Software as a Service (SaaS, typically pronounced 'sass') is a model of software deployment where an application is licensed for use as a service provided to customers on demand. On demand licensing and use alleviates the customer's burden of equipping a device with every application. It also reduces traditional End User License Agreement (EULA) software maintenance, ongoing operation patches, and patch support complexity in an organization. On demand licensing enables software to become a variable expense, rather than a fixed cost at the time of purchase. It also enables licensing only the amount of software needed versus traditional licenses per device. SaaS also enables the buyer to share licenses across their organization and between organizations, to reduce the cost of acquiring EULAs for every device in their firm.

Using SaaS can also conceivably reduce the up-front expense of software purchases, through less costly, on-demand pricing from hosting service providers. SaaS lets software vendors control and limit use, prohibits copies and distribution, and facilitates the control of all derivative versions of their software. SaaS centralized control often allows the vendor or supplier to establish an ongoing revenue stream with multiple businesses and users without pre loading software in each device in an organization . The SaaS software vendor may host the application on its own web server, download the application to the consumer device and disable it after use or after the on demand contract expires. The on demand function may be handled internally to share licenses within a firm or by a third-party application service provider (ASP) sharing licenses between firms. This sharing of end user licenses and on demand use may also reduce investment in server hardware or the shift of server use to SaaS suppliers of applications file services.