The classic dilemma: Desktop Software vs. SaaS

by Thomas Frasher on May 27, 2009

When presented with the options more and more companies are opting for Software as a Service (SaaS) services rather than traditional desktop workstation software.  Traditional desktop software has benefits and drawbacks;  SaaS has similar, though different advantages and draw backs.

In tradition workstation software, the vendor is forced to re-acquire the customer at each revision in order to achieve predictable revenue recognition goals. The customer, on the other hand, has an incentive to wait as long as possible before upgrading to minimize the costs associated with the upgrade (downtime, data corruption, learning curve, and new feature acclimatization are but a few).  PC and Server maintenance as well as storage and backup is the responsibility of the customer. The customer can choose the point of upgrade, regardless of the vendor’s release schedule.

Enter SaaS.  SaaS takes the cost of managing PC and Servers out of the Company and creates a scalable model for the Business.  The SaaS provider now has the responsibility and costs associated with being able to ramp up or scale down the application environment.  It allows the business to better project long term costs by tying Total Cost of Ownership (TCO) directly to each application by headcount.
Most businesses do not do a good job of analyzing true TCO for the applications the Business Units ‘require’ for their day to day operations.  So IT is considered to have a larger overhead cost than it truly does.  With the SaaS, model, businesses will be able to run metrics on whether applications like SFDC ( or CRM ( are actually effective and have an ROI to the company. They can also test changes in their models and deployments and rollback changes that don’t test well.

SaaS must be tightly managed from a Role Based Access Management perspective as it is very easy for a companies intellectual property to walk out the door via a SaaS solution.  Strictly controlled access is an overhead cost that must be budgeted to maintain a competitive edge.

There are mindsets that come along with both desktop and SaaS development that need to be addressed as well.  It is very easy to fail with SaaS, (See the Mitchell Ashley’s article –

In summary there is no simple answer to the classic dilemma: Desktop vs SaaS. The only answer that comes to my mind is the consultant speak on most topics – “It depends.”

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