Definition:

Software as a Service (SaaS)

Software as a Service or SaaS, is a software licensing and delivery model wherein a provider makes software available to customers over the Internet through a software subscription or as an on-demand service.

SaaS offers customers the ability to use computer applications without the high cost of software programs. A software subscription nowadays costs only a fraction of hard copies of software programs. Software as a service can be accessed through a thin client via a web browser or a mobile app. A thin client is a lightweight computer that remotely connects with a server. It does not have a hard drive.

Software as a Service has become a common delivery model for many business applications such as office software, messaging, payroll processing, management and staff monitoring software, CAD software, gaming software, virtualization, accounting, invoicing, geographic information, content management and many more.

SaaS is now incorporated into most of the world’s leading companies like Microsoft, Google, Apple, MailChimp, Shopify and even lesser-known providers such as Salesforce, Service Now, Paycom, Dropbox, Wix, Zoom, etc. Google owns three of the most popular SaaS businesses – Google Tag Manager, Google Analytics and G Suite; and then, of course, there’s Google Cloud.

The business of offering Software as a Service has grown exponentially, reaching revenue numbers of $85 billion at the end of 2019. Experts predict that SaaS will further grow to $157 billion in 2020. It is also expected to gain another $60 billion between 2020 and 2023. A software subscription has several advantages. It can lower the cost of software for everyone.

When using a software service, customers don’t just do away with buying an expensive product, they also don’t have to pay a license fee. It is much simpler to set up on a computer as opposed to installing a hard copy of a software program. Programs can be easily updated online. All one needs to run and use a software subscription is a browser and internet connection.