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Software as a service (SaaS)

Software as a service (SaaS)

Software deployed as a hosted service and accessed over the Internet.

Software as a Service (SaaS) is a software licensing and delivery model in which a software is licensed on a subscription basis. These softwares are web-based and does not require you to download to use. They are on-demand and hosted software which can be immediately and directly used by users.

The National Institute of Standards and Technology (NIST) defined software as a service (SaaS) in its 2011 definition of cloud computing:

The capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices through either a thin client interface, such as a web browser (e.g., web-based email), or a program interface. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage, or even individual application capabilities, with the possible exception of limited user- specific application configuration settings.

SaaS applications are most useful in environments with reliable, low-latency networking with adequate bandwidth to import and export expected quantities of data and to facilitate smooth user interaction with the cloud-hosted software.

The SaaS delivery model
Consumers served
  • Organizations providing their members or employees with access to typical software applications such as office productivity or email.
  • End users who directly use software applications, whether on their own behalf or that of their organization.
  • Software application administrators who configure an application for end users.
Value provided to consumers

A SaaS application usage agreement provides the right to use specific applications on demand, and application data management, such as backup and data sharing between consumers.

Calculation of usage fees

Usage fees are typically calculated based on the number of users (or "seats"), the time in use, per-execution, per-record-processed, network bandwidth consumed, and quantity/duration of data stored.Many SaaS companies structure their service offerings around a per-seat pricing model and offer varying tiers of service and features to meet the needs of different types of users.

Types of SaaS applications

The software as a service delivery model can be applied to many classes of software applications:

  • Business Logic. In this area, applications connect companies with their vendors, staff, investors and consumers. Examples include: Invoicing, transfer of money, inventory management, and customer relationship management (CRM)
  • Collaboration. Applications in this sector help people's teams, either inside or between organizations, work together. Calendar systems, email, screen sharing, joint authoring of documents, meeting management, and online gaming are examples. These apps also provide teamwork capabilities in their SaaS incarnations which may be absent from conventional office productivity applications.
  • Productivity. Applications in this sector implement applications such as word processors, spreadsheet programs, presentation programs, and database programs that typify office environments. These apps also provide teamwork capabilities in their SaaS incarnations which may be absent from conventional office productivity applications.
  • Software tools. Applications in this area solve security or compatibility problems and support new software development. Examples include format conversion tools, security scanning and analysis, compliance checking, and Web development.

The software as a service delivery model can be applied to other types of software as well. An ongoing SaaS subscription may be required to operate certain types of hardware.



Further Resources


Why SaaS is becoming the go to service





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