SaaS offers numerous options for gaining efficiencies and reducing costs.

Consistent with the basic notion of cloud computing, SaaS is a model whereby the customer organization licenses applications from a service provider and provisions them to its users as needed. The applications run on the service provider’s infrastructure and are accessed through a public network connection. They may be made available through the Internet as browser-based applications, or they may be downloaded and synchronized with user devices.

SaaS applications are centrally managed and updated. Typically, they are highly standardized, although they may vary in configurability, efficiency, and scalability. The most common pricing model is a subscription plan based on the number of users, but there may be additional fees for transactions, bandwidth, storage, and processing time.

There are many similarities between SaaS and the services offered by application service providers (ASPs) popular a few years ago. But there are also stark differences, namely in terms of technology, operations and billing, multitenancy, pay-as-you-go pricing, and the ability to provision on demand.

SaaS offers numerous options for gaining efficiencies and reducing costs.