I believe that the best approach is a combination of:

A fairly high "Lifetime" support/update licence, for those who have decided that the product is indispensable and who, therefore the are willing to pay upfront to make a long-term saving. This gives a useful boost to cashflow in the short term.

An annual support/updates plan where any discounting is concentrated on returning customers rather than attracting new ones. If renewals are discounted by a significant amount, then you give your existing customers a powerful incentive to stay, and avoid dropping out of the system and having to pay full price to come back in. Also, for a long term business model, don't we want to reward our most loyal customers?

Additionally, you could apply a discount for the lifetime option to any customer who has been with you for more than a certain period.