The buzz surrounding the concept of “Software as a Service” (or SaaS, as it’s more often called) is getting pretty loud.

Similar to the concept of “Web 2.0″, SaaS is, according to Wikipedia, “a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it.” (Quoted from Wikipedia’s page on SaaS as it appeared on Tuesday, November 20, 2007.)

In simpler language, SaaS is a means of renting out software rather than selling it. It’s appealing to customers because they have a much lower price to pay, and they don’t have to worry about installation or maintenance. The advantage to companies is significant, as well, because they can focus on development and implementation more than packaging and merchandising.

Salesforce.com is widely acknowledged to be the company that’s carrying the torch for this new innovation. It may not be the first business to offer SaaS, but it’s definitely leading the pack among those companies actively carving out a new market niche for the concept.

And the media is taking notice. Actually, industry-focused media have been reporting on the trend for years — Aplus.Net’s own Senior Vice President of Worldwide Sales, Clarke Caines, was interviewed by CompareWebHosts.com earlier in 2007 on this very topic.

But now the mainstream media is reporting on the trend on a much larger scale. A recent article from The New York Times runs down the history of SaaS while also hailing Salesforce.com as its ringleader:

In the late 1990s, Salesforce was one of a group of start-ups exploring ways to capture a share of the lucrative business software market using the leasing model, also called “software as a service” and “on-demand computing.”

The leasing model, its supporters say, permits companies to avoid the expense and headache of installing complex software packages that typically require huge outlays of cash for hardware and software upgrades.

“It’s all about letting our customers pay attention to innovation and not infrastructure,” Mr. Benioff said. “Software as a service is about freeing them from having to hook up another computer in another data center to another database to another application server to another security server.”

In the battle for a share of business software dollars, Mr. Benioff chose to focus on customer relationship management tools, a relatively small corner of the market. Such software would help sales representatives track customers and potential customers.

“C.R.M. seemed a perfect place to start and prove our concept,” he said.

(Read the entire New York Times article here.)

The story above is just one more sign of the increasing momentum behind this movement. What do you think? Is SaaS indeed the wave of the future, and will it change the way business is done? That certainly doesn’t seem as far-fetched anymore as it once might have. Feel free to share your comments below.