The concept of SaaS stands for “Software as a Service.” It speaks to cloud-based software applications that users access via the internet, usually through a web browser. Under the SaaS model, the service provider centrally hosts the software application’s code, databases, and other backend components. Users essentially “rent” the right to access and use the software on an ongoing basis without having to install anything locally.

That contrasts with traditional software models where companies purchase licenses and install programs onto individual computers or an on-premises server. Upgrading to new software releases under traditional models means proactively buying the latest licenses. With SaaS applications, the cloud provider automatically handles updates behind the scenes so users access the latest version without needing IT involvement.

Cloud capabilities enable SaaS providers to configure multi-tenant architectures which support thousands of organizations using the same core application codebase. Customer data remains siloed so no sensitive information is shared across companies. Multi-tenancy drives operational efficiencies for the SaaS provider to pass along savings to subscribers via affordable monthly or annual subscriptions.

Since users only need an internet connection and web browser, SaaS enables easier administration than traditional on-premises software with hassles like managing runtimes, storage, servers, and compatibility conflicts across user devices. Users can access  solutions conveniently from any device, anytime.

Widely used examples of SaaS applications include messaging, document sharing, accounting, collaboration tools, customer relationship management, human resource information systems, billing, expense reporting, learning management systems, project management tools and more. Even fully featured productivity suites like Google Workspace and Microsoft 365 now rely on such delivery.

SaaS offers simpler scaling to allow usage fluctuations, predictable costs without large upfront licensing fees, and offloading of technical management burdens. These advantages have fueled growth across companies of all sizes and industries. The market is forecast to continually expand as cloud delivery models dominate business software applications moving forward.