Software as a service (SaaS)

• Organizations providing their members or employees with access to typical software applications such as office productivity or email.
• End users who directly use software applications, whether on their own behalf or that of their organization.
• Software application administrators who configure an application for end users.

A SaaS application usage agreement provides the right to use specific applications on demand, and application data management, such as backup and data sharing between consumers.

Usage fees are typically calculated based on the number of users (or "seats"), the time in use, per-execution, per-record-processed, network bandwidth consumed, and quantity/duration of data stored.Many SaaS companies structure their service offerings around a per-seat pricing model and offer varying tiers of service and features to meet the needs of different types of users.

SaaS applications are most useful in environments with reliable, low-latency networking with adequate bandwidth to import and export expected quantities of data and to facilitate smooth user interaction with the cloud-hosted software.

The software as a service delivery model can be applied to many classes of software applications:

• Business Logic. In this area, applications connect companies with their vendors, staff, investors and consumers. Examples include: Invoicing, transfer of money, inventory management, and customer relationship management (CRM)
• Collaboration. Applications in this sector help people's teams, either inside or between organizations, work together. Calendar systems, email, screen sharing, joint authoring of documents, meeting management, and online gaming are examples. These apps also provide teamwork capabilities in their SaaS incarnations which may be absent from conventional office productivity applications.
• Productivity. Applications in this sector implement applications such as word processors, spreadsheet programs, presentation programs, and database programs that typify office environments. These apps also provide teamwork capabilities in their SaaS incarnations which may be absent from conventional office productivity applications.
• Software tools. Applications in this area solve security or compatibility problems and support new software development. Examples include format conversion tools, security scanning and analysis, compliance checking, and Web development.

The software as a service delivery model can be applied to other types of software as well. An ongoing SaaS subscription may be required to operate certain types of hardware.

The National Institute of Standards and Technology (NIST) defined software as a service (SaaS) in its 2011 definition of cloud computingcloud computing: