[DJN]

From the undertone of your post, I assume you are not funded. This may be a good time to talk to some angels and get the financial and professional backing that'll put the minds of enterprise customers at ease with your service.

If you don't want to go through that route, and your software can run in a private cloud, then I suggest you offer them a non-hosted version. Giving them your source code is a no no unless you are planning to open-source everything.

In addition, let them know that they'll have to pay for upgrades. Having said that, make sure you price it properly to make the extra hassle worth it.

[saas123]

Thanks. We are bootstrapped and cash-flow positive. I guess the angel route makes sense.

Regarding running the service in a private cloud, my only fear is that it could turn out to be a can of worms i.e. a support nightmare. Are there any SaaS services that currently provide that sort of service?