Definition as per Wikipedia: 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 do not pay for owning the software itself but rather for using it.

Software as a Service (SaaS), also known as software on demand, is an innovative model which revolutionizes the delivery of software products and its usage. Conventionally, software products were bought by the customers and were installed on their desktops or in their enterprise. This model has some inherent drawbacks for both the user as well as the product companies. Following are the benefits of SaaS model:

	There’s no software to manage, fix, upgrade, etc. All that is the responsibility of the vendor. Customers get a semi-custom application without having to hire developers and people to keep it running.
	If the vendor doesn’t meet your needs, there usually is no long-term commitment and it’s easy to switch. This keeps SaaS vendors responsive.
	Better licensing and cost control: The user can use the service in a subscription mode; user can make one time payment for a stipulated amount of time.
	Assurance of the most recent version of application is in use.