SaaS is the concept of the Global Village
SaaS is any software application that you run that is not located on
your premises. It is a full-blown application, not a component part of
something else. It is not a way to build applications. It is not a
plug-in to other applications. It is never something that sits on your
machines. Instead of having the application running on servers and data
storage in your data center, it is running in the vendor's data center.
Software is not the program but the service
The way SaaS applications are licensed is different from on-premise
applications. Instead of buying the license to use the application, and
then paying for software maintenance to support it and keep it current,
you "rent" the software over a period of time - usually monthly or
yearly. Instead of buying and installing infrastructure and then paying
ongoing operating and maintenance costs, the vendor runs the application
on their infrastructure.
Cost is not the matter of worry but the opportunity
The cost of the SaaS application covers the
costs of the software itself and the ongoing operations and
infrastructure costs. When you run a SaaS application, you generally log
into your vendor's web site and you are on. You can say that SaaS
applications are running "in the cloud," and you would be correct.