Introduction to Software Project Management

Chapter 6

Software Project Pricing

6.1 From Cost to Pricing

Project pricing is how much we charge the client for a project. As excellently pointed out by Sommerville (2007), there is no simple relationship between cost and pricing, since broad organizational, contractual, political, and business considerations influence the price charged.

To understand better some pricing strategies for software products, a good starting point is to look at a product life cycle and understand what are the sources of costs and revenues for a software system. This is shown in Figure 6.1, where we distinguish four different phases:

1. Inception (or feasibility) is the phase during which an organization analyzes the opportunities and risks related to the development ...