I think that Groupon is the fast answer to social demand based on recession that warms up because of the attention it is getting. And once the recession is over, and people calm down there is much less attention to such companies. But current price is heavily overrated due to above-mentioned reason.

Recreation of Groupon

Google has everything to create almost any software and make it popular: Brand, Users base, and Money.
How much does it cost for Google to create some initial version within 2 months using average salary rates from Glassdoor site?

2 weeks UI design – 1 engineer,
1 month development – 20 engineers,
1 month testing – 10 engineers.

development: $124,135/12 * 20 = about 207,000$
Google Senior Software Engineer average salary $124,135 (according to glassdoor)

management: $102,300/12 = about $8,000
Google Project Manager average salary $102,300 (according to glassdoor)

UI design: $85,706/12/2 = about $3,500
Google User Interface Designer average salary $85,706 (according to glassdoor)

testing: $103,125/12 * 10 = about $56,000
Software Engineer III average salary $103,125 (according to glassdoor)

overall: about 274,500$

Cheap marketing

Google can get some exclusive agreements with popular brands, local retailers in exchange of some price reductions on Adsense, and sell adsense ads on terms that close to Groupon.

Yes, it’s finally happened, we can call regular phones with Google voice. That Google Voice VoIP functionality based on Gizmo5 technology [http://www.google.com/gizmo5/]. Also good news are: Google agreed to trial free calling booths at an airport and a pair of universities!

Now, all that we need is to compare prices and test quality.

Prices comparison

As you see Google set lower prices for all cases, even if it’s few cents. You can make own comparisons for your local places:
Skype rates [http://www.skype.com/intl/en-us/prices/payg-rates/]
Google rates [https://www.google.com/voice/b/0/rates].

Quality testing

We have compared quality of sound in the same places with same computer configuration. For most cases they show almost same results.

Here we need to mention only 2 things:
Gmail Voice has clearer sound in most cases.
Skype provides better noise cancellation.

Jason Fried, and David Heinemeier Hansson’s | buy on Amazon

“Jason Fried and David Hansson follow their own advice in REWORK, laying bare the surprising philosophies at the core of 37signals’ success and inspiring us to put them into practice. There’s no jargon or filler here just hundreds of brilliantly simple rules for success. Part entrepreneurial handbook for the twenty-first century, part manifesto for anyone wondering how work really works in the modern age, REWORK is required reading for anyone tired of business platitudes.”
–Chris Anderson, New York Times bestselling author of THE LONG TAIL and FREE

The Laws of Simplicity

John Maeda’s | buy on Amazon

“Keep it simple, Stupid” is an old piece of advice, so much so that it’s often abbreviated as the “KISS principle.” But it’s advice that’s often ignored, and MIT Professor John Maeda aims to change that. . . . Designers and marketers will find Maeda’s book both interesting and useful….”
— New York Post

Rocket Surgery Made Easy: The Do-It-Yourself Guide to Finding and Fixing Usability Problems

Steve Krug’s | buy on Amazon

“It’s been known for years that usability testing can dramatically improve products. But with a typical price tag of $5,000 to $10,000 for a usability consultant to conduct each round of tests, it rarely happens.

In this how-to companion to Don’t Make Me Think: A Common Sense Approach to Web Usability, Steve Krug spells out an approach to usability testing that anyone can easily apply to their own web site, application, or other product.

By paring the process of testing and fixing products down to its essentials, Rocket Surgery makes it realistic for teams to test early and often, catching problems while it’s still easy to fix them. Rocket Surgery Made Easy adds demonstration videos to the proven mix of clear writing, before-and-after examples, witty illustrations, and practical advice that made Don’t Make Me Think so popular.“
– Amazon editorial

It depends on where the software is built due to there are countries with cheap labor, tax benefits, etc.
To get valid results we should compare costs based on equal productivity of labor. The productivity estimation is a separate and hard task.

The outsourcing is not only about “Cost savings” it has number of advantages and disadvantages.
Check for details: http://en.wikipedia.org/wiki/Outsourcing

Duration

The duration of development heavily impacts cost, and is not inversely to number of developers, there are at least 2 factors:
1. Work can’t be divided intentionally into several independent parts.
2. Developers should spend part of their time on interaction.

Complexity

The unit cost of software is different for software of different complexity.
Think about corporate blog where bug can cause annoyance and bank(aerospace, medical) software where we can lose millions of dollars or people.

We should distinguish between accidental complexity and essential complexity.

Accidental complexity relates to problems that we create on our own and can be fixed— for example, the details of writing and code optimization or platform related disadvantages for particular software development.

Essential complexity is caused by the problem to be solved, and nothing can remove it— if customer wants program with 10 different features, then those 10 things are essential and the program must do those 10 different things.

Finish line

I’ve noted 3 most influential factors and missed other 997, also some universities created complex theories of software price calculations. But the knowledge of life says that software cost estimation is still hard task and only previous experience together with risk management still work well.

Related information:
http://en.wikipedia.org/wiki/Software_development_methodology
http://en.wikipedia.org/wiki/Project_management

Today even great application can die alone .. world has too many great applications.
me

Do you know what software development company sell?
Not just some abstract peace of software but application that can solve customer’s problems .. we should understand what customer wants from the application, what tasks he/she wants to solve with application.

We provide to customer our vision and suggest technology/platform/approach, customer provide ideas/plans/limitations .. together we will end with some satisfied result. But what then?
Then as usual we get our money and leave customer alone with his application.

What else we can give to them?

We should give business advices that can bring closer customer’s target.
Client can take them or not but part of our work is to give ones. Customers see that we care, that help to build better relationship and get great satisfaction .. we make great applications that work!