What Is SaaS?
Author: Domeny.ForSale editorial team Published
In brief: SaaS (Software as a Service) is a model in which you use an application maintained by its provider, usually over the internet. Instead of installing and running software on your own server, you create an account and choose a plan — most often a subscription, although free versions also exist. The provider handles the application’s operation and updates, but you remain responsible for tasks such as configuring access and assessing whether the service meets your needs.
How does SaaS work in practice?
In the SaaS model, the application runs on infrastructure managed by the provider. You usually open it in a browser, although some services also have mobile and desktop applications. Data is generally stored by the service, allowing you to use the same account on different devices.
One example is an online customer relationship management system, or CRM. A salesperson logs in, adds a contact and records what was agreed during a conversation, while an authorised colleague can see that information in their own account. The company does not need to install the system itself or update its server.
SaaS describes how software is delivered, not what it is used for. Business email, invoicing tools, document editors, booking systems and online store platforms can all operate under this model. A subscription alone does not make something SaaS: locally installed software can also be sold on a subscription basis.
How does SaaS differ from software on your own server?
The main difference concerns the division of responsibilities. With a self-hosted installation, the company or an administrator it employs is responsible for the environment, updates and software maintenance. With SaaS, the provider takes over a substantial share of these tasks, but the user usually has less influence over the system’s technical operation.
| Area | SaaS | Self-hosted installation |
|---|---|---|
| Getting started | Usually creating an account and configuring it | Installation and environment setup |
| Updates | Deployed by the provider | Planned and deployed in-house |
| Costs | Most often recurring fees | Licence, infrastructure and administration, depending on the solution |
| Modifications | Within the service’s available features and integrations | Potentially broader, depending on the licence and access to the code |
| Control over the environment | Limited to the provider’s options | Greater, with greater responsibility |
Not every application available through a browser is SaaS. A company can run software on its own server and make it available to employees over the internet. Likewise, renting a cloud server alone does not give you a ready-to-use SaaS service — someone still has to install and maintain the application.
When does SaaS make work easier, and when does it impose limits?
SaaS can be a good choice when you need to get a standard process, such as handling bookings, up and running quickly and do not want to maintain your own IT environment. It also makes work easier for teams using an application in different locations. Expanding access often comes down to adding accounts, although this may increase the bill.
One limitation is dependence on the provider: its availability, pricing, development direction and decisions about feature changes. A service outage or internet connection failure may prevent you from working; only some applications offer an offline mode. Nor is it always possible to postpone an update or keep the existing interface.
Example: a small salon that needs an appointment calendar and customer reminders may choose a ready-made service rather than commission a separate system. However, if its booking process requires unusual rules, it should first check whether the application supports them. A low subscription fee will not help if employees have to work around limitations manually every day.
How do you calculate the true cost of the service?
The price shown on the website often applies to a particular billing option. The fee may depend on the number of users, data storage space, number of orders, messages sent or features used. Additional costs may include implementation, data migration, training and integration with other systems.
Compare offers using the same scenario: how many employees will use the application, which features are essential and what level of usage you expect. Calculate the cost at a larger scale separately. An introductory promotional rate does not reflect the expense once your team grows.
Confirm current prices, limits and billing rules in the provider’s official price list and terms and conditions. In particular, check whether the quoted amount requires a year’s payment in advance, whether it includes taxes and when you can reduce the number of paid accounts.
What should you check before entrusting your data to a provider?
SaaS security depends both on the service’s safeguards and on how it is used. The provider may protect the infrastructure, but it cannot prevent every user error, such as granting overly broad permissions. Before purchasing, check:
- Access: are user roles and multi-factor authentication available — in other words, an additional login verification step beyond a password?
- Data recovery: what backups are made, and can accidentally deleted information be recovered?
- Business continuity: what support and availability commitments does the provider state it offers?
- Leaving the service: can you export your data in a useful format, together with the necessary attachments, and how much time do you have to do so after cancellation?
If the application will process personal data, you also need to assess the processing terms, including the appropriate agreement and any transfers outside the European Economic Area. This is general guidance, not individual legal advice; requirements depend on the data and how the service is used.
Before paying for a longer subscription, run a trial using fictitious data: complete a typical task, grant access to a second person and test the export. This test will help you assess not only how easy it is to get started, but also whether you can switch tools later.
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