What is Software as a Service (SaaS)? Meaning & Examples

SaaS software has been gaining traction worldwide. Here’s what Software-as-a-Service (SaaS) and why they are becoming popular:

Software-as-a-Service (SaaS) is a special type of cloud computing that offers software and its associated infrastructure to users via their internet browser. SaaS has been gaining traction worldwide over the last decade and will continue to expand its share in the modern software market for the foreseeable future.

Many governments, education, engineering, and finance sectors utilize SaaS in their day-to-day operations. This software delivery method is favored because it offers many advantages over traditional on-premise software.

This guide will examine “What is Software-as-a-Service”, its various benefits, and the different types of SaaS software available today.

Understanding SaaS Meaning

What is SaaS Software-as-a-Service

Market Trends: The global SaaS market has a mean annual growth rate of 21%, making it one of the fastest growing markets in the tech sector in 2022.

SaaS Global Market Size Growth Rate:

SaaS Global Market Size Growth Rate

[image source]

Expert Advice: SaaS’s success can be attributed to the advantages it offers over traditional software delivery. This includes reduced time for benefits, lower delivery costs, scalability and integration, and ease of upgrading.

FAQs About Software as a Service (SaaS)

Q #1) What is Software as a Service (SaaS)?

Answer: Software-as-a-Service (SaaS) is a method for delivering applications via the internet. This SaaS definition is broad because it encompasses the wide variety of SaaS that exists today. Modern businesses may utilize a number of SaaS in their daily operations due to the many benefits they offer.

Q #2) What is SaaS software good for?

Answer: SaaS software offers many advantages over traditional software. One of the core benefits of using SaaS is that it does not require installation and can therefore be accessed from devices that would normally lack the memory and processing power required to run the entire software.

Suggested Reading =>> SaaS Companies review

Q #3) Where is SaaS hosted?

Answer: SaaS resides in a digital cloud that is hosted and maintained by virtual servers. This setup allows SaaS to be delivered to customers over the internet without them having to download the application. SaaS providers often maintain a network of servers with enhanced security to ensure SaaS remains available for clients at all times.

Q #4) What is the SaaS pricing model?

Answer: The SaaS billing model charges customers on a periodic basis. This could be a monthly or annual charge. Customers may also be charged a higher or lower amount depending on the number of users that will use the application.

Some SaaS providers may charge customers using a pay-as-you-go model where they are charged based on the volume of resources they use within a given time period. Prospective businesses should understand how they will utilize their chosen SaaS before selecting a pricing method that is more economical for them in the long run.

Q #5) Is SaaS software customizable?

Answer: Many modern SaaS software offer customization capabilities. Users can implement some of these changes themselves, while others may need to be implemented by the software provider.

Q #6) Who owns the SaaS data?

Answer: Most clients and businesses retain ownership over their data. However, it is always best to review the software provider’s Service Level Agreement (SLA) to confirm data ownership and retrieval rights.

Q #7) What is B2B SaaS?

Answer: B2B SaaS is cloud-based software provided to other businesses. Such software is designed with business applications in mind rather than individual user applications.

Q #8) What is Software as a Service (SaaS) marketing?

Answer: SaaS marketing refers to marketing processes associated with promoting SaaS. This includes identifying a target market and acquiring leads.

SaaS Graphic

How does SaaS Software Work

SaaS utilizes a cloud delivery model to provide clients and businesses with their own software platform. The software provider may host the application and the data it contains on its own database, servers, and computing resources. Alternatively, they may contract a cloud provider to host the software and the platform’s data center.

Clients and businesses can then access the software using the internet, without having to download any applications onto their devices.

SaaS Security and Privacy

Businesses that adopt SaaS may be concerned about security breaches or issues related to maintaining their privacy. The reality is SaaS can be vulnerable in ways that on-premise software is generally not. However, modern SaaS providers have attempted to make such platforms more secure by implementing additional security features.

This includes:

#1) Enhanced Authentication

One of SaaS’ main advantages is that we can access it from just about anywhere as long as the user has internet access. However, this also means unauthorized individuals may gain access to a business’s SaaS and their data.

For example, a hacker who possesses a company employee’s SaaS login credentials may log onto the application and view sensitive business data.

Modern SaaS providers combat this problem by implementing enhanced authentication. This includes multi-factor authentication, OpenID Connect, and Open Authorization. Such security features reduce the likelihood of unauthorized individuals gaining access to SaaS without compromising access to authorized individuals.

#2) Improved Data Encryption

Modern SaaS providers reduce the likelihood of data breaches or spying by using encrypted channels for data communication. Such channels feature Transport Layer Security (TLS) to add an additional layer of protection for in-transit data.

SaaS vs Cloud

Users who are unfamiliar with SaaS may believe they differ from cloud-based software. However, they are one of the same. In fact, SaaS is one of three types of cloud-based services. The other two are Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS).

Each of these services is hosted on a digital cloud and does not require the computing power or physical memory that on-premise software requires.

SaaS vs. IaaS Vs. PaaS

SaaS, IaaS, and PaaS differ in a number of ways. Each type is described below:


Software-as-a-Service refers to application software. Users typically pay an annual or monthly fee to access this software from their device’s web browser or desktop client. Some types of SaaS can also be accessed from mobile devices.

SaaS providers typically host application software, storage, middleware, and networking infrastructure for the software. This allows clients to use SaaS as needed without having to worry about the aforementioned components.


Infrastructure-as-a-Service refers to computing infrastructure hosted on the cloud. This includes components such as storage, servers, and networking resources that businesses can access as needed.

Clients can utilize IaaS if they would like access to high-end computing infrastructure capabilities, but without acquiring the hardware required for them. Google Cloud, Amazon Web Services, and Microsoft Azure are some of the leading IaaS providers today.


Platform-as-a-Service refers to cloud-based platforms for creating, operating, and managing applications. The PaaS provider typically hosts, operates, and maintains the various hardware and software used to prop up the platform. This includes operating system software, servers, networking, databases, and storage.

IBM Cloud, Red Hat OpenShift, and Good App Engine are some of the most popular PaaS providers today. Their platforms allow customers to create, deploy, test, and update applications quickly and without requiring expensive high-end hardware.

Types of Software-as-a-service (SaaS)

There are numerous types of SaaS available in the current year. Each of these offers an easy-to-access platform for businesses and users that require certain software capabilities.

Most SaaS falls into one of the following categories:

#1) Customer Relationship Management Software (CRM)

Most businesses in the modern era rely on customer data to achieve certain goals, such as promoting products and increasing sales. CRM software offers a platform for managing this data easily.

Modern CRM software organizes data in an easy-to-access manner. Some may also include analytical tools that help the business forecast product sales. However, they are primarily used to automate otherwise repetitive tasks, such as sending out promotional emails or data mining.

#2) Project Management Software

Project Management Software helps streamline operations and improve cooperation with management teams. They keep information in a centralized location that managers can access with login credentials. This makes them great for monitoring business operations and keeping tabs on any crucial performance indicators.

Business owners that utilize project management software such as SaaS can keep a tab on their operations while they are on the go as they do not need to download the software for each device they access it on.

#3) Enterprise Resource Planning Software (ERP)

Large companies with many divisions often utilize Enterprise Resource Planning Software for long-term planning and with managing different business processes. This includes processes such as compliance, budgeting, risk management, and accounting.

Modern ERP combines all these processes and makes them available on one platform. This gives business owners and management staff the ability to draw data from different areas before utilizing them in business planning tasks.

#4) Content Management Systems (CMS)

The Content Management System serves as a platform for editing and publishing content online. This includes content such as blog posts and articles. Most CMS SaaS are geared toward businesses that publish online content frequently. This makes them useful in the digital era, where businesses must maintain their online presence to attract and nurture leads.

#5) Payment Gateways and Billing

Payment gateways offer a platform that enables businesses to process payments quickly and with ease. They are vital for businesses that may need to handle hundreds or even thousands of transactions per day.

Modern payment gateways, such as Paypal, have offered SaaS for businesses worldwide for many years. These gateways offer a trusted payment portal that businesses can access from just about anywhere with internet access.

#6) Accounting Software

Accounting software helps streamline a business’s financial operations and components, such as costs and expenditures through automation. They are especially useful for businesses that perform numerous financial tasks each day.

Accounting software SaaS comes with a wide range of features. Users can create bills, invoices, and spending reports with just a few clicks. This makes it easy for business owners and managers to generate detailed accountability reports for investors and other key individuals.

Benefits of Switching from On-Premise Software to SaaS Software

SaaS offers many advantages over on-premise software for users and businesses. This includes:

#1) Cost Reductions

SaaS is touted as being more cost-effective for a number of reasons. It eliminates upfront purchase and installation costs that businesses would normally need to bear when acquiring on-premise software. SaaS users will also be free from maintenance and upgrade costs as SaaS will automatically be updated and maintained from the provider’s end.

Businesses can also save on hardware costs as they won’t need to invest in computers with high processing power or large hard drives. This is made possible because the server the SaaS is hosted on takes care of processing and storage functions.

#2) Better Time Management

Businesses can save time by adopting SaaS. As mentioned earlier, SaaS does not require installation and can be readily accessed through a web browser. This means businesses won’t need to spend hours installing new software if they choose to upgrade their system with a fleet of new computers.

SaaS providers also help businesses save time by performing maintenance and updates themselves. This means businesses do not need to suffer through downtime as their software is maintained and upgraded. They can reap the benefits of using the latest version of the platform without spending time and resources on updating processes.

#3) Greater Compatibility

SaaS eliminates many of the compatibility issues that come with software installation. This is thanks to the fact that SaaS is accessed through web browsers and does not need to be downloaded.

Businesses that adopt SaaS can also guarantee that each device they are accessing the software through is running the same version. This gets rid of compatibility issues and makes it easier to share information across the business.

#4) Easy Backup and Recovery

Traditional software, such as Customer Relationship Management Software, is required to store large quantities of valuable data. This data must be backed up regularly to ensure it is accessible in the future. However, this backup process can be time-consuming and may force the business to shut down its operations while this task is performed.

The SaaS provider works around this issue by performing backups automatically on behalf of their clients. This ensures the data is available at all times and is at less risk of being lost.

#5) Improved Security

Modern SaaS is designed with security in mind. The average SaaS provider may install multiple security layers to ensure the business’s data is kept safe. This safety is also enhanced because the business using the SaaS won’t be storing their data on-site where it could potentially be stolen.

Some risks still exist if an unauthorized person obtains the login credentials for the SaaS. However, the SaaS provider can still track where the software was accessed and help the business determine the extent of any breach that has occurred.

#6) Scalability

SaaS offers greater flexibility compared to traditional software. Businesses that use pay-as-you-go pricing can choose which features they would like to use and adjust their software budget depending on their exact needs. This means they scale their operations up or down easily as their business grows and evolves.


SaaS offers many advantages over traditional software and is quickly becoming the norm in many industries. Such software expands business operation capabilities and brings them up to speed with the digital era while simultaneously saving time and costs.

Consider adopting SaaS for your business operations if you would like to get a better view of your operations, make financial planning and forecasting easier, and complete content creation and publishing tasks with ease.

Research Process:

  • Time is taken to research this article: It took us 5 hours to research this article on SaaS meaning and delve into its various types and benefits