Software as a service (SaaS) allows users to connect to and use cloud-based apps over the Internet. Common examples are email, calendaring, and office tools (such as Microsoft Office 365). SaaS provides a complete software solution that you purchase on a pay-as-you-go basis from a cloud service provider.

SaaS applications are also known as: Web-based software. On-demand software. Hosted software. As the name suggests, SaaS transforms software from a product that's purchased — a commodity that you buy once and download to your device — into a service that's rendered: a set of capabilities that you subscribe to. Simply said, it is software that you rent on a monthly basis, but never actually own.