What is Software as a Service (SaaS)?

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Software as a service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is also referred to as “on-demand software”, “web-based software” or “hosted software”. SaaS is typically accessed by users using a thin client via a web browser and is considered to be one of the three pillars of Cloud Computing.

Instead of installing and maintaining software, customers simply access it via the Internet, thereby freeing themselves from complex software and hardware management. The provider manages access to the application, including security, availability, and performance.

SaaS provides a complete software solution which customers purchase on a “pay-as-you-go” basis from a cloud service provider. All of the underlying infrastructure, middleware, app software and app data are located in the service provider’s data center. SaaS allows an organisation to get up and running quickly with an app with minimal upfront cost.

There are many well-known examples of SaaS, including Office 365, Google Apps, Salesforce, Citrix GoToMeeting, Cisco WebEx and Netflix.

Some examples of where SaaS can be used by enterprises are as follows:

  • Accounting and invoicing
  • Tracking sales
  • Planning
  • Performance monitoring
  • Communications (including webmail and messaging)
  • Analytics

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