Software as a Service (SaaS)

Software as a Service (SaaS)

Software as a service is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software".

The remote hosting, management and support of software applications for a service provider's customers over the internet or a private network. Derived from the Application Service Provider (ASP) model, SaaS consists of a one-to-many arrangement allowing a vendor to host the same version of a standard Software product for use by multiple customers. Because of the uniformity of the distributed software, SaaS is generally most useful for more standardized software applications, like email, word processing, customer relationship management and accounting.

SaaS arrangements are usually paid for on a metered, pay-per-use basis. However, this is not the only payment model, and some SaaS vendors may charge start-up fees or upfront subscription charges, for example, to pay the costs of third-party software licensing charges. 
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