Your users want enterprise grade software at customer level prices. The SaaS development model can make that happen
Using software on a disc that is maintained by in house IT department on self owned servers is now passè.
Companies, both large and small are increasingly using the pay as you go model where all kinds of software- billing, CRM, customer service etc- is hosted on the cloud and operated by third parties.
This frees them up from concentrating on core business functions. If you are a software service provider, especially a startup, adopting the SaaS model can be a savvy business move.