[abhisekumar]

Thank you for your details response,

1. Yes for email delivery they can always bring their own smtp like sendgrid or mandril, in that case may be they may not have to think about delivery? 2. Don’t you think customers can save money on self hosted if we sell for onetime payment (let say price at 6 or 8 months subscription cost) like whmcs. 3. What do you think about customer acquisition cost for both options will it be equal or any one will have any advantage over other?

[chton]

Just a note on 2.: If your onetime price is equal to just 6 month subscription time, you're going to lose money. Either you're lowballing your onetime payment, or making a subscription too costly. Consider a case where you offer both at the same time: Unless the costs associated with self-hosting are incredibly high, very few people would choose the SaaS option if they can save 6 months of budget on the first year. In this case, I would increase your price to at least a year of SaaS subscription.

As to your original question: Unless your software is special in some way that you don't want anyone to find out about, you can offer both SaaS and self-hosting at the same time. My advice would be to do that, but use a yearly-license model for the self-hosting. Calculate the costs a self-hosted version would cost in total to a client (license, hardware, maintenance etc.), and make the SaaS version slightly cheaper than that.