14 June 2018

6 Ongoing Costs of Digital Platforms

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Lara Findlay

If you are considering building a digital product, you will no doubt be planning out your thoughts and strategy. Asides from planning out the fun stuff like features and styles, you will also need to think practically about the financial viability of your app or platform.

Asides from the development costs, there are lots of other things to consider that can all add up. It is very important to have an awareness of the costs your platform will incur – not just to build, but also in the best and worst-case scenarios. What if your app gets 1 million downloads? What if it only gets 20? Either way, you should have a scalable financial model that you can rely on when launching your platform.

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So, what ongoing costs do you need to consider when building an app? We’ve summarised a few of the big ones below:

1. Hosting

If your app stores any data online, you will need to host this somewhere. This means that you will have to sign up to a hosting provider to store this data. When starting a project, we will review different services and find one that is appropriate for your platform. The cost of hosting depends on the number of users and ‘calls’ they make to your database. Some services even come with a free tier to get you started, but make sure you understand the pricing thereafter.

2. Developer accounts

If you are launching the app on the App Store or Google Play, you will have to account for developer account fees. Google costs just $25 one-off. Apple Charges $99 per annum.

3. Transaction fees

If you offer any purchasable items, the cost of transaction fees should be researched before you choose payment gateways, and built into your financial model. Payment Gateways such as Stripe offer competitive rates, but this really depends on the size of transaction and volume. It’s also worth noting that Apple and Google Play take a cut of any in-app purchases, which is on average 30% of any purchase.

4. Services and Integrations

There can be any number of other services required depending on your platform. In many instances it makes sense to use a service or integrate with another platform, rather than reinventing the wheel and building something from scratch. For example, Google Maps, analytics, chat platforms, video conferencing solutions, advanced search options etc. Make sure you are aware of all costs involved with these when planning out your development route.

5. Support and Monitoring

Every digital platform will need to be supported and monitored once it goes live. There can be any number of updates that will have an impact on your platform, and this means bugs can crop up over time. This is also crucial for security reasons, to prevent any attacks or breaches.  

6. Ongoing Development

In addition to monitoring and bug fixing, you should set aside a budget for ongoing feature development. The nature of technology is that things are constantly evolving, and users expect apps to move with the times. On average, you should expect to spend 30% of your budget on ongoing feature development. Every digital platform has a lifespan, so be prepared for updates and rebuilds in the future.

These are the key things you should be researching when putting together your project strategy. Whether these are required will vary depending on your platform. No data requirements? No hosting; Web app or Progressive web app? No developer accounts.

Make sure you discuss these 6 things with your developers at the scoping phase of the project so that you have a clear picture when you launch your platform and prevent any nasty surprises!

Are you curious about the ongoing costs required for your app or platform idea? Download our free Budget Planner template to help plan your budget for your next project.