I'm looking for the best way to sell a web application. I've thought of the following options:
I feel inclined to use the first method.
Which option would be more suitable, in your opinion?
I would say start with the second method first. This gives you recurring sales and the ability to gain a customer base who all use the same hosted version. It also centralizes deployment and makes support much much easier.
After you've been selling via the hosted option for a while some larger enterprises will want to host their own copies. This is mainly due to security reasons as they are not allowed most of the time to have externally hosted data. These are profitable deals but can be a pain due to having many install locations, different versions deployed to different companies, and providing training to local IT staff. The main money maker on the "host your own" option is not the original sale but the support and training. You really need a large self services customer base first in order to have the resources and know-how to go after the self hosted solution.
Hope this helps and that I wasn't too far off point.
Commercializing web applications is very different to standard installation based software. The main difference is IT departments don't like web applications. They don't like company data to leave their firewalls, which is perfectly reasonable.
Web applications are far more successful selling to end users and small businesses (please please can we not have the typical onstartups response of "I know a large company using web apps").
I'm in the beta stages of a web app and all the evidence of the last 3 months of market research points at (1) being where the money is.
I think web-apps hosted on your own web server is the best option. After the Web 2.0 invasion the software/apps selling trends have been changed. Majority of user-base don't like to go into software installation procedures anymore and user like it more to rely on web-based solution instead.
Rest, choice is yours.
If you do choose to go down the 2nd route, you may be put off with having to develop payment, authorisation, authentication, user accounting, subecriptions, recurring billing systems etc, but there are solutions out there to help get ideas like yours off the ground easily, one such solution is Cloudware City http://cloudwarecity.com/, based in the UK. Even helps sell and market the stuff for you just like Apple.