Software-as-a-service ( SaaS) is the software delivery innovation derived from the IT application innovation．It is also an innovation of software outsourcing for customers．SaaS is different from traditional software outsourcing in product form，pricing model，and delivery methods．This paper studies SaaS provider’and its customer’decision behavior，and its effect on expected profits influenced by their different market powers It is found that the overmatched market power does not impact the service quality，but the comparable market power will change the service quality effect factors．The surprising findings are that the total expected profit will increase when the SaaS customer own all the market decision right; when the demand quantity impact customer’s value，the surplus value，price and service quality will increase，and in certain circumstance，the total expected profit and SaaS provider’s expected profit will increase at the same time．Hardwares provided from IaaS can decrease the service price and warrant the service quality，furthermore，they will enlarge the demand quantity．The research will enrich the theoretical model of software outsourcing，and the con_x005fclusions will contribute to the development of SaaS and Cloud Computing．