Software as a Service is a type of software delivery where the vendor provides a fully managed hosted service allowing customers to access the software over the internet.

In this simplistic definition, most web sites and application service providers fall into the SaaS model. There are also a few service desk vendors now trying to catch up with web based offerings. However, this is very different from delivering software as a service. As Microsoft put it:

“For independent software vendors accustomed to building on-premise enterprise software, this is like moving from the minor leagues to the majors: the rules may be familiar, but the game is played on an entirely different level.”

Established service desk vendors cannot offer customers the benefits of the SaaS model simply by offering web-based add-ons for their existing applications. Even developing a fully featured web-based version isn't enough.

You have to look behind the scenes.

In order to pass on the cost savings and other benefits to the customer, the application needs to be designed from the ground up to meet the criteria of the SaaS model.

These facts become very clear when you consider what the benefits actually are.