Another virtue from the customer and the vendor's point of view is that you can get constant version updating. So rather than buying say a Version 1 liscence and then having to upgrade to version 2, the software vendor can give incremental upgrades to all subscibers on a continuing basis.

I beleive Red Hat Servers are upgraded this way. You pay for your service contract and then every time someone comes up with an incremental improvement in Linux Server software, you are informed of the change, and given the option of incorprating it. So there's no, XP, then XP 2003, then Longhorn... all of which are major overhauls, and are outdated 6 months after you've installed them.