Software as a service

Software as a service (SaaS ) is a cloud computing service model in which a provider delivers application software to clients while managing the required physical and software resources. SaaS applications are accessed via either a web application or locally-installed software. Unlike other software delivery models, SaaS separates "the possession and ownership of software from its use." The use of SaaS began around 2000, and by 2023 was the main form of software application deployment. SaaS products typically run on rented infrastructure as a service (IaaS) or platform as a service (PaaS) systems, including hardware and sometimes operating systems and middleware, to accommodate rapid increases in usage while providing instant and continuous availability to customers. SaaS customers have the abstraction of limitless computing resources, while economy of scale drives down the cost. SaaS architectures are typically multi-tenant; usually they share resources between clients for efficiency, but sometimes they offer a siloed environment for an additional fee. Common SaaS revenue models include freemium, subscription, and usage-based fees. Unlike traditional software, it is rarely possible to buy a perpetual license for a particular version of the software. There are no specific software development practices that distinguish SaaS from other application development, although there is often a focus on frequent testing and releases.

Cloud computing

Infrastructure as a service (IaaS) is the most basic form of cloud computing, where infrastructure resources—such as physical computers—are not owned by the user but instead leased from a cloud provider. As a result, infrastructure resources can be increased rapidly, instead of waiting weeks for computers to ship and set up. IaaS requires time and expertise to make use of the infrastructure in the form of operating systems and applications. Platform as a service (PaaS) includes the operating system and middleware, but not the applications. SaaS providers typically use PaaS or IaaS services to run their applications. Without IaaS, it would be extremely difficult to make an SaaS product scalable for a variable number of users while providing the instant and continual availability that customers expect. Most end users consume only the SaaS product and do not have to worry about the technical complexity of the physical hardware and operating system. Because cloud resources can be accessed without any human interactions, SaaS customers are provided with the abstraction of limitless computing resources, while economy of scale drives down the cost. Another key feature of cloud computing is that software updates can be rolled out and made available to all customers nearly instantaneously. In 2019, SaaS was estimated to make up the plurality, 43 percent, of the cloud computing market while IaaS and PaaS combined account for approximately 25 percent.

History In the 1960s, multitasking was invented, enabling mainframe computers to serve multiple users simultaneously. Over the next decade, timesharing became the main business model for computing, and cluster computing enabled multiple computers to work together. Cloud computing emerged in the late 1990s with companies like Amazon (1994), Salesforce (1999), and Concur (1993) offering Internet-based applications on a pay-per-use basis. All of these focused on a single product to seize a high market share. Software as a service evolved from the earlier Application Service Provider (ASP) model of the late 1990s. While ASPs typically hosted individual applications for customers, SaaS providers increasingly delivered standardized applications over the Internet on a subscription basis, reducing the need for organizations to install and customize software on their own infrastructure. Customer relationship management (CRM) software became one of the earliest successful SaaS markets, with companies such as Salesforce demonstrating the commercial viability of the model. Beginning with Gmail in 2004, email services were some of the first SaaS products to be mass-marketed to consumers. The market for SaaS grew rapidly throughout the early twenty-first century. Initially viewed as a technological innovation, SaaS has come to be perceived more as a business model. By 2023, SaaS had become the primary method that companies deliver applications. Popular consumer SaaS products include all social media websites, email services like Gmail and its associated Google Docs Editors, Zoom, Dropbox, and entertainment products like Netflix and Spotify. Enterprise SaaS products include Salesforce's customer relationship management (CRM) software, SAP Cloud Platform, and Oracle Cloud Enterprise Resource Planning.

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