When you want to add two numbers you use a calculator. The calculator is providing you a 'service'. The calculator provides facilities to enter the numbers that you wish to add and presents you with the result.

When you want to send a letter you use the 'Postal Service'. The postal service consists of picking up the envelope from a designated place, the Post Box and delivering it another place, by forwarding it through a particular route, whose address is mentioned on the envelope.

The postal service we say follows a 'Protocol'. So, if you wish to use the service, you need to put your envelope (letter) in a post box, mention a valid address on the envelope (with the Postal Index code - Pin code). There is a pin code for each region in which the service is offered.

The Courier service offers the additional facility of pickup and uses a different forwarding system, the courier service also offers proof of delivery (which was a special facility in the Postal Service called 'Post with acknowledgement due')

The postal service is for 'Communication'. The calculator is a tool (an aid) to do an arithmetic operation faster or to perform an operation that you do not know how to do.

Software as used in this article refers to a computer program and its associated data.

Software is a tool in general terms. Different Software serves as tools for different purposes. An email Software serves the purpose of composing, sending, receiving and replying to electronic mail. Email services similar to their ancestral postal services follow protocols. The email address has a particular format, like a pin code which was for a particular region; the email address directly refers to the 'mail box' of a user of the email service. Emails we say are sent from one mail box to another via an email server

Email service is not Software as a Service (SaaS). Email services are provided using Software which are called 'Applications'

Applications are Software tools that perform pre-defined operations; operations that are intended for a particular purpose or need. Examples of Application Software include, the Word processing application – Microsoft Word; the spread sheet application – Microsoft Excel.

Software applications are typically 'Software Products', they are built with an intention to serve the requirements of a specific community of users. They are bought and sold like any other commodity. In business terms we buy and sell software; we buy Oracle Database Server, Windows Vista, MS Office, etc. There are agencies that sell and customers who want it.

I buy a photocopying machine and provide the service of 'making copies of printed documents'. Like vice I can buy Microsoft Word and provide Desk Top Publishing (DTP) services. I am using a machine or software to offer a service. In the preceding examples, the 'Service Provider' is in human form, taking the assistance of a machine or software.

If the 'Service Provider' is software, taking the assistance of machines, software or humans, then the service provided is 'Software as a Service'.