SaaS

Software as a service (SaaS) is a software application delivery model where a software manufacturer develops a web-native software application, hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself, but rather for using it.

Philosophy of SaaS

SaaS is associated with business software and is typically thought of as a low-cost way for businesses to obtain the same benefits of commercially licensed, internally operated software, without the associated complexity and high initial cost.

Many types of software are well suited to the SaaS model, where customers may have little interest or capability in software deployment, but do have substantial computing needs. Application areas such as Customer Relations Management, Human Resources, Accounting, Video Conferencing, and Email are just a few one of the first markets that shows SaaS success.

The difference between earlier applications delivered over the Internet and SaaS is that SaaS solutions were developed specifically to leverage web technologies such as the browser, thereby making them web-native.

SaaS applications are generally priced on a per-user basis, and often charged with additional fees for extra bandwidth, storage or other options. They give users an opportunity to upgrade their account in accordance with specific needs they might have in future.

Key characteristics of software delivered by SaaS

The key characteristics of SaaS software, according to IDC, are:

• network-based access to, and management of commercially available (not custom) software
• activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Internet
• application delivery that typically is closer to a one-to-many model than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
• centralized feature updating, so no need for downloadable patches and upgrades.

References

1. Wikipedia - Software as a service