But just to provide a contrarian perspective on #4, one of my previous jobs was at a company that did both, where we have dev department that built the software, and a growing and profitable consulting arm that helped customers customize and use our system.
A better example is Microsoft, many of its enterprise solutions, like..cough..SharePoint, is supported by an army of consultants hand-holding their customers on non-trivial use cases.
The larger clients tend to be less willing to adapt their internal processes to a new solution, and in many cases it'll require special customization or hand-holding/training to make a sale. On the plus side, they also tend to be able to afford those kind of things, you just have to charge them at a profitable price point.
You need to look beyond just profitability as product vs. consulting businesses grow in very different ways. Do you have a pipeline of quality potential hires? consulting headcount grows more in line with workload than product, which tends to stair-step. Can you handle the boom/bust of consulting? demand tends to be infinite or zero. Can you manage a long sales cycle? product (especially enterprise) sales can easily take 6-12 months. These are the clients that will also likely demand the most customization with software purchase.
I like looking at the motivations for consulting, of which revenue is just one. You also get great ideas for new features, solve existing pain points and leverage relationships for new sales leads.
You can do both but should have a very clear picture of why you do both.
But just to provide a contrarian perspective on #4, one of my previous jobs was at a company that did both, where we have dev department that built the software, and a growing and profitable consulting arm that helped customers customize and use our system.
A better example is Microsoft, many of its enterprise solutions, like..cough..SharePoint, is supported by an army of consultants hand-holding their customers on non-trivial use cases.
The larger clients tend to be less willing to adapt their internal processes to a new solution, and in many cases it'll require special customization or hand-holding/training to make a sale. On the plus side, they also tend to be able to afford those kind of things, you just have to charge them at a profitable price point.