Software as a Service (SaaS) is a distribution model for delivering software applications via a web browser. Customers can access offerings over the internet that are hosted by a third-party service provider. SaaS is a component of cloud computing that offers users the advantage of flexible use regardless of location and does not require local installation.
Like other cloud services, companies typically pay a monthly or annual fee for SaaS applications. SaaS providers usually charge for applications based on certain usage parameters, such as the number of people using the applications or the number of transactions.
Company examples: Salesforce, Microsoft, SAP, Oracle.