Software as a service, or SaaS, is a software licensing and delivery model in which software is centrally hosted and licensed on a subscription basis. It can sometimes be referred to as “on-demand software” and was formerly referred to as “software plus services” by Microsoft.
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SaaS has become a common delivery model for many business applications, including payroll processing software, development software, CAD software, invoicing, human resource management (HRM), office and messaging software, customer service management (CSM) – which continues to be the largest market for SaaS – and much more. SaaS has been incorporated into the strategy of nearly all leading enterprise software companies.