Springboard Research defines Software as a Service (SaaS) as a delivery model in which an application is delivered to users via a web browser. Users typically do not buy the software license, only the right to use it by paying a subscription-based fee. A user may subscribe to all the features/functionalities of the SaaS application or just some of them. We have also referred to the SaaS model as On-Demand Software and On-Demand Applications. The key characteristics of SaaS are:

• The software resides on a central server and not on customers’ machines. The user accesses the application via the network using a web browser. The SaaS provider is responsible for the performance of the software.
• The primary value associated with SaaS is the continuous and ongoing support for the application delivered by the service provider. Network-based access enables maintenance, support and upgrades to the software from the data center. The SaaS provider is responsible for software maintenance and upgrades.
• The software application is usually not owned by the customer, and is only rented for use.
• The architecture of the application typically mimics the one-to-many model (e.g., multi-tenant design). While this is not true in all cases, on average it is cheaper and more convenient for the vendor to manage customers in the one-to-many architecture to bring down the cost of management, which the vendor can pass on to the customer.

Enterprise software applications delivered as SaaS include customer relationship management (CRM), web conferencing and collaboration applications, HR applications like talent management and payroll, enterprise resource management applications like ERP, supply chain management (SCM), and product lifecycle management (PLM).