[nitrogen]

I'm not the OP, but I read those two statements something like this:

1. The minimum price to sustain development as standalone software is $50/seat.

2. Consumers will not pay $50/seat for this software.

3. Some businesses have been successful with cloud-based monetization.

4. Therefore, the best chance for success is to sell a cloud service, rather than standalone software.

[ajross]

That's exactly it. Though to be fair, I pulled the $50 number out of you-know-where. The point is more that the caramel-latte-priced software model only works for items with huge volume.