SaaS - intro from wikipedia

Software as a Service[@more@]

Software as a service (SaaS) is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers pay not for owning the software itself but for using it. They use it through an API accessible over the Web and often written using Web Services or REST. The term SaaS has become the industry preferred term, generally replacing the earlier terms Application Service Provider (ASP), On-Demand and "Utility computing".

Key characteristics of software delivered by SaaS

The key characteristics of SaaS software, according to IDC, include:^[5]

• network-based access to, and management of, commercially available (i.e., not custom) software
• activities that are managed from central locations rather than at each customer's site, enabling customers to access applications remotely via the Web
• application delivery that typically is closer to a one-to-many model (single instance, multi-tenant architecture) than to a one-to-one model, including architecture, pricing, partnering, and management characteristics
• centralised feature updating, which obviates the need for downloadable patches and upgrades.

SaaS applications are generally priced on a per-user basis, sometimes with a relatively small minimum number of users, and often with additional fees for extra bandwidth and storage. SaaS revenue streams to the vendor are therefore lower initially than traditional software license fees, but are also recurring, and therefore viewed as more predictable, much like maintenance fees for licensed software.