That seems pricey to me, too. I would do two things.
First take a look at Microsoft's SPLA (Service Provider License Agreement) pricing relative to a dedicated license. SPLAs are described here.
If you call MS, you can get a general idea of the pricing. I recall it being quoted as $X/month and was something in the order of 25% of the single license price.
Second, I would have the vendor give you a SaaS price (from which the hosting fees can be deducted). The quoted price should be a $amount per month not a percentage of your revenues.
[COLOR=DarkRed][B][URL="http://www.softwarepricing.com"]Software Pricing Partners, Inc.[/URL] [COLOR=Black]+508-647-0330[/COLOR][/B][/COLOR]