Software as a Service or SaaS is a software distribution model in which application softwares are hosted by a vendor or service provider and made available to customers via a network, basically the internet. SaaS is closely related to the ASP (application service provider) and on demand computing software delivery models. Software as a Service service providers typically use a multi-tenant architecture, which means that multiple customers runs the same software, but with a virtually separate data. Software as a Service is prevalent in areas such as Customer relationship management, Video Conferencing, Human Resources, IT Service Management, Accounting, Email, etc. Benefits of using SaaS model are easier administration, automatic application updates and patch management, easier collaboration, global accessibility, etc. Today SaaS is a very effective software distribution model, because here customers do not pay for owning the software itself but rather for using it. Current generation of Software as a Service is termed as SaaS 1.0 and the emerging generation will be called as SaaS 2.0 (a new study by Saugatuck Technology). As per Saugatuck Technology, SaaS 2.0 will deliver more secured, flexible and efficient business processes and workflow.

1. In 2000/2001 Software as a Service became prominent as per SIIA Trends Report 2000
2. The global Software as a Service market reached US$6.3 billion in 2006 (according to Gartner, Inc.)
3. Software as a Service market will be worth $10.7 billion by 2009 (International Data Corporation)
4. 10 million companies will use Software as a Service worldwide in the next 5-10 years
5. Worldwide enterprise application Software as a Service revenue to reach $11.5 billion by end of 2011 (Gartner Inc.)
6. The oldest and biggest Software as a Service provider is Automatic Data Processing, Inc.
7. 12 percent of U.S.-based companies have at least one major Software as a Service application installed (survey by Saugatuck Technology)