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It depends. We once were quoted 300K/year by a SaaS company. We replied by saying that our budget is 20K. "Fair enough, we'll take that".

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I don't know if that's a smart way to bypass pesky hidden information negotiations and suss out other party's upper bound or a really stupid way to do business...

Their decision makes sense, in a weird way.

A lot of value in some SaaS apps is in the initial investment it took to build it, not in the cost to host a customer's assets.

If the runtime costs of a new customer are negligible, would you rather have 0K or 20K?

Of course, I'd rather have 20K per customer But an initial quote of 300K would likely lead to many instant rejections rather than engaging in negotiation, right? That's why I say it feels like a stupid practice, even though it could pay off really well if some company accepts outright (With the caveat that I've never been near this kind of business deal, so I'm just going off of common sense)

Sure, but some people will accept the 300K so it could be worth it even if you scare off a majority of your potential customers.

If dodgy pricing/sales tactics didn't work then Oracle would be bankrupt instead of a 300 billion dollar company.

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