Typically a Software is either an Application software or a system software. An application software is meant for humans and is developed to solve a specific problem or a purpose. For example Microsoft Word is an application that is meant for Data Processing. System software on the other hand is a software that is meant for machines and is developed to interact with machines. Application softwares usually work with system software to form an useful solution. For example a printer driver is a system software and interacts with a printer and a computer processor. An application software such as Microsoft Word uses these drivers to print a document.
Software development companies over the years have developed generic application software as well as customized software. Taking the Microsoft Word example again, it is a generic software that can be used by anyone to process documents. However there are times when generic software cannot fulfill everyone's requirements. This is where customized applications come in handy.
Over the years, there are millions of software applications used by consumers and enterprises. The latest trend that is fast catching up is the SaaS which stands for Software as a Service. This simply means that the end user does not buy the software licence but simply pays a subscription to a provider who hosts this software in a remote location.
Take the example of Microsoft word again. SaaS providers now offer Hosted Microsoft Office as a hosted service. These SaaS providers get bulk licenses from Microsoft and in turn charge a small subscription to end users to access Microsoft office applications over the internet. The end user just needs to subscribe to the vendor's service and connect via Internet to access these applications.
The only assumption here is that the broadband connectivity is available to the end user always and consistantly. This is not the case in most part of the countries. However, in future this may be a reality as more and more fibre to the home is implemented in different countries and consistant internet connectivity is available everywhere.