What does SaaS mean?
SaaS stands for software as a service. Instead of buying and installing a program, customers log in through a browser or app and pay a recurring fee. The provider runs the software, stores the data, applies updates and keeps it available.
Familiar SaaS examples include Salesforce for customer records, Slack for team chat, Zoom for video calls and Shopify for online stores.
What is a SaaS application?
A SaaS application is the product itself. It usually has four traits, and they are what separate it from a typical website or internal tool.
- Many customers, one system
- Customers share the same running software while their data stays separate. This is called multi-tenancy.
- Recurring billing
- Plans, trials, upgrades and renewals are part of the product.
- Self-service accounts
- Customers can sign up, invite colleagues and manage their own settings.
- Continuous updates
- Every customer gets improvements without installing anything.
SaaS, PaaS and IaaS
These three cloud models differ by how much the provider handles for you.
- IaaS
- Infrastructure as a service: rented servers, storage and networks. You manage everything above them.
- PaaS
- Platform as a service: a managed place to run your code. You write the application, and the provider runs the platform.
- SaaS
- Software as a service: a finished application. You simply use it.
What SaaS development involves
Building the features is only part of it. A SaaS team also designs tenant separation, connects a billing provider, builds an admin console and sets up monitoring, backups and repeatable releases.
It also continues after launch. Because you are selling an ongoing service, keeping it secure, available and improving is part of the product.
Why companies build SaaS products
For the seller, subscriptions bring recurring revenue, and one codebase can serve many customers. For the buyer, there is little to install, and costs start low. The trade-off is that the seller takes on the ongoing responsibility for uptime, security and support.
Common questions
Is SaaS the same as cloud computing?
SaaS is one form of cloud computing. Cloud computing also includes the infrastructure and platforms that SaaS products run on.
Who owns the data in a SaaS product?
That depends on the contract, though customers normally own their data and the provider processes it for them. Your terms should say so clearly.
Is a mobile app SaaS?
It can be, if it is sold by subscription and backed by a centrally run service. Many SaaS products offer both web and mobile apps.
Looking for help with this? See SaaS development.