What Is SaaS? Software as a Service Explained for Beginners

By Lisa Park Jul 11, 2026 7 min read Business Software

Software as a Service (SaaS) has transformed how we use software. Instead of buying and installing programs, you access them through a web browser on a subscription basis.

What Is SaaS?

SaaS is a software delivery model where applications are hosted by a provider and accessed over the internet. Users pay a recurring subscription (monthly or yearly) instead of a one-time license fee. The provider handles maintenance, updates, security, and infrastructure. Examples include Google Workspace, Microsoft 365, Salesforce, Slack, and Zoom.

SaaS vs Traditional Software

Traditional software: buy once, install locally, manage updates yourself, pay for upgrades. SaaS: subscribe, access through browser, automatic updates, always latest version. SaaS reduces upfront costs but increases long-term expenses. Traditional software has higher upfront costs but no recurring fees.

Benefits of SaaS

Lower upfront cost (no hardware or license purchases). Automatic updates and security patches. Access from any device with internet. Scalability (add or remove users easily). No installation or maintenance. Built-in backup and disaster recovery. Integration with other SaaS tools through APIs.

Drawbacks of SaaS

Ongoing subscription costs can exceed perpetual license costs over time. Requires reliable internet connection. Data is stored on third-party servers (privacy concerns). Limited customization compared to on-premise software. Vendor lock-in makes switching providers difficult. Less control over updates and feature changes.

Common SaaS Applications

Communication: Slack, Microsoft Teams, Zoom. Productivity: Google Workspace, Microsoft 365, Notion. CRM: Salesforce, HubSpot, Zoho. Project Management: Asana, Trello, Jira. Finance: QuickBooks Online, Xero, Stripe. Marketing: Mailchimp, HubSpot, SEMrush.