A SaaS Vendor is an Independent Software Vendor (ISV) providing an application to customers for use as a service on-demand.  A SaaS vendor may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires.

SaaS Vendor examples include SalesForce.com, NetSuite, Workday, RightNOW, SAP Business by Design, Success Factors, which provide business applications online that are accessed from a web browser, while the software and data are stored on the servers.

The SaaS Vendor is favoured by customers because much of the burden of building and operating computer systems in order to run applications is removed.  The SaaS Vendor is also favoured because of the agility offered both in terms of on-demand service and because the need to invole the IT department is reduced.

The SaaS Vendor is also popular with customers due to the offer of the zero capital expenditure solution, which avoids the need for the up-front expense of software licence purchase.

A SaaS Vendor usually provides service in return for monthly subscriptions, based upon the number of users or and/or user consumption.  This enables the SaaS Vendor to establish a predictable, ongoing revenue stream.