Basically, it comes down to the alternatives being too damn expensive or too politically restricted, and the additional payload/range/performance of the upgraded Gripen making it quite competitive, particularly with the option of an AESA radar.

This quote is intertesting to me:

[Robert] Kemp [senior vice president for international sales & marketing at Gripen International] says many potential F-35 customers were uncomfortable with the “You’re either with us or against us” approach to fighter sales. He claimed that growing dissatisfaction with technology transfer, workshare and offsets, coupled with F-35 cost escalation and slipping timescales have led “more and more JSF customers coming to talk to us about a replacement for JSF”.

It’s one of the concerns I have about the F-35 is that it appears to have a closed nature, and if a competitor to Lockheed-Martin’s weapons systems wants to get certified, I think that there are doubts about how cooperative LM will be.

I would also direct you toward Bill Sweetman’s snippets of an interview with Mr. Kemp:

“Schedule. So many governments have been grossly embarrassed by programs that run years late.” (Consider the Australian Seasprites and Canada’s CH-148 Cyclone.) Kemp points out that the last major Gripen program, the C/D update, came in on time and cost.

“Price.” Kemp continues. “If it works and you can deliver it, the price – including operational cost – is extremely important.” International politics are less important than they used to be, Kemp says, but domestic issues are more so. (It was the activism of coalition partners that forced the Netherlands government to re-evaluate its choice of the JSF.)

Close air support (CAS) missions are becoming more crucial as time goes on, particularly in countries which have supported operations in the Middle East. “The guys commanding those operational units were the ones who got promoted, and their influence and experience will be more important.”

I still think that the sales folks at SAAB are delusional about having a shot at winning in the Netherlands, because the Cloggies have spent too much money on the JSF already, but the basic sales strategy of, “On time and on budget,” seems to me very sound.