Software as a Service, or SaaS, is the model behind most business software today. Instead of buying software and installing it on your own computers, you reach it through a web browser and pay a recurring subscription. The provider runs it in the cloud, keeps it secure, backs it up, and updates it for everyone at once.
The upside is lower upfront cost, no maintenance burden, automatic updates, and access from anywhere. The trade-off is less control over the update schedule and a dependence on the vendor to safeguard your data.
Most SaaS is also multi-tenant, meaning many businesses share one running application while their data stays walled off from each other. That arrangement is what keeps capable software affordable.
See What Is Multi-Tenant SaaS? for the full explanation.