Software development is very a technical and highly specialized field of endeavour. The demand for people with such a skill set is quite high; however, the general reality is that it is very difficult to make money as a software developer. People have a tendency to appreciate a developer’s coding skills but are not eager to significantly pay for what they produce. I remember a few years ago I developed a software application for a certain organization I was involved in and they developed cold feet about paying for it. I ultimately had to let it be used for free because I had no use keeping it since it was bespoke. Anyway, let’s discuss some ways in which software developers make money.

Out-right Purchases

This entails a software developer placing a price tag on the software developed. Money then gets realized from purchases of the software made. This sets up a chain reaction in which you’ll get to earn more income from future services provisions such as:

Maintenance & Support

This is wide-ranging from doing installations, round-the-clock on-call support, periodic maintenance, updates etc. All these will be services that a software developer charges for. Normally, the idea is to quote the charges by a fixed hourly rate. This is strategic to earning recurring income.

Licensing & Royalties

Here a developer copyrights software and creates a framework in which anyone looking to use the software must pay a license fee first. Royalties involve devising a system by which the developer is entitled to a certain percentage of any revenue realized from subsequent use of the software. For instance, suppose someone develops a flight booking & management software for a travel agency. There can be a framework setup in which the developer gets a certain percentage from every booking made.

Service Sales

This pertains to developer-to-developer interactions mainly. Thing is this, not any one developer is conversant with all the programming languages in existence. Therefore money can be made from one developer outsourcing the services of another developer. Software developers tend to be collaborative due their varying skill sets – this creates an ecosystem that enables money to be made.


This is obviously a universal revenue model that’s incorporable in any venture. This entails the provision of space for paid ad placement within the software application. As always the success of this model is dependent on how popular the software is.

Plug-ins & Extensions

The idea here is develop a software that is initially skeletal but providing convenience to users. You then periodically bring in more & more layers by developing plug-ins and extensions that offer a more enhanced experience. Revenue then gets realized by monetizing these plug-ins and extensions. WordPress is a perfect example of software that uses this strategy.


Toolkits can be comprised of virtually anything that enhances user experience of the developed software. Some inclusions can be comprehensive user manuals, documentation etc. Money can be realized from selling these toolkits.


Here I’m talking of a variety of things that entail getting financial backing. Main examples are sponsorship deals, donations (individual or corporate) & crowd-funding. If software is really useful and beneficial to certain brands they can inject financial resources for the developer to partner with them. CTAs for can be embedded in the software application requesting well-wishers to make contributions towards fostering further development of the software.

Custom Software Solutions

These are a safest and sure way to make money because it’s not a gamble. This usually entails a software developer being approached by an individual or corporate to develop dedicated & custom-written software. The terms are agreed on before project commencement and this is a guaranteed way to make money. It actually sets off a possibly life-long working relationship for as long as the software is in existence.

Use Of Freemium Models

This is particularly employed for enterprise software solutions. The concept is to develop software that is available in two forms/options i.e. free version and the paid version. The free version is basic and has limited functionality. Whereas the paid version has a lot more enhanced and premium features. Examples of these are anti-virus software; free versions are available as well as paid versions. In some cases the free versions only work for a specific period after which they expire and one has to upgrade to the paid version.

Training Programs

Here a developer can setup seminars, classes or workshops either physically or virtually. The goal can be anything from teaching about particular software they developed or it can be teaching people to code using various programming languages. Coding is now an on-demand skill that many people are looking to acquire hence a software developer can make money from this by making people pay or subscribe for such training programs.

In closing I want to highlight a secret for software developers they probably never thought about. If you look at the biggest software-based brands in the world such as Facebook or Google; they never started out making money from the software. For what it’s worth the software platforms are accessible and used for free. It is the other innovative enterprising value-added services such as advertising, affiliate marketing, data mining etc that rake in the money. Don’t ever forget that in the world of software development – it might not necessarily be the software that’ll directly earn you money.