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SaaS Meaning & Definition

Software as a Service (SaaS) is a software delivery method that provides access to software, its functions, and subsequent updates remotely from a third party, called an Application Service Provider (ASP). SaaS applications are also sometimes called hosted applications. SaaS is a type of cloud computing service model.

SaaS is usually a more affordable means of accessing software since its pricing is based on a monthly subscription rather than a lump-sum fee paid for on-premises application licensing. These cost-effective solutions are specifically targeted toward small and medium enterprises with lean IT budgets. 

Pros and cons of SaaS

SaaS applications are provided over the Internet, which can spell trouble if a user does not have Internet access, but also means they are universally compatible with any operating system and not dependent on any specific type of hardware. SaaS also alleviates the need to have dedicated IT personnel on staff who are responsible for installing, configuring, maintaining, and troubleshooting the software. 

In the same vein, SaaS applications typically offer less customization than on-premises software offers. Other drawbacks to SaaS include security, ownership/control of data, and reliability; business operations are dependent on the ASP's stability and are sometimes subject to their security vulnerabilities and data policies.

Examples of SaaS

SaaS applications have become more prevalent in recent years and the trajectory for their growth is only expected to rise. Examples of SaaS applications include:

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