Types of software development companies

Software development is a huge industry. As such, there are many options within that industry if you are looking for a software development company for your own project.

Not every option for development will be the same and it is important to know the difference so that you know you are choosing the right option for you. This can cut down on a lot of unnecessary time doing your own research and help you zoom straight to picking the software company you need and getting the product you want.

So, to help you in that process, let’s look at the types of software development companies in more detail.

Starting with…

Product-based companies 

Product-based development companies are those who spend their time crafting and developing new software solutions for the public market. They see holes in the market and fill them with their own products developed by their internal teams. These products can be for individual users or for institutions and companies. 

Big players in this market would include Google, Microsoft, Adobe, and so on. These companies develop their own unique products, manage them, update them, and provide customer service options in relation to them. They deal with every aspect of the product’s lifecycle and all the user has to do is purchase their package. 

These companies may partner with other big names in business, technology, and innovation, but they do not take bespoke requests from individual companies and users. The products they make are decided upon internally.

Service-based companies

Service-based software development companies are those which offer professional services to clients. These services include:

Product development (apps, servers, sites, software packages)
Consultancy and advisory services
QA and testing
Maintenance and update services

Service-based development companies make bespoke software solutions for clients who come to them with a specific vision and purpose. They can work with all sorts of companies, individuals, startups, large enterprises, and so on, to build the perfect kind of tech solution for them. These can be very large projects or very simple prototypes.

If you are someone searching for a software development company to help you make a product, transform your business, or fix something you already have, it is a service-based company you are looking for. Not only can they help build something you need, but they will also include you in the process and help you via maintenance once the project is completed. This is an entirely different experience from buying an off-the-shelf software option from a product-based company.

Sole traders

Another type of professional development comes from sole traders or freelancers. Many people now offer their services as software developers/engineers/testers/project managers in a freelance fashion. This means that they don’t work for any one specific company but instead work for themselves and find work on an ad hoc basis. 

This option can be cheaper than other choices and some people may enjoy the more one-to-one fashion of working with a freelancer. A sole trader may work best for small companies with smaller budgets and less complicated projects. Something like a small website or app can be best suited to this approach, rather than something like microservices architecture or CRM system development. 

It is always important to use a reputable freelancing site to connect with sole traders and make sure that you are protected by regulations and contracts before you proceed with any financial agreements. 

Offshore companies/trading houses 

Offshore software development is a prolific business. Offshore development offers clients the opportunity to have the products they want to be developed and managed, usually at a smaller price point. There are lots of offshore companies and trading houses in the software development sector. It is important to do your research and check that aspects such as:

  • Country laws and regulations
  • Time zones
  • Exchange rates
  • Level of skill and expertise 
  • Communication abilities 

… are all at the level you need them to be before you continue. There are important aspects of offshore development to consider, which you can read more about in our offshore development blog. 

It is vital to get the right kind of software development company you need, so take your time, do your research, and make the investment of a lifetime.

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