Software as a Service (SaaS) can be simply defined as "Software deployed as a hosted service and accessed over the Internet". It is a software deployment model in which a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires.
Generally software companies develop the application and install it at the client side. In this case the company who is going to use the software has to maintain the web servers or application servers and also need to buy licenses for all the supporting softwares like operating systems, anti-virus applications, etc. This also implies that either the client will have to do the maintenance of the application (like upgrading to new version, apply patches, maintain databases etc.) or the maintenance of the application will be out sourced to the other service provider company. It is also possible that the service provider company could be the same company who has developed the application.
SaaS model is different from above scenario. In this model, SaaS service providers maintain all the web servers or application servers and also buy licenses for all the supporting softwares. The clients just have to use the hosted application over internet as a service and pay the SaaS vendor for annually or for the time period they have used that service.
A very simple and well known example of SaaS model is web hosting service providers. Web hosting companies work on SaaS model. They maintain the web servers, database servers, etc. and also buy licenses for all the supporting softwares. If one want to host a web site then he/she just need to buy the required web space and upload his/her website. The web hosting will charge some amount against that service monthly or annually.
Benefits of SaaS model:
- IT infrastructure costs can be trimmed across the enterprise
- A more powerful and secure IT infrastructure. Organizations can match the infrastructure and security investments made by SaaS vendors
- Improved management of IT talent
- No Maintenance Fees, like no more paying network consultants to build a network, network technicians to maintain it, expensive hardware and more.
- Faster implementations and outsourced expertise dramatically lower risk
- Minimal effort needed to plan and execute implementations
- Corporate standards and version compatibility are more easily ensured
- Significant reduction in local resource allocation can be realized
- Easier mobility and scalability can be ensured
- A simple, cost-effective upgrade path can be rolled out