TLDR
SaaS is a model of software delivery where a company provides access to software applications over the internet.
Just a few years ago, to get a program you need for your work, you had to buy it on a disk in a store and install the software files on your computer by yourself. These actions caused hassle and implied the risk of malfunction and computer data losses.
Fortunately, technology is improving. With the advent of software as a service (SaaS), accessing the desired software products has become more convenient: you need to address a SaaS vendor.
What is a software as a service (SaaS)?
SaaS is a model of software delivery where a company provides access to software applications over the internet, usually through a subscription-based model. According to this model, the software is hosted by the SaaS provider, meaning the user does not have to install or maintain the software on their own device.
How does it work?
SaaS is accessed through a web browser or a dedicated application, and users typically pay a monthly or annual fee to use the software. Examples of SaaS applications include customer relationship management (CRM) software, project management tools, accounting software, and productivity tools like Google Workspace.
SaaS has become popular because it allows companies to quickly and easily access the software they need without having to worry about installation, maintenance, or upgrading the software. It also offers flexibility regarding the number of users who can access the software and the ability to scale up or down as needed.
After making a purchase, the user can access the resource they need directly through the browser or the application programming interface. In addition, the seller of the SaaS application provides support, giving all the necessary instructions on how to update the program and work with it.
Why choose SaaS?
You don’t need to purchase additional devices when working with the SaaS model. All expensive hardware and its management are external – users interact with software as a service via the network. There is no need to download or debug anything; no licensing or software support is required. But there are also SaaS on the market that you can buy and install on your computer.
One of the main advantages is that there is no need to change anything on your computer and worry about the settings. All responsibility for the operation of the software lies on the provider of the service or the data centre, and technical support is always ready to give advice.
Other benefits include:
- constant maximum software performance;
- cost savings — payments for using the software as a service are lower than for traditional software purchasing, especially when it comes to the simultaneous operation of multiple computers;
- it is impossible to buy some specific programs (especially those providing growth in SEO). They are only available in the form of SaaS applications.
Typically, SaaS application providers offer several different billing plans. But as soon as the software is no longer needed, businesses and private users can stop paying.
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Disadvantages of SaaS
The list of advantages of software as a service is very long, but this system also has certain disadvantages:
- you have to pay for the use of the service regularly;
- your service provider or their data centre may experience specific performance issues that might affect your work;
- if a service provider updates its software version, you have to accept the update and sometimes retrain your staff;
- changing your SaaS service provider can be challenging as you must move large amounts of data to another location.
How to choose the right software as a service provider?
It would be best to scrutinise all your business needs and research to find a reliable SaaS application provider. To understand if a particular provider suits you or not, pay attention to the following questions:
- How can it be integrated?
- Will it require additional efforts, like development or customisation, on your end?
- Is it compatible with all browsers and devices?
- Does it support your full data migration?
- Is it scalable? Will it support your business growth and comply with all regulations if your project expands abroad?
- If things go wrong and you decide to quit, what’s the exit strategy?
Related terms
Go deeper
- Case study
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How a digital subscription business replaced its billing platform with payment infrastructure.
- Blog post
Embedded payments for platforms: models, implementation, and what to expect
Why SaaS providers increasingly build payment acceptance directly into their product.