Tangential: Software development cost and revenue time series for different revenue models?

So, there’s a blog post I’ve been wanting to write for like, 15 years now, but I’ve never done so because I think someone else could do a better job. I’m a coder, not the business analyst type. But it’s about software development and publishing. So, I figured I’d ask here and see if anyone was aware of an existing write-up.

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The premises are these:

The traditional old revenue model of software development and publishing — selling a new, owned, on-premises license, then obtaining stable recurring revenue by selling periodic paid upgrades, is dangerously flawed. Using upgrades to drive buyer interest in company-life-sustaining income leads to poor decision making in planning upgrades, focusing on flashy and exciting new features and improvements, neglecting overall quality and sustainable development and eventually incurring fatal technical debt.

The chart of revenue versus costs depicts a set of out-of-phase sawtooth waveforms, culminating at the worst possible circumstances just around the time a new release is produced, with maximum costs (development, QC, publishing, deployment, support) right at the time when customer revenue is lowest (as they wait for and decide if they should purchase this newest upgrade). Historically many developers have failed at this point when unplanned circumstances meant costs exceeded revenue and they could not continue.

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Similarly, the app store model is also flawed. One-time-purchase-revenue-plus-free-upgrades-in-perpetuity is unsustainable. Users are skeptical about paying much for mobile apps because quality and value are so varied, but there is no model to offer a low-cost-of-entry with recurring support revenue license scheme. Fremium and in-app-purchase models help with the initial skepticism but not with sustaining revenue. Apps MUST continue to drive new sales into an increasingly saturated market to survive if they can’t use recurring ad revenue or IAPs to stay alive.

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In my opinion, the only sustainable model is a recurring subscription (or a hybrid purchase-plus-mandatory-maintenance) model. This recognizes that even if you don’t want to purchase this year’s update, if you want next year’s update to ever be available, you need the company to still be around, and you need to keep supporting them. If you want the OPTION to be able to call upon support (even if you don’t need support today), you need to be a contributing sponsor/supporter today and perpetually until you don’t need the product anymore.

Operating a software company costs money even if you have no new customers. And it’s actually supporting and pleasing your old, existing customers that is the most important.

This is why the SaaS or subscription revenue model has become so popular and, I feel, is inevitable.

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I’m wondering if anyone has ever seen an analysis of this situation with actual numbers and charts illustrating the pitfalls and death-zone of the periodic cost/revenue cycles? I don’t have access to real-world data of significant companies (my own data is poor) to convincingly document this, so I’m hoping some MBA somewhere has already done a proper job of explaining the problems and why the solutions are what they are.

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If this is in the wrong place, please let me know, but I couldn’t find anywhere else that properly covered the intersection of software development AND business.