In simple terms, SAP HANA EXtended Application Services Advanced Version (usually referred to as SAP HANA XSA or SAP HANA XS Advanced) is an application layer on an SAP HANA database that enables the development of native HANA-based web applications—without the need for an additional application server.
Extended Application Services Advanced is an application server that is built into Hana. This optimizes data movement and brings the logic to the data (2-tier architecture without a dedicated application server). XSA supports developers by providing them with the appropriate runtime environments for their tasks. Software development is strongly oriented toward SOA architecture. Furthermore, only the target image of a development is defined, not the development path to it, since XSA acts like middleware and builds the corresponding classes and objects. XSA also manages all developed objects and applications.