SaaS is a software distribution model in which applications are hosted by a provider and made available over the Internet.
Organizations don’t have to invest in extensive hardware to host the software, and this in turn, allows SMBs to outsource most of the IT responsibilities typically required to troubleshoot and maintain the software. The SaaS provider takes care of it all.
How do I choose between SaaS and on-premise?
SaaS also differs from on-premise software in its pricing model. On-premise software is typically purchased through a perpetual license, which means buyers own a license to the software. They also pay 15% to 20% per year in maintenance and support fees.
SaaS, on the other hand, allows SMBs to pay an annual or monthly subscription fee, which typically includes the software license, support and most other fees. A major benefit of SaaS is being able to spread out costs over time.