We sell a downloadable, self hosted CMS (http://grabaperch.com). We launched it as a side product of our consultancy business just over four years ago and by the beginning of this year we stopped taking on client work as the income from Perch has essentially replaced that of a successful consultancy, so it is possible.
We don't have recurring revenue as such, a license is a one-off purchase and includes all support, first party addons etc. However our customers tend to be web designers buying a license for each project. If we do a good job they want to use Perch for more than one project!
Growth was slow and steady, I think the toughest part was when we were 50% client work and 50% Perch, as we had customer support making it hard to get on with client projects and we really just wanted to be working on Perch!
I also sell a downloadable self hosted app that targets developers (www.duetapp.com). I would love to hear about how you market Perch. My app has been growing pretty well since it was launched 5 months ago, but it's not yet profitable enough to replace my client work. I'm in the 50/50 place you described and it's....challenging...
5 months isn't a long time after launch for this sort of thing, it really took us most of 4 years to replace our consultancy (there are two of us, a husband and wife team).
The thing that works well for us is what people call "content marketing" these days. If you can write interesting articles and blog posts for your own blog and also for other sites, that appeal to your audience then it is likely that people will click through and have a look at your product. You don't need to write directly about your product - just to a developer audience.
The most surprising marketing success for us though has been sponsoring podcasts, specially where the hosts know and use our product and can talk personally about it. The return on investment on those has been really good.
Hope that helps in some way, I'm a member of a forum at http://discuss.bootstrapped.fm which is all people doing this kind of thing and talking about what they have tried so you might find that useful.
<!-- OFFTOPIC
Kudos for the landing page! However I would suggest you to play with the "buy" wording and replace the stock photos of the business people.
-->
We don't have recurring revenue as such, a license is a one-off purchase and includes all support, first party addons etc. However our customers tend to be web designers buying a license for each project. If we do a good job they want to use Perch for more than one project!
Growth was slow and steady, I think the toughest part was when we were 50% client work and 50% Perch, as we had customer support making it hard to get on with client projects and we really just wanted to be working on Perch!