Software-as-a-service (SaaS) is an alternative to installing and maintaining software on an in-house infrastructure. Instead of having ECM, ERP, CRM or any other business software installed on a server at your location, it is installed at outsourced data center. Users anywhere in the world can access the software via a secure Internet connection and use it as if it were on your network. SaaS providers generally charge a monthly fee and may have additional charges based on the number of users and the amount of data you store. Though there may be a start-up fee, SaaS solutions don't require an upfront capital investment.
Some companies choose SaaS solutions because they don't have the network infrastructure to support an enterprise solution or their current IT resources are already overburdened. However, many companies that have the resources still choose SaaS because outsourcing non-core business functions is part of their business model. Other companies have simply found that the software that best meets their needs is deployed via the SaaS model.
There have been many misconceptions about the functionality and security of SaaS solutions. SaaS solutions are very flexible and configurable and can offer a user experience that is equal to an in-house solution. Because these service providers rely on customer satisfaction and they can take advantage of the economies of scale, SaaS providers offer high levels of uptime and state-of-the-art data center security. Most are validated by third-party auditors and provide service level agreements that outline the steps they take to protect your data and ensure availability.