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Desktop-as-a-Service (DaaS) is characterized as a cloud computing solution that delivers virtual desktops to end-users. In this model, the virtual desktop infrastructure (VDI) is hosted off-premises and managed by a third-party service provider. This arrangement allows organizations to leverage the benefits of virtualization without the complexities of maintaining the infrastructure themselves.

The outsourcing to a third party means that the service provider handles everything from the hardware and storage, to security, updates, and backups, providing organizations with a streamlined experience. Users can access their desktops from various devices, enhancing mobility and flexibility, while also helping businesses to reduce capital expenditure on hardware.

The other options do not accurately reflect the essence of DaaS. The definition highlighting management by the organization itself refers to traditional VDI setups rather than DaaS. Installing software on local machines contradicts the very concept of delivering desktops as a managed service through the cloud. Finally, while DaaS can be seen as a cloud application service, it is specifically tied to providing virtual desktop environments rather than a broader category of applications. Therefore, outsourcing and third-party management are key aspects that uniquely define DaaS.