What is SaaS?
Definition
Software as a Service — a software distribution model where applications are hosted in the cloud and accessed via subscription rather than installed locally.
Understanding SaaS
SaaS has revolutionized how software is delivered and consumed. Instead of buying software outright and installing it on your computer, SaaS products are accessed through a web browser and paid for on a subscription basis. Examples include Google Workspace, Salesforce, Slack, and Notion.
Benefits include automatic updates, accessibility from any device, lower upfront costs, and scalability. The global SaaS market is valued at over $195 billion.
Related Terms
Subscription
A recurring payment arrangement where a customer pays at regular intervals to access a product or service.
Cloud Computing
The delivery of computing services — including servers, storage, databases, and software — over the internet on a subscription or pay-per-use basis.
Recurring Billing
An automatic payment system that charges a customer at predetermined intervals for ongoing access to a product or service.
Freemium
A pricing model that offers basic features for free while charging for premium features, storage, or usage beyond free tier limits.