I support the conclusion that it is not right for customers to expect month-to-month pricing, but want to add a point and some supporting evidence.
1) SaaS vendors can avoid upfront hardware investment by partnering with Amazon, Windows Azure, GoGrid, or several other companies that make the investment in hardware and allow you to run your application for a monthly price. This is what Acumatica did to launch its SaaS offering.
2) Customers without cash flow issues are tolerant of the issue when it's explained to them. I've spoken to mid-market customers that "need" month-to-month pricing. In some cases this is a cashflow issue, but in other cases, the customer wants to avoid lock-in and gain the freedom to quit paying at any time. After explaining up-front implementation and configuration costs, most customers realize that quitting in month two is not very realistic given the amount of upfront work performed by the vendors. As mentioned in the article, a cookie-cutter type application provides a different set of motivations that would support month-to-month, but I almost never see "cookie cutter" with ERP.
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