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An application is any program, or group of programs, that is designed for the end user. Application software can be divided into two general classes: systems software and applications software. Applications software (also called end-user programs) include such things as database programs, word processors, Web browsers and spreadsheets. Figuratively speaking, applications software sits on top of systems software because it is unable to run without the operating system and system utilities.
A hosted application is a software as a service (SaaS) solution that allows users to execute and operate a software application entirely from the cloud on a recurring subscription. Hosted applications are hosted and powered from the remote cloud infrastructure and are accessed globally through the Internet.