Definition – What does Software as a Service (SaaS) mean?

Software as a Service is a new model of software where users access software with the help of the internet on the web browser.

The SaaS business model continues to gain more traction across the globe. Companies of all sizes are now embracing SaaS as the next best alternative to the on-premise hardware and software development.

According to the Computer Economics report, around 60% of all companies have now integrated at least some percentage of SaaS solutions into their business, with nearly 36% aiming to increase their investment in the months to come.

Advantages of SaaS

• No minimum configuration of the system.
• Accessible on all devices.
• Subscription based services.

SaaS is also called on-demand software or hosted software.

Flexible payments: Rather than purchasing software to install, or additional hardware to support it, customers subscribe to a SaaS offering. Generally, they pay for this service on a monthly basis using a pay-as-you-go model. Transitioning costs to a recurring operating expense allow many businesses to exercise better and more predictable budgeting. Users can also terminate SaaS offerings at any time to stop those recurring costs.

Scalable usage: Cloud services like SaaS offer high scalability, which gives customers the option to access more, or fewer, services or features on-demand.

Automatic updates: Rather than purchasing new software, customers can rely on a SaaS provider to automatically perform updates and patch management. This further reduces the burden on in-house IT staff.

Accessibility and persistence: Since SaaS applications are delivered over the Internet, users can access them from any Internet-enabled device and location.

Software as a Services is used in a number of common business areas, including customer relationship management (CRM), document management, accounting, human resource (HR) management, service desk management, content management, and collaboration.

It is closely related to the platform as a service (PaaS) and infrastructure as a service (IaaS). It falls under the umbrella of the larger category of cloud computing, although many people view the terms as synonymous.