SaaS (Software as a Service) is a licensing and delivery model of software. With SaaS, the software is licensed on a subscription basis and is centrally hosted. As the world is becoming more cloud-based, you can imagine how profitable the SaaS industry has become.
Because the model is subscription based, the upfront cost is much lower than traditional software set up, but opportunities exist to charge for extra functionality or per transaction or other event. And because the SaaS model offers consistently updated software, users can enjoy their software without the need for mandated ongoing support or manual updating.
The SaaS model has no physical need for distribution. Because all of the software is cloud-based and delivered almost instantly, this industry has cut out the middleman, making software service faster, less expensive, and much more convenient for users. SaaS has been incorporated into nearly all—if not all—leading enterprise software companies.