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Software-as-a-Service (SaaS) is a category of cloud computing that delivers applications over the Internet. A SaaS provider hosts the applications and makes them available to its subscribers. Email, sales management, customer relationship management, financial management, human resource management, billing and collaboration are a few examples of popular SaaS applications. Leading SaaS providers include Salesforce, Oracle, SAP, Intuit and Microsoft.

Businesses use SaaS to lower their IT costs, as it reduces the expenses of hardware acquisition, application provisioning and maintenance, software licensing, installation and support. Rather than purchase software and the hardware that it runs on, customers pay a monthly subscription to a third-party provider. SaaS makes software a recurring and predictable operating expense in a pay-as-you-go model that allows customers to terminate their applications at any time. Some potential disadvantages to SaaS include service disruptions, security breaches, inaccurate usage tracking or billing, and unwanted changes to the software. For these reasons, customers must understand their SaaS provider’s service level agreements in detail.

Like other cloud services such as Platform-as-a-Service and Infrastructure-as-a-Service, Software-as-a-Service offers the scalability to add or subtract software features on demand. In most cases, customers pay only for the features they use. The SaaS provider takes care of application updates and patch management, so customers are automatically using the latest version of the software. Because applications are delivered over the Internet, users can access them from any location, on any Internet-enabled device. With SaaS, IT organizations need not worry about developing apps to run on different types of devices. Linux-based cloud computing solutions such as SUSE OpenStack Cloud deliver OS-agnostic applications to businesses with mixed IT environments.