SaaS stand for Software as a Service.   The term Software as a Service falls within the subject area of Cloud Computing and is sometimes accompanied by the terms Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).  Unlike traditional software which comes packaged in a box (“shrink wrapped”) on CDs and needs to be installed on each user’s computer, SaaS is a software delivery model in which the software, and usually the data, are hosted “in the cloud”.  This means that users can access the software via a web-browser without having the application install on their computer.  For software that uses or supports client specific data and information, this data is typically persisted in the cloud as well and is accessible by users after logging into their account.

Some of the more common disciplines in which SaaS has become the predominate software delivery model are accounting, customer relationship management (CRM), ernterprise resource planning (ERP), human resource management (HRM), content management systems (CMS), and collaborative software including file sharing software and project management software.

SaaS has several advantages over the more traditional “shrink wrap’ software delivery model.

1. Feature Update Delivery: SaaS software is typically updated more frequently (often on a weekly or monthly basis).  This is possible due to the central hosting and management of the software.  This means the new features can be delivered to clients more rapidly.
2. Collaboration: Saas software is typically more suited to support features requiring greater user collaboration.
   
3. Pricing: Traditional “shrink wrap” software usually has a large, upfront licensing cost per user/seat, with an optional ongoing support fee.  This means that when licenses are purchased there is a large expense all at once to the business. Software as a Service is typically priced on a Monthly or annual subscription cost.  This evens out the expense to the business owner a bit.