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SaaS(Software As AService) Software that is rented rather than purchased. Instead of buying applications and paying for periodic upgrades, SaaS is subscription based, and upgrades are automatic during the subscription period. When that expires, the software is no longer valid.
Ideal for Cloud Computing
SaaS can be implemented with local applications that expire after a certain time, but it is ideally suited for cloud computing and applications that run in any desktop or mobile device, no matter the OS. In this model, the applications are maintained in the provider's datacenter, and every time users launch their browsers or apps and log on, they get the latest version. In addition, user data can also be stored in the cloud.
This approach has long been touted as the wave of the future, many believing that local applications will be history down the road. However, legacy architectures tend to last longer than expected, and the road could be long. See cloud computing, XaaS, Web application and ASP.