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Software as a Service (SaaS)

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

Software as a service (SaaS) is a model for the distribution of software where customers access software over the Internet. In SaaS, a service provider hosts the application at its data center and a customer accesses it via a standard web browser.

There are a few major characteristics that apply to most SaaS vendors:

  • Updates are applied automatically without customer intervention
  • The service is purchased on a subscription basis
  • No hardware is required to be installed by the customer

SaaS is also known as hosted software or on-demand software.

Techopedia explains Software as a Service (SaaS)

SaaS is a natural evolution of software. The old model of getting physical DVDs and installing on local servers was the only realistic solution for many years. In fact, the client-server model is still required for many scenarios. That said, in recent years a number of developments have allowed SaaS to become mainstream. One factor is bandwidth; the internet is simply faster than it was a decade ago. Other major factors include the evolution of both virtualization and tools in big data. All these advances have made it much easier for providers to scale and manage their own infrastructure and thus provide SaaS solutions.

SaaS 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. There are literally thousands of SaaS vendors, but Salesforce.com is perhaps the best known example, as it is one of the first vendors to significantly disrupt a traditional software vertical.

SaaS is closely related to 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.

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