"If you were to start a business today, would you bother buying desktop software for productivity and collaboration? Probably not, you'd employ some software option delivered as a service.".
Actually it heavily depends, but SaaS isn't exactly the holy grail you know.
Lets get one thing out of the way: I'm biased in favor of Microsoft Office when it comes to the desktop applications. I think it's really hard to beat that functionality, especially if you familiarize yourself with the VBA backend, then the sky can really become the limit.
Looking at online services though shows a huge difference. Google has a major advantage there, the userfriendliness which Google's online services have to offer is pretty much unrivaled. Look... If you see Google docs appear in areas where you can be assured that not most people aren't very tech-savy then that should be a clear signal that Google is definitely doing "something" right.
But back to that top sentence I quoted: generally speaking it's much more appealing for a company to buy into desktop applications instead of SaaS. First the obvious: SaaS may appear to be cheaper, but in the longer run it's not. If I wanted to get a business subscription I'd have to pay roughly E 10,-/month. A business version would cost me around E 230,- / month.
The thing is: there's more at stake than just 2 years worth of use. By buying the software you're also adding to your companies value (assets) which can influence the taxes you have to pay (depending on your country). Another important detail is availability. Offline means that you'll be able to work wherever you want, online means that you'll be depending on an Internet connection. Although a basic connection could do, if you end up with multiple employee's working online then you may also run into bandwidth issues. As such more costs involved.
Next: insurance. When working online you also have to cope with your data being stored outside your reach and basically outside your control. Normally you'd have that roughly covered with the global insurance policies for your company, but since it's in the cloud there will be more at stake here. Also more risks. Sounds crazy? Well, if everything is stored in the cloud then you'd better make darn sure that sales (for example) can't access files from HR, and vice versa. Risk assessment. Do I hear more work, as such also more involved costs?
Do note that I'm not trying to claim that online = bad, it doesn't have to be. Heck: in the higher 365 tiers you're even provided with offline tools. But claiming that online is per definition more appealing than the "old and traditional" offline approach is simply being narrow minded. There's much more at stake than that.