[mattlutze]

Vendors have responded to this challenge for a while with Long-Term Support builds to complement the standard product cycle. Get a major set of features that your on-prem customers want, freeze the features, and keep 12, 18, 24 months between major feature updates.

Most companies of any complexity are going to be unable to integrate into their business processes all of your latest and greatest features as fast as the fictional SaaS dev team can release them (then revise, then revise again).

For most of these businesses (just read, most businesses), your software will be less of a time suck if it has a moderate release cycle with a predictable, well-advertised lead out to new changes, allowing IT departments to evangelize and pre-educate on the new capabilities.

[emodendroket]

Yes, that model works, but it is going to use up resources that simply will not be an issue if you're running entirely as a service.

[jaggederest]

You just have to charge enough to make it worth it.

[emodendroket]

I guess so, but the whole point here is that there are a lot of hidden costs you might not have considered if you've operated 100% SaaS.

[jaggederest]

My wild-ass-guess starting point is at least $2.5m/y with a 5 year commitment to make it anywhere near worth it.