Subscription vs Project-Based Billing Models

Subscription vs Project-Based Billing Models for Software Companies

Niotechone Marketing Team
October 18, 2025
10:00 am

Introduction:

The software development environment is ever-changing, not only in technology, but also in the way businesses charge and provide their services. Subscription-based and project-based billing models have become two of the most prevalent approaches for software companies that seek to achieve a balance between sustainability, scalability, and client satisfaction in 2025.

Niotechone Software Solution Pvt. Ltd., being a top software development firm in Rajkot, has been dealing with clients in various industries in both billing models each having its own merits and demerits. Regardless of whether you are providing custom software development, web development, or Azure cloud application development, the choice of the model that fits your business can determine your future profitability and customer relations.

The History of Software Billing Models

A decade ago, the majority of software companies used a straightforward, project-based pricing system, where the clients paid a certain amount of work, and after it was completed, the relationship was terminated. But with the development of AI in Software Development in Rajkot and cloud computing, companies began to require constant support, updates, and scalability.

This change led to the emergence of subscription-based models, where software vendors offer continuous value by updating, maintaining, and improving the software on a regular basis, and charging customers a fixed monthly or annual fee.

The shift to a one-time project-based billing to a continuous subscription is a significant business change comparable to the emergence of SaaS (Software-as-a-Service) platforms.

Understanding the Two Models

1. Project-Based Billing Model

Under this model, the software company and the client settle on a predetermined scope, schedule, and price. It is paid either in advance or in milestones.

Key Features:

Defined deliverables
Fixed timeline and budget
Clear scope documentation
Perfect when the project is one-time such as app development or launching a site.

Example:

A client contracts a .NET development company in Rajkot to develop a custom CRM based on ASP.NET Core development. The project has scope, delivery date, and post-deployment support.

2. Subscriptions Billing Model

In this case, clients are charged a subscription fee (monthly, quarterly, or annually) to have unlimited access to services or software. The model is gaining popularity in long-term development, product maintenance, or managed IT services.

Key Features:

Stable recurring revenue.
Continuous value delivery
Scaling and flexible scope.
Perfect with SaaS, DevOps, or continuous software maintenance.

Example:

A company is a subscriber to the custom enterprise mobility software solutions offered by Niotechone, and it pays monthly to update, maintain, and develop new features on a pre-existing platform.

Benefits of Project-Based Billing

Clear Budgeting to Clients- Clients are aware of the overall cost at the outset.
Defined Deliverables – Provides focus and accountability.
Ideal MVPs or One-Time Projects – Ideal when the startup is testing ideas.
Quick Cash Flow- Payments are usually milestone-based, which sustains short-term revenue.
Simpler Contract Management –Every project is self-contained, which minimizes complexity over time.

As an example, a project-based approach is suitable in the development of stand alone applications or specific client-requested tools in the case of .NET Core application development.

The benefits of Subscription-Based Billing

1. Predictable Revenue Stream

Constant cash flow helps in growth planning and allocation of resources.

2. Long-term Customer Relationships

Constant interaction builds trust and loyalty of clients.

3. Scalable Offerings

Clients will be able to upgrade or downgrade depending on their changing needs.

4. Continuous Product Improvement.

The developers keep on updating the features and security.

5. Business Valuation Boost

Investors and partners are more attracted to recurring revenue models.

This model would be appropriate at Niotechone when clients are interested in web development and AI-based enterprise software that can be modified according to market needs.

Disadvantages of Project-Based Billing

Revenue Instability: When the project is terminated, the revenue ceases.
Scope Creep Risks: Scope changes may upset timelines and budgets.
Poor Client Retention: Relationships can be terminated after delivery.
Maintenance Overhead: Unpaid fixes may be necessary due to post-launch problems.

To address them, most companies, in particular, the ones that provide Azure cloud application development, integrate project-based delivery with optional subscription-based maintenance agreements.

Disadvantages of Subscription-Based Billing

Slower First Revenue – Revenue is not high at the beginning but rather increases slowly.
Increased Ongoing Responsibility –Constant updates and support are needed.
Customer Churn Risk – Cancellations affect profitability.
Complex Pricing Models – This needs to be done with caution to the clients.

But in the case of long-term relationships, particularly in the development of custom software and cloud-based enterprise systems, the advantages outweigh the difficulties.

Hybrid Model: The Best of Both Worlds

A hybrid model, where a project-based engagement is followed by a subscription to post-launch services, is now being used by many successful .NET development companies in Rajkot.

Example Workflow:

Create a product within a fixed project cost.
Provide continuous support, maintenance, and feature additions on a subscription basis.
Continuously improve the product using analytics and feedback loops.

This will guarantee a stable income and flexibility and customer satisfaction.

The Role of Cloud in Subscription Billing

Subscription billing has never been easier than it is now with cloud technology and in particular, Azure cloud application development. Software companies can automate:

Usage tracking and billing
Tier-based pricing
Subscription renewals
Constant deployment and delivery of features.

Cloud-native software is also capable of real-time updates, automated scaling, and analytics, which are critical to sustaining value in a subscription model.

Influence on Client Relationships

Transparency: Subscription models create a continued partnership and trust.
Communication: Project-based models need to be documented accurately, whereas subscription models are based on ongoing feedback.
Engagement: Subscriptions encourage mutual success; the software company expands with the client.

Case Study: Billing Flexibility at Niotechone

We have been able to apply both models to clients all over the world at Niotechone Software Solution Pvt. Ltd.

One of our retail clients engaged us in the development of a custom software on a fixed project scope to upgrade their ERP.
After launch, they switched to a subscription model to keep integrating with AI in Software Development in Rajkot, predictive analytics, and feature updates through Azure cloud application development.

The result? Long-term growth of both parties, less downtime, and improved innovation cycles.

Billing Models of the Future 2025 and Beyond

1. Outcome-Based Pricing – Customers pay depending on quantifiable outcomes (e.g., user growth or revenue).

2. Usage-Based Subscriptions – Billing is dynamically adjusted depending on API calls, users, or data usage.

3. AI-Based Billing Analytics – Anticipates churn and proposes customized pricing models.

4. Smart Contracts – Automated billing on blockchain to be transparent and trustworthy.

5. Hybrid Engagements – Custom projects, maintenance subscriptions, and managed services.

Conclusion

The selection of an appropriate billing model is not only about revenue but also about the establishment of long-term relationships and the provision of stable value.

Successful software companies such as Niotechone Software Solution Pvt. Ltd. in Rajkot in 2025 know that flexibility is important. Regardless of the project-based delivery or subscription-based innovation, the objective is the same: to empower clients with scalable, intelligent, and future-ready software solutions.

With the help of the .NET Core application development, Azure cloud technologies, and tailor-made enterprise mobility software solutions, Niotechone keeps on redefining the meaning of value in contemporary software delivery, one engagement at a time.

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Frequently Asked Questions FAQs

Which software company model is more profitable?

The subscription models provide predictable long-term revenue whereas the project-based models are quicker in short-term benefits.

Is it possible to convert a software company to subscription billing?

Yes, Most companies begin with fixed projects and subsequently offer subscription packages to update, maintain, or manage services.

What is the model of choice of clients in 2025?

Contemporary customers are fond of hybrid solutions, i.e. fixed project delivery and constant subscription to make constant improvements.

What is the impact of cloud computing on subscription billing?

Cloud services such as Azure make automation, scaling, and analytics easier- subscription management is more effective.

Why would you select Niotechone as a partner in flexible billing software?

The experience of Niotechone in the development of the .NET, custom software development, and the development of the Azure cloud applications enables us to provide value by offering transparent and flexible billing models that can suit any business requirement.

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Subscription vs Project-Based Billing Models for Software Companies

Table of Contents

Introduction:

The History of Software Billing Models

Understanding the Two Models

Benefits of Project-Based Billing

The benefits of Subscription-Based Billing

Disadvantages of Project-Based Billing

Disadvantages of Subscription-Based Billing

Hybrid Model: The Best of Both Worlds

The Role of Cloud in Subscription Billing

Influence on Client Relationships

Case Study: Billing Flexibility at Niotechone

Billing Models of the Future 2025 and Beyond

Conclusion

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