Fixed price, T&M or outcome-based: what the data shows

Public surveys show strong buyer appetite for outcome-based pricing. The one public gap between appetite and signed contracts that we found comes from a customer experience services survey, and the data overall is thin and mostly from analyst firms. German contract law sets the frame in plain text: it separates a contract for a result (Werkvertrag) from a contract for services (Dienstvertrag), and that split affects who carries the risk when work falls short.

What does the data say about outcome-based pricing?

Less than the headlines suggest. We found no public figure from ISG, Gartner or Everest Group that gives the share of software or IT services contracts priced on outcomes. What we found are surveys of buyers by HFS Research, an analyst firm, and one-line summaries from other analysts.

The HFS Enterprise Pulse Study 2026 asked 202 senior leaders at organisations with annual revenue of USD 1 billion or more. In an exhibit published on 15 July 2026, 65% say they use FTE or effort-based pricing today and 35% use outcome or value-linked pricing. The percentages are the share of respondents using each model, not the share of spend. For the future, 75% expect their use of outcome or value-linked pricing to increase and 3% expect it to decrease. For FTE or effort-based pricing, 9% expect their use to increase and 70% to decrease. The same page says fixed fee and milestone-based pricing is expected to shrink too. HFS does not define "outcome or value-linked" on the page and does not give the survey period.

A second HFS piece, from 6 July 2026, covers customer experience services. It reports 76% of the enterprise clients surveyed as open to outcome-based or gainshare pricing, and 5% as being in a contract built that way. Unit-based and time-and-materials contracts are 36% each of the contract mix, together "over 70% of primary contracts". The page does not give a sample size. We use it only to show how far appetite and signed contracts can differ, because customer experience services are not software development.

Definitions matter. A 2021 HFS article, based on 800 of the Global 2000 enterprises, says 67% of executives were signing deals with outcomes, defined there as payments due when specific business outcomes, risk, milestone, gain sharing or similar are achieved. A milestone payment counts. The 2021 and 2026 figures use different questions and should not be set against each other.

Other analysts say the same in fewer words. Forrester's State of Technology Services 2026, published on 24 February 2026, says in its public summary that technology leaders maximise the value that service providers bring by leaning into outcome-based pricing models. The report is paywalled, so we could not read the evidence behind that line. In its 1H26 Index recap of 10 July 2026, ISG says new AI pricing constructs such as autonomy level pricing will be critical going forward. ISG gives no share of contracts for outcome-based pricing there.

Our reading: the direction is consistent across these sources, but all of them record what buyers or analysts say they prefer or expect, by their own definitions. None gives the share of software contract value priced on outcomes.

Is the Deloitte 67% a pricing figure?

No. The Deloitte Global Outsourcing Survey 2024 draws on more than 500 global business and technology leaders. Its text says 67% of executives "adopt outcome-based services". The chart behind it shows 67% adopting managed or operate services, up from 45% two years earlier, against 29% using the legacy staff-augmentation model. The report's own definitions describe managed services as priced "on outcomes and volume consumption", but the survey does not report how many contracts use which price form.

In the report, the 67% counts adoption of a delivery model. Anyone who quotes it as the share of buyers paying for outcomes is reading more into it than Deloitte states.

What do fixed price and time and materials mean in German law?

Nothing, as such. The Civil Code has no category called fixed price or time and materials. It has two contract types that matter here.

Under § 631 BGB, a Werkvertrag obliges the contractor to produce the promised work and the client to pay the agreed fee. The object can be the making or alteration of a thing or another result to be brought about by work or service (our translation). Under § 611 BGB, a Dienstvertrag obliges one side to perform the promised services and the other to pay the agreed fee. Services of any kind can be the object.

Both sections speak of an agreed fee and say nothing about how it is calculated. We read that as leaving price form open: a fixed fee, a daily rate or a monthly rate can in principle sit on either type. Which type a given software contract is depends on what was promised, and the text does not classify agile or sprint-based work either way. We found no official guidance that does. That question is for a lawyer.

On our site we describe projects as priced on a fixed scope or on time and materials, and dedicated teams on a monthly rate. See how we work and dedicated teams.

What changes between a Werkvertrag and a Dienstvertrag?

The text attaches more rules to a Werkvertrag, and they all concern the result.

Under § 640 BGB the client must accept (abnehmen) a work made in line with the contract, and minor defects are no ground to refuse. A work counts as accepted if the contractor sets a reasonable deadline and the client does not refuse within it while naming at least one defect. § 633 BGB requires the work to be free of material and legal defects, and it is free of material defects if it has the agreed quality.

For a defective work, § 634 BGB lets the client, under the conditions of the following sections, demand repair, remedy the defect itself and claim the cost, withdraw from the contract, reduce the fee, or claim damages or wasted expenses. Under § 634a BGB defect claims lapse after two years for a work that makes, services or changes a thing, after five years for a building, and after the regular period for other works. Planning and supervision work follows the group of the work it serves. For the two-year and five-year groups the clock starts at acceptance. The text does not say which group software falls into.

On termination, § 648 BGB lets the client terminate at any time until the work is complete, and the contractor can claim the agreed fee minus what it saves or earns elsewhere. The law presumes this is 5% of the fee for the part not yet performed. § 649 BGB covers a cost estimate that the contractor did not guarantee: if the work cannot be done without a substantial overrun, a client who terminates for that reason owes only the claim set out in § 645(1), and the contractor must notify the client at once if such an overrun is to be expected.

For a Dienstvertrag the text is shorter. § 621 BGB sets notice periods for a service relationship that is not employment, by how the fee is measured. With monthly pay, notice is due by the 15th for the end of the calendar month. § 626 BGB allows termination without notice for good cause, within two weeks of learning the facts. § 615 BGB lets the provider claim the agreed fee for services the client failed to accept, less what it saved or earned elsewhere.

Dedicated team arrangements raise one more point. § 1 AÜG requires a licence from an employer who lends employees to third parties. It says employees are made available for work when they are integrated into the borrower's work organisation and subject to its instructions. Whether a particular team set-up meets that wording is a question of the facts and of the contract.

What should a buyer ask before choosing a model?

This section is our addition. It turns the legal text above into a list of questions, and it is not legal advice.

1. What are you buying: a result or capacity? §§ 631 and 611 start from that difference.

2. If a result, what counts as done? § 640 lets acceptance be deemed after a deadline, so write the acceptance criteria and the test process into the contract before work starts.

3. Is a number an estimate or a guarantee? § 649 treats them differently.

4. What happens when you stop? Compare § 648 (result: fee minus savings, 5% presumed) with § 621 (services: notice by pay period).

5. Who directs the people? If your staff direct the supplier's staff day to day, § 1 AÜG becomes relevant.

6. Which defect rights do you need, and for how long? Ask a lawyer how § 634a applies to software.

7. If outcome pricing is offered, who measures the outcome, and on what data? The surveys do not define it consistently, so the contract has to.

What we could not confirm

We could not open the Gartner pages that appeared in our searches, and nothing in this article relies on Gartner. We found no ISG, Gartner or Everest Group figure for the share of IT or software contracts priced on outcomes, and the Everest Group pages we found give no such figure. HFS does not state the survey period or define "outcome or value-linked" on the 2026 pages, its customer experience page gives no sample size, and its full reports are gated. We could not read the Forrester report behind its public summary.

We found no German or EU-wide statistic on contract types or price forms for software work, and the Eurostat pages we found cover cloud services use, not contract models. We also found no official guidance on how a Werkvertrag or a Dienstvertrag is chosen for agile work, and case law was not part of our research.