In SaaS, distribution refers to the channels through which a product is sold to a customer. It's the entire process of delivering a cloud-based software to end-users, whether directly from a company or through a network of intermediaries and encompasses all the different routes a product can take to reach its destination.

Distribution can be done through direct selling or selling through intermediaries, which are often referred to as distributors.

Direct distribution is when the vendor sells the software directly to customers through a website, sales team, or other owned channel.

Indirect distribution involves partnering with third-party distributors or resellers who act as middlemen, taking the product to market and reaching customers they might not be able to access on their own. While this can expand reach, it also means sharing revenue and giving up control over the whole customer experience.

Both direct and indirect distribution can be used as part of an overall distribution strategy.