I think the author's assumption is that the subscriber would use the service for twelve months whether they were on monthly or annual.
So, if that's the case, you're better off taking the extra x% percent that a monthly plan gives you.
I think the author was also making the point that while you might have all your money upfront, you won't manage it well so it lasts all year. Could you? Yes. Will you? No.
And from personal experience, depending on who your customer is, a yearly plan can make revenue far less predictable.. for a corporate customer there is a big difference between a $12k annual charge, and $1k monthly charge. The first they will scrutinize every year and question its value, while the second they might not even notice.
I agree with what you're saying here, but I've also found it really difficult to get corporate customers to sign up on a monthly billing basis - they always want to send a PO on an annual basis, and often don't even have a means internally to pay for software on a monthly basis.
I've been on the other side of this in the corporate world too, and paying for stuff was always a horrible experience taking weeks at best, but often months. We'd always try to use OSS when possible, and built rather than bought far more often than we'd have liked, precisely because of how much red tape there was. Sometimes our preferred option only allowed monthly billing, and we went with an alternative instead, because nobody wanted to go through a protracted, painful, soul-destroying process of getting authorisation to pay monthly.
So, if that's the case, you're better off taking the extra x% percent that a monthly plan gives you.
I think the author was also making the point that while you might have all your money upfront, you won't manage it well so it lasts all year. Could you? Yes. Will you? No.
And from personal experience, depending on who your customer is, a yearly plan can make revenue far less predictable.. for a corporate customer there is a big difference between a $12k annual charge, and $1k monthly charge. The first they will scrutinize every year and question its value, while the second they might not even notice.