I always thought of relational databases as a tool for businesses; normally we don't need them as individuals--except perhaps when planning a wedding! Thus the pricing is targeted for businesses and people who get reimbursed by their employers. A second group might be contractors who purchase their own tools.
There might be ways to make a separate tier for private or occasional use, though. And recurring vs. perpetual might be a separate question from the actual total expected cost.
1. Do not include the planned online collaboration features.
2. Support only Excel, Access, CSV/TSV, and Sqlite data sources.
Charge a fair one-time license fee for this, and you would create an attractive tier for individual power-users, without cannibalizing subscription sales of the "online version" for businesses and contractors who care about collaboration and interacting with large production databases.
Just my $0.02.
Perhaps consider a limited free version, say 1000 rows and 10 tables as a limit.
The positive side of this is that it will put it in the hands of many people, most of whom wouldn't have bought it anyway. This lets you get more feedback and find more bugs. A fraction of them will like it and tell their boss to buy the paid version. Do not provide support to free users, it will eat your time.
Build something better, undercut his price, then we can talk.
You may be a really nice person but failed to act accordingly this time.
Something like $399 perpetual license + 1 year free updates/support, and then optional around $99/year. Being self-hosted, you can always keep using it, but to make the company sustainable, it's not wise to promise free lifetime updates.
Would this model too work for you?
I would pay you $400 for this tool without hesitation. I would also pay for upgrades. However, the $400/yr subscription model is a deal killer. This is fine if you're targeting business users only, but it puts the tool out of reach for all but the most determined individuals.
You might want to consider the pricing model used for many digital audio workstations -- a perpetual license for a few hundred dollars, with free patches until the next major version. Then the next major version also costs a few hundred dollars. Rinse and repeat.
This gives you a solid income stream, without ripping your software out of the hands of a customer the instant they're short on cash. It also means the program could work without an internet connection or other constant DRM/activation nonsense. This will likely matter for the technical audience you're targeting.
Best of luck!