Under the condition of switching cost existing, we study the software upgrade competition with vertical differentiation model between SWS vendor and SaaS vendor, considering the intertemporal consumer behavior of enterprise users, price discrimination of SWS vendor and the price commitment of SaaS vendor. This paper focuses on the impact of switching cost and software quality on the competitive strategies under various market structures. The results show that, in the market of old customers, SaaS vendor’s enterprise users do not switch to purchasing the upgrade version software of SWS after the new version is released. Besides, when all enterprise users of SWS choose to upgrade, the equilibrium outcome proves that the switching cost is the main reason of price discrimination, and the increase of quality differences will alleviate the intensity of competition. In addition, in the market of some enterprise users upgrading the version II of SWS, the switching cost increases the subscription price of SaaS, the full price and the upgrade price of SWS; meanwhile, the impact of quality differences on the pricing of software vendors depends on the reverse constraints of switching cost.