Why Hourly Rate is Better Than a Fixed Price for Software Product Development

Time and money
7 minutes

Depending on the character of a project, it is possible to choose one of the two pricing models – Fixed-price (FP) or Time and Materials (T&M). Some projects go well with a FP model, others are not recommended because of high risks incurred for both parties.

We draw a distinct line between the two pricing models in terms of their use. However, our clients sometimes press for signing fixed-price contracts rather than paying per hour regardless. Why would they knowingly choose the no-win option?