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What is SaaS? Software-as-a-service defined

One of the most popular forms of cloud computing is software-as-a-service (SaaS). Here’s a simple SaaS definition: a software distribution model in which a service provider hosts applications for customers and makes them available to these customers via the internet.

SaaS is one of the three major categories of cloud services, along with infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS).

SaaS examples

Given its ease of access, the SaaS model of software delivery has become common for many types of business applications, and it has been incorporated into the delivery strategies of many enterprise software vendors.

SaaS companies have offerings available for a variety of business applications, including email and collaboration, customer relationship management (CRM), billing/payroll processing, sales management, human resources management, financial management, database management, enterprise resourcing planning (ERP), content management, and document editing and management.

As with other cloud services, organizations typically pay for SaaS applications through a subscription fee, on a monthly or annual basis. This contrasts with the traditional model of paying for software through a perpetual license, with an upfront cost and optional ongoing support fee.

SaaS pricing

Providers usually price SaaS products based on some type of usage parameters. For example, they might charge based on the number of people using the application, the number of transactions, or some other measure of usage.

Users typically access the applications using a web browser; in some organizations, they may also use a thin-client terminal.

Most SaaS offerings are based on a multitenant architecture, in which a single version of an application is used for all the service provider’s customers.

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