You requested reasons not to do it: I love to be the devil-advocate (purely metaphorically)
Here are my top five:
- Why not design a different billing model that what is usaully done:
-It doesn't match how enterprise companies traditionally purchase software. Anything different from normal may add an unnecessary barrier to the closing on your product.
- Why to not minimize your upfront cost recovery:
-Enterprise customers always cost more to deploy onto a software than you think. Beyond just the desired configuration and customization-- their processes are just so s l o w. Building into the pricing structure a way to recover this is important. You say that having the first two quarters paid upfront will "compensate for your upfront investment." I would trust that for yourself until you have actually done it a couple times.
- Why not compete on price with an enterprise customer:
Compete on ROI and value. "No money down" marketing ploys are most often associated with the cheap low cost provider. This is probably not the market positing you want in selling a new solution to enterprise customers.
- Why not charge for the first two months before the service and the rest after the service:
It feels like you aren't committed. If I am going to pay quarterly -- let me pay quarterly. Paying the first two quarters means that you get an extra quarter payment? Whooptee do. Are you so "weak' as a com[pany that my extra quarterly payment gives you the cash flow you need, well then are you the right vendor for my enterprise?
If this is to cover your exposure then it means not only are you billing quarterly but you are providing them the option to cut-n-run each quarter as well? Raises questions for me about your confidence and commitment -- and if it raises those questions for me . . .what will it do for the person looking for reasons to purchase the software solution form their friend that they play golf with?
And my number 1 reason not to do it:
Every time a customer receives an invoice which needs to be approved and signed someone things -- do we like this product, do we need this product, do we need to pay this bill? This is usually the CFO characters who asks the CTO characters to justify the cost.
More periodic billing requires a 're-sell" more often. Rather than "re-selling" the customer on the fact that they made the right choice every year-- you will be doing it every quarter. Include after they have had the product only 6 months. Wow, I have rarely had an enterprise client successfully adopt and integrate anything in 6 month -- and I would hate to have to 'resell" the product to them at the six month mark.
Even if you have no problem re-closing each time you send the invoice -- it will add to your costs. (time with enterprise customers is sucked into an endless vortex where everyone but you is paid a salary and now one cares about how much of your time they consume. In fact, the more they consume -- the more they justify the corporate survival)
I am sure that you are putting together your own list of "why to do it" to compare and contrast with the list of "why not to do it"
Based on your initial comments it seems as you might be trying to remove a perceived barrier to purchase which is a significant down-stroke cost. This is a barrier that is rarely experienced in a B2B enterprise sale. The enterprise customer assess the total cost of ownership. My experience with B2B enterprise sales is that a lower downstroke doesn't help the purchasing agent secure support (unless it is highly experimental software that they are simply testing -- and are of setting the risk with very small ongoing commitment).
A review of what perceived problem you are trying to address and reconfirming it is based in actual data might be helpful.
In the end I recommend that you do not make it an either/or situation. Make the license and SLA distinct and offer three billing models which allow the customer to chose the one that works for them. Over time you will be able to recomend the customer's prefered option. Charge more for your risk -- your risk is having less money in your bank account and more costs associated with reselling them every time you send an invoice.