No companies were paying for first S. They were forced into second S during the "Cloud-first" wave by the vendors selling first S after they (vendors) realized they don't need to sell actual software (so no risk of reverse-engineering) and they will have all the data of companies buying their first S thanks to second S. "Cloud-native" entrenched that shift. "Enterprise tier" was a compromise where the first S was run on a VPC, typically in the same zone, so as to give Enterprises that fake feeling that the first S is running on their own systems.

The only thing we need to do now is not second S. Companies who build first S, while letting companies keep their data within their own walls, are going to be future winners. In other words, we are returning back to pre-SaaS era but allowing flexibility of Companies to run first S on their own systems (actually run it on their own systems and not via a VPC).

Even what the OP posted is bound to fail because Companies have realized the value of the data they hold, especially in this AI age. They are not willing to part with their data as easily as they did before (see how many companies are wanting to move over from traditional ERPs to SaaS/Cloud ERPs. many are not willing to upgrade).