[kilemensi]

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)?