Guide to Software Development Services
Businesses are spending almost 50% more on software than they did in 2020. Gartner also predicts software development to be the second fastest growing segment of the IT spend (beyond data centers) in 2026. Software development services now make up a significant segment of almost every business budget, and it’s critical for relevant stakeholders to understand what this overarching term covers.
In this blog, we aim to answer many of the questions a business may have about software development services.
Introduction to Software Development Services
What is a software development service?
While the name “software development” is self-explanatory enough, development is actually just one part of this service (though arguably the most critical one). The overall service covers ideation, design, development, deployment/integration, and support.
- Ideation or discovery is when you (the client) and the development company discuss and clarify what the software is going to be about. It’s not a definitive and changes during development are common, but the general direction is set at this stage.
- Design and in some cases, planning is where the theoretical “shape” of the software emerges. What features it would have, what technologies will be used to create it, user’s needs, and even things like compliance and security are fleshed out at this stage.
- Development is where software development teams code and integrate different pieces of the software to make a whole. This type of modular build where one software is divided into multiple modules and microservices, has become standard for most software because it’s much easier to modify and scale compared one consolidated build (usually called a monolith).
- Deployment refers to the stage when the software runs in the intended environment. It’s done after rigorous testing and QA and is a critical process because it’s connected to business continuity and if mishandled, may lead to operational disruption. Integration is software connecting with existing software systems, third party tools, and other “digital” elements of your business.
- Finally, post-deployment support, which maybe as minimalist as fixing software problems or as comprehensive as providing relevant training to your users, 24×7 monitoring, and regular updates
It’s not a definitive list of software development service elements. Some jobs/projects may require more service elements while for others, only a couple of elements might be required.
What is custom software development?
Custom software development is when software is built from scratch for a specific purpose or environment. It’s different from off-the shelf solutions that can be modified, configured, and deployed within that environment.
With custom software, clients have maximum control over its design, capabilities, features, interface, and even technologies used to build that. As a result, custom software is naturally far more aligned to a business’ needs than off-the-shelf solutions that are designed to accommodate common needs and pain points within an industry or market segment, so they appeal to a broad range of companies.
The added benefits of custom software may come with a higher price tag and a longer development cycle, though it can be offset by higher ROI and better scalability. It’s important to understand that custom software is more aligned with your business needs, though it doesn’t mean it’s objectively better than off-the-shelf solutions often built and maintained by massive teams. The quality of custom software relies heavily on the expertise and experience of the company providing software development services.
Why do businesses need software development services?
Businesses need development services for building, modifying, scaling, or migrating software they need but don’t have in-house capabilities or bandwidth for. Contrary to popular belief, both businesses with and without in-house development capabilities may need software development services.
Even if you have an in-house team, they may not have the capacity to build the necessary solutions within the required time frame. Lack of relevant expertise and specific regulatory requirements might also cause businesses to outsource development.
The two most overarching needs businesses require software and by extension, software development services are:
- To solve a business problem
- To avail an opportunity
Software is also often connected to “digital transformation,” which ironically is much more than just marketing jargon. Software, especially when it includes AI capabilities, can radically transform business functions. From unification of business data through platforms like ERPs and CRMs to AI agents and chatbots radically transforming customer service and process automation, software solutions have the potential to redefine almost all business processes.
What are the different types of software development?
Software development types can be divided into multiple categories. This includes:
Technical Layers
Technical layer refers to which “part” or “segment” of software is being built. This includes software development types like front-end, back-end, API and middleware, database, and full-stack/end-to-end software development that covers all these.
Application Type
While application development itself is a commonly cited software development service, development companies also offer mobile application development, web application development, desktop/device-specific development services, enterprise software development, and embedded development.
Technology/Domain
There are numerous technology domains or software sub categories that require specialized expertise. This includes AI/ML development which may cover everything from model fine-tuning to building a whole product around AI models and capabilities. Other important technology and domain-oriented development services may include analytics, Virtual Reality/Augmented Reality (VR/AR), Internet of Things (IoT), blockchain, and cybersecurity.
It’s important to understand that technology is not the same as “tech stack,” which refers to the programming languages and frameworks a development team might use to create your software.
Development Purpose
Businesses often require old/legacy code to be modernized for cloud, better performance, scalability, and interoperability. This falls into modernization, often paired with migration services. Other purposes include digital product development, system integration services, and custom development.
Delivery Model
Different delivery models include team augmentation where develpoment teams are working in conjunction with your in-house resources. There is also a dedicated team model where a team is assigned to your project, and you only oversee the process. Consulting services are limited to guidance whereas managed services may include strategically aligned long-term development partnerships.
Architecture and Deployment
On-premise development based on your digital architecture, cloud-native services for a specific cloud environment, and hybrid development that connects on-premise and cloud-hosted systems. This also includes DevOps services, which aims to streamline the process of future software deployments, modifications, and updates.
Industry-specific Development
Many software companies market their industry-specific development expertise, like an understanding of regulatory directives for healthcare and finance. The compliance, data privacy, and other industry-specific requirements have a significant impact on development process.
Understanding Roles and Models in Software Development
What is a software development consultant?
A software development consultant is an expert that guides on you various software related decisions. This includes the
What is CSD in software development?
CSD (Custom Software Development) refers to the process of designing, creating, and deploying software solutions tailored specifically to meet a business’s unique requirements.
Unlike off-the-shelf software, CSD addresses specific workflows, integrations, and challenges that generic solutions cannot solve.
This approach provides companies with competitive advantages through proprietary tools built to their exact specifications.
What is SPD in software development?
SPD (Software Product Development) is the end-to-end process of creating a software product from initial concept to market launch. It encompasses market research, design, development, testing, deployment, and ongoing maintenance.
SPD focuses on building scalable, market-ready solutions that can serve multiple customers, unlike custom development which targets a single organization’s needs.
What is a dedicated software development team?
A dedicated software development team is a group of professionals—including developers, designers, QA specialists, and project managers—exclusively assigned to work on your project for an extended period.
This model functions as an extension of your in-house team, providing consistent resources with deep knowledge of your project while offering the flexibility and cost-effectiveness of outsourcing.
What is team augmentation in software development?
Team augmentation is a flexible outsourcing strategy where you hire external developers to temporarily supplement your existing in-house team with specific skills or additional capacity.
Rather than outsourcing entire projects, you fill skill gaps or scale up resources for particular phases while maintaining direct control over the project management and workflow.
What is the difference between an in-house team and an outsourced team?
An in-house team can be intimately familiar with the company’s needs, software requirements, existing digital infrastructure, and can provide optimal software and business alignment. However, in-house teams are often difficult to scale and may not have all the technical expertise you may need for the new software. Misaligned expertise would mean that you will have several unused resources on hand.
The outsourced team can be far more technologically aligned with your software’s tech stack requirements. They may require more oversight and more concerted collaboration efforts, even more iterations if there is any miscommunication. But this may be offset by more mature, delivery-oriented, accelerated development practices. They can also scale up and down easily based on changing development needs.
Cost is another difference that may lean either way. Some outsourcing partners may offer significant cost advantages compared to hiring in-house resources. In other cases, especially if you need to not just develop, but maintain and modify the software long term, an in-house team may offer better ROI.
What is outsourcing in software development?
Outsourcing in software development means hiring external companies or professionals to handle your software projects or specific development tasks instead of using internal resources.
This strategy allows businesses to access global talent pools, reduce operational costs, accelerate development timelines, and focus internal resources on core business activities while leveraging specialized expertise from external partners.
What is nearshore software development?
Development companies that are based in neighboring countries or within the same region can offer you nearshore software development. They might operate on the same time zone, more linguistically and culturally aligned, but offer cost or talent advantages compared to their local counterparts (onshore development).
Final Thoughts
For Startup companies the selection of software development services can have impact on growth. When you are considering mobile apps, web solutions you need right nearshore software development company to help you fulfill you needs to business.
