Software as a service is a software authority and delivery model in which software is certified on a subscription basis and is centrally hosted. It is also referred to as “on-demand software”. SaaS is usually accessed by users using a thin client via a web browser. SaaS has become a popular delivery model for many business applications, including office & messaging software, DBMS software, CAD software, management software, development software, virtualization, customer relationship management (CRM), and service desk management. SaaS has been incorporated into the approach of all leading enterprise software companies. One of the biggest selling points for these companies is the capability to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider.
The term “software as a service" (SaaS) is treated to be part of the nomenclature of cloud computing.
Software as a service basically extends the idea of the ASP model. The term SaaS, however, is commonly used in more specific settings:
Whereas many initial ASPs focused on managing and hosting third-party independent vendor’s software, as of 2012 SaaS vendors generally develop and manage their own software.
Whereas initial ASPs offered more traditional client-server applications, which need installation of software on users' PCs, SaaS solutions rely mainly on the Web and only require a web browser to use.
The characteristics mentioned are common among many SaaS applications:
Configuration and customization
Like conventional enterprise software, a single customer can change the set of configuration options that disturb its functionality. Each customer may have its own settings for the configuration options. The application can be personalized to the degree it was designed for based on a set of predefined configuration options.
Open integration protocols
Since SaaS applications cannot access a company's internal systems, they mostly offer integration protocols and APIs that operate over a WAN. Typically, these are protocols based on HTTP.
The presence of SaaS applications and other Internet services has produced development of mashups, which are lightweight applications that combine data, functionality and presentation from multiple services, creating a compound service.
As a result of extensive fragmentation in the SaaS provider space, there is an emerging trend towards the development of SaaS Integration Platforms (SIP). These SIPs permit subscribers to access multiple SaaS applications through a common platform. They also offer an opportunity to quickly develop and use new applications. This trend is being termed as the "third wave" in software adoption - where SaaS moves beyond standalone applications to become a complete platform.
Compatibility with hardware, software and operating systems
Maintenance and support
Licensing and compliance problems