Software as a Service (SaaS) is a model of software distribution whereby software applications deployed as a hosted service and accessed over the Internet via a standard web browser.

In the Software as a Service model above, customers subscribe to applications, typically on a per-period basis. In this pay-as-you-go method, customers are afforded a flexible, low-cost, no-hassle model so they can concentrate on running their core business rather than spending capital to purchase applications and time/resources on software patches and updates.

ISPs and ISVs revenue-share the resulting subscription fee paid by the end-user customer.