Software as a service referred to “on-demand software” is a software delivery model in which software and associated data are centrally hosted on the cloud.So Application or Software is hosted on the remote servers and Customer’s employees can login into those remote server and use the application.Administration and maintenance is done by the provider.Its like renting a Apartment using it.So company need not to invest in setting up the servers and administration for the application.They get completely hosted application for use on Web or Cloud.
Suppose a company need a ITSM application.Either they can go any buy a software and host it and employees can use it.Or they can rent a SAAS based ITSM solution.It can save investment on infrastructure and maintenance.
SaaS applications are typically accessed by users using a thin client via a web browser.
Unlike traditional software which is conventionally sold as a perpetual license with an up-front cost (and an optional ongoing support fee), SaaS providers generally price applications using a subscription fee, most commonly a monthly fee or an annual fee.
Since data are being stored on the vendor’s servers, data security becomes an issue.
SaaS applications are hosted in the cloud, far away from the application users. This introduces latency into the environment; so, for example, the SaaS model is not suitable for applications that demand response times in the milliseconds.
Some business applications require access to or integration with customer’s current data. When such data are large in volume or sensitive (e.g., end users’ personal information), integrating them with remotely hosted software can be costly or risky, or can conflict with data governance regulations.
Relying on an Internet connection means that data are transferred to and from a SaaS firm at Internet speeds, rather than the potentially higher speeds of a firm’s internal network.
Organizations that adopt SaaS may find they are forced into adopting new versions, which might result in unforeseen training costs or an increase in probability that a user might make an error.