Software as a Service (SaaS) is a model of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device.1

Advantages of Software as a Service:

• Low cost way to use software as needed versus long term investment.
• Network based access.
• Feature updating which eliminates need for end-users to download patches and upgrades.
• Pricing based on hosting or subscription fee.
• Easier administration.

1 From Wikipedia (the free encyclopedia)