Under the Software as a Service model, service providers sell customers access to and use of application software and databases. The infrastructure, platforms or operating systems, and often the granular details of the software are concealed from the customer, who would typically connect to the service via a client program or web browser. The customer is not responsible for maintaining the hardware or resources, instead paying a per-user or per-use fee to the service provider to maintain access to the most up-to-date version of the software. This pricing model means that costs are flexible and scalable, allowing users to be added or removed as necessary, and shielding the customer from the capital expenditure normally required to establish new platforms, infrastructure, and licenses for software.
Software as a Service generates approximately two-thirds of the revenue of the cloud computing market. Although revenue growth for SaaS is not expected to slow greatly in the near future, its share of the overall cloud services market is expected to decline in the face of cloud platform and infrastructure services growth.
In the Software as a Service market, the largest companies are currently Salesforce, Microsoft, Adobe, SAP, Oracle, and IBM. While Salesforce is one of the current leading vendors of cloud infrastructure services, the market is presently less concentrated than the cloud infrastructure segment.