23.1 Software pricing
In principle, the price of a software system developed for a customer is simply the cost of development plus profit for the developer. In practice, however, the relationship between the project cost and the price quoted to the customer is not usually so simple. When calculating a price, you take broader organizational, economic, political, and business considerations into account (Figure 23.1). You need to think about organizational concerns, the risks associated with the project, and the type of contract that will be used. These issues may cause the price to be adjusted upward or downward.
Figure 23.1
Factors affecting software pricing
| Factor | Description |
|---|---|
| Contractual terms | A customer may be willing to allow the developer ... |
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