Interesting post by 37sigs about why they don’t want to sell installable software. Pretty much it’s standard saas reasoning. Obviously I don’t think they need to sell installable software to be successful.
One thing I strongly disagree with them on though is their last point. The ability to offer instant updates is always touted by saas providers, but there is never any discussion of the significant down side of this. Namely that you’re throwing all your users into a new system randomly at the time of “your” choosing not the time of “their” choosing. So when you release a new update with UI changes, it’s just different one day when you login. As a business this idea is not very appealing to me, especially if I have less technical users who I would prefer to train or at least brief on the impending update.