The term “cloud” is essentially a representation for Internet and Business / marketers have further commercialized the phrase “in the cloud” to refer to software, platforms and infrastructure that are sold “as a service”, i.e. remotely accessible through the Internet. Typically, the service providers has actual energy-consuming servers which host products and services from a remote location, so end-users don’t have to install anything and they can simply log on to the network to access the services. These cloud services may be offered in a public, private or hybrid network.

The major models of cloud computing service are known as below

• Software as a service (SaaS)
• Platform as a service (PaaS)
• Infrastructure as a service (IaaS)

Some more additional service categories were talked frequently in today’s cloud computing market and those are listed below.

•    Storage-as-a-service
•    Database-as-a-service
•    Information-as-a-service
•    Process-as-a-service
•    Application-as-a-service (SAAS)
•    Integration-as-a-service
•    Security-as-a-service
•    Management/governance-as-a-service
•    Testing-as-a-service

SaaS, PaaS and IaaS services are having same characteristics and delivery / service options and only difference between these three services are who manage what services. Below process flow will explain clearly how the services are managed by service providers and clients (customers).
Software as a Service (SaaS)

SaaS is a model where an application is hosted on a remote data center and provided as a service to customers across the internet. In this model the provider takes care of all software development, maintenance and upgrades.

Service provider also provides support to maintain the data center and Customers use the software application using a browser.
SaaS Pros

• Stay focused on business processes and all maintenance and upgrade can be taken care of service provider
• Change software to an Operating Expense instead of a Capital Purchase, making better accounting and budgeting sense.
• Create a consistent application environment for all users.
• No concerns for cross platform support.
• Easy Access of your required software / application through browser anywhere in the world.
• Reduced piracy of your software.
• Lower Cost for an affordable monthly subscription and Implementation fees are significantly lower.
• Continuous Technology Enhancements.

SaaS Cons

• Initial time needed for licensing and agreements
• Trust or the lack thereof, is the number one factor blocking the adoption of software as a service (SaaS).
• Centralized control for all clients / customers.
• Possible erosion of customer privacy
• Absence of disconnected use due to multiple level of access from different client.

Imagine when you use SaaS service you would have below benefits by avoiding some of the process in your software services.

•    Where you don’t have to buy new hardware or update software.
•    Where you pay nothing or pay as much as you use.
•    Where everything is done as a service: Infrastructure, computing, storage and usage.
•    Where you don’t worry about your resources spent on Infrastructure security and operational security.
•    Where you can cut your IT spending cost by 99%.
•    Where you have freedom of usage from anywhere with internet connectivity.
•    Which is Eco-friendly.

How SaaS services are different from traditional software services?

SaaS – Designed from the outset up for delivery as Internet-based services.
Traditional Software Services – Designed for customers to install, manage and maintain.

SaaS – Designed to run thousands of different customers on a single code.
Traditional Software Services – Architect solutions to be run by an individual company in a dedicated instantiation of the software.

SaaS – Frequent, “digestible” upgrades every 3-6 months to minimize customer disruption and enhance satisfaction Version control.
•    Fixing a problem for one customer fixes it for everyone

Traditional Software Services – Infrequent, major upgrades every 18-24 months, sold individually to each installed base customer
•    Version control
•    Upgrade fee

SaaS – May use open APIs and Web services to facilitate integration, but each customer must typically pay for one-off integration work.

Traditional Software Services – Streamlined, repeatable functionality via Web services, open APIs and standard connectors.

Below are some SaaS Service Providers logos:

SaaS services are drastically changing the traditional software market. Click here.

Wiki reference for additional details of Cloud computing service provider.