How do you guys differentiate between "per-hour" consultancies and product dev companies? For those who have worked in both environments with a "free vacation"

How do you guys differentiate between "per-hour" consultancies and product dev companies? For those who have worked in both environments with a "free vacation" policy, what is your experience? EDIT: The reason I ask is I'm curious to know if the pressure to bill by the hour is as powerful as working to "build the next feature" for a product. The customer is different in each case. Does this make a difference?