An Internet approach based on Software as a Service (Saas) delivery marks a significant advance over less interoperable client-server alternatives. The upfront costs are dramatically reduced and implementation times are significantly shortened because the customer does not need to purchase or install hardware, operating systems, database applications, server applications, and system software.
SaaS also offers significant cost savings versus client-server upgrades as there is less reliance on IT professionals to travel site to site and struggle with systems, servers and installation discs; there are no system configuration or compatibility problems and no budget issues.
Because on demand systems are run by offsite, highly secure, centralized servers, SaaS providers are able to perform upgrades 'overnight', seamlessly, without burdening internal staffs, and at no cost to the customer. The reduction in maintenance and upgrade costs is passed to customers, who use the software application to solve issues related to their core business without having to become involved in software maintenance or support.
Allowing companies to avoid the very significant internal IT costs that would be incurred in out years just to maintain a client-server system is another advantage of SaaS. In fact, Timothy Chou in The End of Software quotes Gartner, Inc., a global analyst firm, "Customers can spend up to four times the cost of their software license per year to own and manage their applications". With SaaS, these ongoing IT costs, which are often ignored or hidden in the sale process, are completely avoided.
In addition, in order to keep pace with technological trends in the industry, most client-server systems are re-engineered and/or re-architected every 4-7 years. When these updated systems are released, you will often be required to repurchase your license for the system because the older version will no longer be supported by the vendor. And, you would also need to re-implement the updated system as considerable cost.