Software as a service (SaaS) is a delivery and licensing model in which software is accessed on the web via a subscription rather than installed on local computers.
With SaaS, companies need not manage applications or invest in hardware to run their applications. Instead, a provider hosts and manages the infrastructure to support software, which enables updates and patches to be applied automatically and universally and reduces the burden on a company's IT team.
According to a 2018 IDG study, 89 percent of companies use SaaS-based applications.
The SaaS model can reduce costs for IT infrastructure that would previously have hosted the applications. It can also minimize some of the time spent on management tasks, because a SaaS provider is responsible for upgrades and management.
The SaaS model often makes sense as various technology trends require faster, more agile, and on-demand architectures as well as more rapid software updates. Technologies that have fueled demand for SaaS include cloud computing and edge computing, 5G and Wi-Fi 6, Internet of Things-connected devices, collaboration technologies, mobility, and immersive experiences enabled by artificial reality (AR) and virtual reality (VR). These technologies can be data-hungry and compute-intensive, and require low-latency, high-performance infrastructure on which to perform.
Many business applications are now available in the SaaS model, such as email, sales management, customer relationship management, financial management, human resource management, billing, and collaboration applications.
There are numerous benefits for companies and users, including the following:
It is important to weigh the benefits of the SaaS model with an understanding of some downsides, including the following: