What did go wrong here was that their earliest adopters got screwed by the change in direction of the business. They are right to be angry, if you say "pay us $X to support you for the rest of time", then people should expect that their $X pays for support for the rest of time. That was the deal, and you can't alter the deal and expect people to be pleased. It is possible to structure the finances to support this pricing; set $X to how much money you'd invest in the stock market or a savings account such that the yearly interest covers the yearly support cost. Clearly, that didn't happen, or they want the interest for themselves instead of support, and that upsets the devoted early adopters who loved the product and the company. That is exactly the group of people you don't want to make mad, and that's the failing here.
(Side note, I wanted to do some actual math on the pricing here. Say you hate SaaS and want an unlimited license for something. You can just do the financial hacks yourself! If a product costs $100 per month, that's $1200 per year. To get $1200 per year out of a savings account, just deposit... $145,000 at 0.7% APY. I guess this is why people don't actually do the "unlimited license" thing ;)
I think it's a super easy misstep for any startup to make. Realize your business model doesn't work, pivot, and leave the early adopters in the dust. Most of the time, because you're growing so fast, it doesn't matter. But you will see rants like this on HN, and they could be avoided with a transition plan. ("We'll give you the SaaS version for free forever!") Just depends on how much you care.
Remember how much "techies" liked Google back in the day? The sentiment on HN is a lot different today. That's what happens as you grow; you lose touch with the early users. Sometimes your vision might be better than them, and you don't need them. But nobody wants to be told by someone they love, "I don't need you anymore".
My guess is they made a mistake, and financially you can't build a business from that. So they moved to a SAAS model and now things are good. It sounds like they honored their commitment to version 6, and they are seeing 7 as a new product.
They did!
We got hosed when they started charging "a lot", and then not sharing the product that we helped finance to build when we bought our indefinite license.
Can you explain? If you buy version 6, then they bring out version 7, wouldn't you buy it again or switch to SAAS?
I do not understand, they made a business error for how they financially planned things it looks like. It sucks but we are talking very little money for something that is mission critical and we all use daily…
Why is this so important to you?