[StevenForth]

What you are talking about is a penetration pricing strategy. These generally fail. They are a good idea if (i) there are real first mover advantages or (ii) there is a steep learning curve or (iii) there are strong internal network effects. Preferably you have two of these. This is not true of most enterprise solutions. Generally, companies that adopt penetration pricing strategies do not generate enough cashflow for sustained innovation and are displaced by the services that invest in such innovation. Or, the service becomes completely commoditized and is often taken over by some form of open source option.