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A SaaS application, i.e. “Software as a service”, is also referred to as “On–Demand software”. To explain in simple terms it can be defined as a software delivery model where the data and the respective software are centrally hosted. End users who use the web browser and a thin client base generally access them. It is considered as a part of the Cloud Computing nomenclature.

In the recent times, Cloud Computing has brought in alterations in the manner in which businesses deliver and develop software. IT giant using SaaS application tools assists their clients and customers to establish adaptable and dynamic product support services. This is done with the usage of environments that can house smaller projects sprints, better collaboration and “on-the-fly” configurability. These applications use the IaaS, which is Infrastructure-as-a-service and Paas, which is Platform-as-a-Service

According to Gartner “SaaS sales went up to $9 billion in 2010, which is a rise of 15.7 per cent from what it was in 2009. In 2011 it is estimated to increase up to $10.7 billion, which is going to be 16.2 per cent more than what it was in 2010.” The group also puts forward that SaaS applications development that contributed a little above 10 per cent of the entire software enterprise market previous year, would signify software sales worldwide by 16 per cent by 2014.
SaaS solutions are generally designed on a “multi-tenant” architectural format. In order to support the scalability, this is installed on several machines, specially known as horizontal scaling. This model uses one single version of SaaS application and one single configuration for the customers. Sometimes however a second version is established in order to provide a selection of users the access to the Mobile application development pre-release version. This is mainly for experimental purposes. It is a contrast to the conventional software where numerous physical software copies with various configurations and versions are often installed all over different customer sites.
On the other hand, there remains certain SaaS application there does not operate on multi tenancy or other mechanisms, like virtualizations.
Today, SaaS application is the most used delivery model for majority of business processes. This includes collaboration, accounting, human resource management invoicing, enterprise resource planning (ERP), customer relation management (CRM), service desk management, content management and many others. It has been successfully incorporated into the business strategy of all famous software enterprises.