The utility model also allows a company to show off its services, functionality, and capabilities, and engage with customers who would otherwise be hesitant to enter into a long-term commitment.

As a result, many companies are now agreeing to shorter and shorter terms -- even by the week. (Salesforce.com, however, is sticking to its minimum of a year contract, at least for the moment.)

What we are witnessing is the changeover from strict pricing orthodoxies, says EAC's Greenbaum. As traditional pricing models fall by the wayside, vendors are starting to experiment with a mix of deployment and pricing models.

But for the major enterprise software companies, this will be a hard transition. "It is an enormous change to go from a one-time revenue model to a recurring model," Clayman says -- and he's right.

The proof is in the pudding. You can watch it in action as SAP and Oracle struggle with it, each offering its own hybrid model that is part old school and part new. SAP has something it calls "isolated tenancy" for its CRM on-demand solution, which allows SAP to price applications lower by using multi-tenancy for the basic software platform but single tenancy for the actual business processes. Oracle CRM On Demand uses the traditional per-user, per-month fee, but it also charges an additional up-front fee, like a perpetual license, if a customer opts for all Oracle applications, including its E-Business Suite, PeopleSoft, and JD Edwards, as well as its middleware infrastructure, on demand.