What is Software as a Service (SaaS)?

Software as a Service (SaaS) are applications that are hosted on cloud by cloud service provider that are available for users to access via internet using a web browser. Google Apps, Microsoft Office 365 are some examples. Not only that, you can host a customized applications like Billing and Invoice Systems, CRM (Customer Relationship Management) Applications, Help Desk Applications etc.
Google Apps (SaaS)

Unlike traditional software, SaaS applications licensing is very cheap. SaaS applications provide license as a subscription fee, usually charged monthly or annually. SaaS applications do not need special hardware or software maintenance. SaaS applications can be updated easily, because it is hosted on cloud, when the application is updated, updated application is available for every user atonce.

But if you lost internet connection, you wont be able to use SaaS applications since SaaS applications are accessed using internet. As all the data is stored in the cloud, there’s security vulnerabilities. Swiching between SaaS vendors are difficult too. those are the disadvantages of Software a a Service cloud model.