I’ve been following Joel On software Blog to learn about software business and see what are the challenges facing ISV. One of the interesting discussions is about desktop application vs SaaS. Although the question is quite old, since the advancement of broadband, I still believe that arguing and understanding the tradeoffs is interesting.

Here is an article from a participant detailing the reasons for moving from desktop application to SaaS, and here is an article from the SaaS Development blog. An interesting view of the differences is by using the Quality Attributes Analysis. A table with the different reasons is presented below:

Although this analysis is very representative on technical aspects, it misses the business scope of software development. The business part of software development is completely different, its not about technical merits but about the way of making money from software. In Making money, SaaS, has many advantages that overcome the limitations.

The reasons SaaS has an advantage are:

• Easier sale: Shareware funnel is very long, thus prone to errors. SaaS has lower barriers.
• Collection of statistics: SaaS is known for collecting statistics and optimizing user experience.

last, but not least, SaaS can collect broader information and use it to make intelligent decisions and improve the user experience. As Seth Godin points, we need to stop using Dumb software, giving SaaS an edge.