My pet theory is that the rise of SaaS in the 2010s is largely a function of the low prevailing interest rates. Standard pricing says that if interest rates are 0.5%, an annual recurring payment of $100 is worth $20,000; but if interest rates are 5%, like in the 90’s, it is only worth $2,000. With the fed increasing rates, maybe we’ll see a return to pay-once software?
That’s one way of looking at it. From the investor (and thus valuation) point of view, you need to pay $20,000 lump sum to obtain a recurring interest payment of $100.
