentration has decreased... Subscribe to learn more.

Questions to ask potential suppliers

How can I gain leverage during negotiations?


How often have customers of yours changed the software specifications that they desire during the development process?

What difficulties do you encounter in responding to a buyer's request to change software specifications midway through the development process?

If we discover that we need to add some features to the software in the middle of development, how can we do this while keeping costs in check?

What is an example of a time your software development firm was able to adapt to the needs of a client during the development process?

Customer Support

How have you changed your service in response to customer complaints and suggestions?

If you encounter issues, or your client is not satisfied, what steps do you take to address the issue?

What is your repeat business rate? Why do companies renew their contract with your business?

How has your service helped similar buyers operate efficiently during the pandemic?

Are you experiencing fluctuations in demand as a result of the coronavirus pandemic? What measures are you taking to handle changing demand?


How do you evaluate customer satisfaction, and how frequently do you do so? Is this made available to clients?

How often do you experience problems with the timeliness of service completion?

What actions will you take if you fall behind in your work?

Is there a project manager responsible for maintaining the timeliness and budget for this project?


Do you provide any service guarantees that go beyond those provided by other firms in the market?

Have you been the subject of acquisition? Are you looking to acquire another firm? How will this affect your business model?

Which firms do you perceive to be your primary competitors in the marketplace?

What do you perceive to be your firm's greatest weakness relative to other competitors in the marketplace?

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Key elements for every RFP

What should my RFP include?

Project Budget

Buyers should specify their budgets for software development services.

Buyers should detail the cost model and contract term for annual ongoing costs (e.g. system support and maintenance fees).

Selection Criteria

Buyers should consider vendors that offer a solution that meets the requirements of the RFP.

Buyers should review the experience of vendors based on client references and the quality of their customer service.

Buyers should evaluate providers based on the estimated costs of the software development services.

For a detailed list of key selection criteria, buyers should reference the Buying-Decision Scorecard section of this report.

Project Schedule

Buyers should provide the timeline of the RFP and project.

Buyers must include the date when proposals are due and when the award information will be available.

Buyers should provide any other benchmark dates that suppliers will need to be aware of (e.g. date of first version of software and date of software training).

Evaluate major factors to mitigate risk

How risky is the supply chain?

A low level of supply chain risk characterizes the market for software development services. For instance, the Trump administration levied tariffs on billions of dollars' worth of imported goods in 2018. However, these taxes have had little impact on the supply chain for software development services because wages, rather than... Subscribe to learn more.