What Is Software-as-a-Service (SaaS)?

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Software-as-a-Service (SaaS)Software-as-a-Service (SaaS) describes a model where customers license a software application provided by and outsides vendor. In return, as Gartner states, “a customer gets a software based on one set of common code and data definitions.” Depending on the vendor’s payment program, users can access the software at any time. Think of SaaS like an online bank application allowing customers to pay bills, deposit checks, and figure out taxes. The software reduces the need for consumers to write checks or deposit slips and secure money, because the bank provides this. SaaS is now considered much more secure and uses data assets effectively. SaaS integrates multiple data streams, such as social media and information from the Cloud.

Other Definitions of SaaS Include:

  • Software providing an economical Cloud-based solution to serve a customer’s business needs. (Mary Shacklett, TechRepublic)
  • A “preferred method for delivery of enterprise applications.” (Alison DeNisco Rayome, TechRepublic)
  • Software applications accessible from a centrally hosted Cloud, offered to customers on a subscription basis. (MorganStanley)
  • “A rental model that allows you to purchase enterprise software without paying giant upfront license fees.” (Steve Banker, Forbes)
  • A software distribution model in which applications are hosted by a vendor or service provider and made available to customers over a network, typically the internet. (Weber State University).
  • “Access to applications that are owned and managed by a vendor, are hosted in the cloud, and accessed by users with web-based technology such as a browser or smartphone app.” (UC Berkley).
  • “A business model whereby software is centrally stored and licensed on a subscription basis.” (Panos Mourdoukoutas, Forbes)

SaaS Examples Include:

  • Multnomah County Library provides access to the Health Reference Center, a compilation of 1,700 journals, newsletters, etc., to library patrons.
  • An oil company uses Oildex to manage financial operations and collaborations across supply chains.
  • Microsoft updates give Windows 10 users additional security and functionality.
  • A police department uses Axon Enterprises to store, analyze and use camera footage.

Businesses Need SaaS to:

  • Improve networks.
  • Upgrade computers less.
  • Have more plug-in and use options available.
  • Support more devices, especially as laptops, cellphones, etc., age.
  • Drive down implementation costs.


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