In plain English
It's renting a fully furnished office instead of buying a building. You move in, someone else fixes the roof, and you pay monthly for as long as you stay.
Used in a sentence
“You're already paying for five SaaS tools that do overlapping jobs; one connected system would replace three of them.”
“Every time the SaaS company raised prices, we had no choice but to pay.”
In detail
SaaS runs in the browser or an app, with the company behind it handling servers, updates, security and backups. You pay per month or per user, start quickly and stop when you like. Most business tools today are SaaS, from accounting to booking to email.
The trade-offs are control and cost over time. Your data lives in someone else's system, features are what they decide, and subscriptions add up as a team grows. Many businesses do well mixing SaaS for standard jobs with custom software for the parts that make them different. See custom software or off the shelf.
Why it matters for your business
SaaS gets you running quickly; knowing its limits helps you decide when something built for you is better.
- Quick to start
- Updates and security handled
- Subscriptions add up over time
Easy to mix up
SaaS isn't the same as cloud storage or hosting. SaaS is finished software you use; hosting and cloud services are the infrastructure software runs on.
Related terms
API, CRM and Web app. Or browse the whole glossary.
