Hi Gary, 

Haven't run into this yet so these are my opinions alone, but I did do a bit
of thinking through the various options and ramifications. In brief and in
reverse order: 

1. I wouldn't rely (just) on the hosting company to provide access,
primarily because today one never knows when an entity might be acquired, go
bankrupt, change its offerings, etc. I have great faith in cloud-based
applications, storage, etc. - but that remains the most significant issue in
my opinion. If you're using a SaaS version of MS Project, hosted and managed
by MS, that's probably as stable as you can get (and go ahead and insert MS
jokes here). But most of the tools today are hosted by organizations
significantly younger and less well-capitalized. 
2. Similarly, not sure I'd trust the host to create a CD correctly. At a
minimum you'd probably need to validate every copy of the CD. 
3. If it's available, I'd rather go with your first option, to download the
data from the application and maintain it yourself. The biggest risk I see
here is in the separation of the data vs. application vs. deliverables. So
e.g. if you used wiki capabilities to create a design document, downloading
that document would be simple and might be sufficient. On the other hand if
you used something to also keep status updates, realtime collaboration
sessions, etc. those might not be readily exportable. So there is some due
diligence required to determine what you need to save and then discussion
with the vendor to figure out how you'd do that. And as noted above, a
vendor response that that's unnecessary is in my mind insufficient. 

Respectfully submitted on behalf of myself and no other company,
organization, association, entity, or board of directors,

Jesse Wilkins, CRM, CDIA+, ecmm, emmm, ermm
[log in to unmask] 
(303) 574-0749 direct
Twitter: http://www.twitter.com/jessewilkins 

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