Software as a Service (SaaS) is all customers using same version of software hosted by vendor. They enjoy the service instead of owning it. By contrast, software distribution is customer owned the purchased software. It can be hosted on services providers data center (Cloud) or on client’s premises.

Below is the comparison.

	Software as a Service	Software Distribution
Hosted	Cloud	Cloud	Owned Servers
Model	Multiple customers access to single instance	Single customer and customer owned the instance	Single customer and customer owned the instance
Software Accessible	Internet	Internet	Internet Local Area Network
Software Customization	No	Yes	Yes
Application Support	Email Support	Additional cost based on agreement	Additional cost based on agreement
Application Upgrade	Automatic	By request basis with additional cost	By request basis with additional cost
Risks on Server, Application and Database	Vendor hold all risks	Client and vendor share risks responsible	Client hold all risks
Implementation	Immediate	Slow and time-consuming	Slow and time-consuming