It boils down to TCO (Total cost of ownership). Paying a one-time cost of X doesn't equate to X being TCO for that product/service.
In a functional business environment, any business related software you buy, will need at least three things: hardware, other software (e.g. operating systems, databases, etc) and support engineer(s). All these have recurring costs; ranging from monthly (engineers) to a few years (hardware). To know how must a software truly costs, you'll have to work out all these costs first.
Put another way, SaaS demystifies the whole TCO to a single recurring figure which you can compare to value/benefit you derive from the software.
Two other considerations for SaaS which the OP didn't discuss:
i) Wise investment. Is it wise for a startup/SME to invest $XXXXXX upfront in purchasing a software while they could pay $X (a fraction of the XXXXX) for a few months/years while studying the business and pivoting if necessary.
ii) Core business. If the software is not actual core to the startup/SME line of business i.e. it is just support system, shouldn't the startup/SME let someone else make sure that it works and just use it when needed (pay for when it's needed)?
Comments
It boils down to TCO (Total cost of ownership). Paying a one-time cost of X doesn't equate to X being TCO for that product/service.
In a functional business environment, any business related software you buy, will need at least three things: hardware, other software (e.g. operating systems, databases, etc) and support engineer(s). All these have recurring costs; ranging from monthly (engineers) to a few years (hardware). To know how must a software truly costs, you'll have to work out all these costs first.
Put another way, SaaS demystifies the whole TCO to a single recurring figure which you can compare to value/benefit you derive from the software.
Two other considerations for SaaS which the OP didn't discuss: i) Wise investment. Is it wise for a startup/SME to invest $XXXXXX upfront in purchasing a software while they could pay $X (a fraction of the XXXXX) for a few months/years while studying the business and pivoting if necessary.
ii) Core business. If the software is not actual core to the startup/SME line of business i.e. it is just support system, shouldn't the startup/SME let someone else make sure that it works and just use it when needed (pay for when it's needed)?