A web application is much more than just a plain website. In fact, the most interesting web applications are web pages that are nearly indistinguishable from their offline counterparts (from the perspective of the user). Web applications use the web browser as a way of connecting to networked tools and systems.
Benefits of Web Applications
Web applications allow companies to deliver complex programs without a complicated roll-out schedule. Since all you need is a web browser and a URL to the application, most employees will be able to access the application immediately. Web applications store all their data on the server, so users don't need a lot of extra hard drive space to install and use a web application.
Drawbacks of Web Applications
Web applications run inside a web browser, which already has an expected use. Changing that use, by opening windows without controls or other techniques, can confuse the user. Also, many web applications are written with only one web browser (typically Internet Explorer) in mind. While this makes the work easier for the application developer, it can cause problems for users who use any other browser beyond the supported one. Finally, if the data is stored on an external server, and the company running that web application goes out of business, users may lose all their data unexpectedly.