Our Pricing Models for Software Development
INNERLUXES gives clients maximum cost predictability and offers flexible pricing models tailored to the software project's scope. Depending on the required services and the chosen development methodology, we employ one of the following models or use them in combination:
- · Time and materials (T&M).
- · Time and materials (T&M) with a cap.
- · Fixed price.
- · Monthly subscription fees, per-ticket fees (for support and maintenance).
Major Software Development Pricing Risks — and How We Avoid Them
What might go wrong |
How it goes with INNERLUXES |
|
|---|---|---|
Risk #1: Rate manipulation |
There is a dirty market practice of quoting unrealistically low development rates just to win a client. Once the project is underway, the vendor claims the tasks turned out more complex than expected and escalates the rates, often leaving the client no choice but to pay more so the progress doesn't stall. This is especially common on complex projects where switching vendors midway is hard. |
We accurately assess task complexity before the project starts, assign experts of adequate seniority, and are upfront about the required investment. The rates, rate-bound development estimates, and rate escalation clauses are fixed in the contract, so our clients are legally protected from unjustified price changes. |
Risk #2: Rigid pricing models |
Despite the popularity of T&M, it is not a one-size-fits-all option — in some cases, a fixed price is more favorable for the client. Unscrupulous vendors may exploit T&M for larger financial gains: for example, pricing a fixed-scope task under T&M and then inflating the budget by intentionally delaying deliverables and claiming more billable hours. |
With 68 successfully implemented projects, we know the optimal pricing models for different development methodologies and tasks. Our experts pick the most feasible model considering the project scope and the client's budget limits. We never confine our clients to one option and can combine several pricing models to reduce development costs. Explore our featured success stories to see the value of INNERLUXES' flexible approach. |
Risk #3: Hidden fees |
Some vendors deliberately quote only the obvious development tasks and hide integral project cost components to make the quote look attractive. Later, the vendor claims that "extras" (project management, testing, license and subscription fees for third-party tools) fall outside the agreed-upon scope and justify additional charges. |
We sign a clear, detailed contract covering the project scope (with exclusions and possible extensions), administrative overheads, responsibility for third-party fees, and provisions for potential changes. Our clients know the rationale behind every due payment, stay protected from unexpected fees during the project, and can plan expenses accurately. |
Software Development Pricing Models We Rely On
Time and materials (T&M) model
Most of INNERLUXES' development projects are priced under this model.
When and why:
INNERLUXES opts for this model when a project's task scope is subject to change due to early user feedback, evolving customer requirements, or other factors. We bind the development cost to the agreed rates and the effort our experts spend on the deliverables, so the client only pays for the actual work done. Although the exact scope of work can't be predicted early on, our mature project management practices help us accurately define the baseline scope and give realistic estimates from the start.
Best for:
- Agile software development – we charge for the effort required to deliver individual software scope units (e.g., user stories) or functional points (e.g., screens, logical files).
- Iterative software evolution, reengineering, bug fixing.
- Continuous consulting during software implementation.
- Dynamic knowledge management activities (e.g., documenting software in parallel with development).
To safeguard the customer from unexpectedly high development expenses, we establish a cap — the maximum amount of hours INNERLUXES may charge for per iteration or task scope.
Fixed-price model
When and why:
INNERLUXES uses this model when a customer wants our team to handle a software project with a clearly defined scope or perform a development task that can't be divided into smaller time-framed portions. We estimate the final cost of our service in advance by determining the exact effort necessary to complete the task.
Best for:
- One-time consulting services (architecture design, feasibility study, code audit, etc.).
- Proof of concept (PoC) development.
- Linear software development – we define the task scope and fix the price for each Waterfall stage (design, implementation, quality assurance, etc.). Although we prioritize Agile, the Waterfall methodology may suit small low-risk initiatives and documentation-intensive software-hardware projects in regulated industries.
- Isolated development tasks with a defined scope (building a particular feature or software component, application migration to cloud, one-time security testing, etc.).
- Fixed-scope knowledge sharing activities (e.g., knowledge transfer sessions, user trainings).
Subscription-based model
When and why:
Once the software is launched, INNERLUXES typically takes care of its ongoing maintenance and support. We calculate a flat monthly fee for our support services based on the agreed scope of work, which usually depends on the number of software users or support tickets. This model gives our clients maximum control over the service budget.
Best for:
- L1–L3 help desk (resolving a specific number of tickets per month).
- App infrastructure management (software configuration, cloud resource optimization, etc.).
- Managed security services (compliance monitoring, regular vulnerability scanning, etc.).
Some of our clients have greatly varying monthly volumes of help desk tickets. We price such companies under a per-ticket model, which implies charging based on the number of tickets processed and resolved within a specific period. This way, we help our clients avoid overpaying for unused help desk capacity.
Mixed model
When and why:
Fully outsourced software development usually involves multiple activities priced under different models. At INNERLUXES, we mix several approaches depending on the situation to ensure optimal service pricing and help our clients optimize project costs. For example, a client starts the software endeavor with a feasibility study and seeks assistance with technical design, hence is charged a fixed price. Once the discovery is completed, the company wants us to take over product development — for that, we rely on the Agile methodology and apply the T&M model.
Best for:
- Large-scale, long-term development projects with undefined scope (e.g., digital transformation, R&D projects).
- Full-cycle software modernization projects combining versatile consulting and development services (system audit, redesign, cloud migration, building new features, etc.).