What is Software-as-a-Service (SaaS)?

Software as a Service (SaaS) is a model of cloud computing in which complete applications are hosted in the cloud (i.e. on the Internet) and offered to consumers on-demand.

SaaS users do not have to install, configure, or maintain any software locally, and simply pay for their use of the provided software on a pay-per-use or subscription basis. Meanwhile, the SaaS cloud provider takes on the burden of providing technical support, performing software and platform upgrades, and building and maintaining the behind-the-scenes infrastructure.

An inescapable downside to the SaaS model is that all user data (including potentially sensitive company data) is stored off-premises by a third party. SaaS providers typically address this concern by prioritizing security and maintaining high privacy standards, which often makes user data safer in the provider’s hands than on any local database.

Popular examples of SaaS providers include:

  • Slack (online team collaboration)
  • Google Apps (web-based email, cloud storage, calendar)
  • Microsoft Office 365 (document creation and collaboration)
  • Salesforce (CRM software suite)
  • Cisco WebEx (video conferencing)

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