Research on Software-as-a-Service has received an increasing attention. However, most of the existing literature focuses on the general business model, its adoption and diffusion or on the technological implementation. The impact potentials on a process level and especially on development processes have rarely been analyzed. The objective of this paper is the impact analysis of the key characteristics of the Software-as-a-Service concept on development processes of Software-as-a-Service vendors. For this purpose, Software-as-a-Service definitions in research publications will be analyzed to extract the key characteristics of the concept. These are subsequently evaluated against their development process impact. Implications for the software and service development processes are derived to form a basis for an assessment of current methodologies. The results suggest the need for a continious process of software development and service operations actvities with a close linkage between the functions and high customer involvment. The service character challanges the development-focused methodologies and the Software-as-a-Service marketing concepts push for a continious flow of enhancements. The centrality of the vendor controlled infrastructure advances the information quality of development decisions by offering possibilities to evaluate user behavior within the system. The current methodologies are, however, not able to cover the new requirements and opportunities.