Web hosted or not and the affect of poor interface design

What are the trade offs between choosing a web hosted solution and one that isn't online. The vendors all seem to think that their solution is best.... if you have a web hosted solution you don't have (supposedly) backup/security/maintenace issues that you would with a solution that is locally hosted.

Yet what happens if the internet goes down? Or the vendor's backup regime fails or they get hacked in to? Is that just our fear talking? If you have a locally hosted (ie. on your computer/network) then you are safe if the web goes down and aren't likely to be a victim of bandwidth (Telecom surely have to answer to this...).

Of the vendors I've spoken to, many don't actually mention the trade offs between web or locally hosted in terms of usability of the system. I'm talking here about user interface design and how easily people can navigate- check the title link to an article about usability in the UK's Guardian.

I'm looking at two systems for Fendalton School, both of which are web hosted. Compare these systems to those that are hosted locally, or on your computer/network, and really their user interface is terrible in comparison... how does this affect our decision? What are the costs to learning of a poorly designed user interface for an SMS system?

I wonder if there is anywhere or anyone who has a rubric or some sort of judging criteria for rating how easily used a particular SMS system might be? That would make the decision-making process much easier.