How big is the market? How homogenous is the market? How likely is the market to automatically choose the competitor?

Don't underestimate the capability of an incumbent market leader to screw up a product relaunch and actually end up driving customers away from the service. Enforcing a potentially inconvenient switch to SaaS and/or putting the price up actually increases the temptation for an existing customer base to evaluate alternatives.

And even if the well funded competitor consolidates their domination of the space, many niches are big enough for limited products with limited marketing to consistently generate revenue for the small businesses that run them despite all the efforts of well funded, marketed and developed alternatives. Sometimes the smaller players are profitable because they only need to capture a small market share, and retain their customers because they're able to focus on pleasing a subset of the market all of the time rather than the whole market most of the time.