Glossary
What Is SaaS (Software as a Service)?
Definition
SaaS (software as a service) is software hosted by the provider and used online through a browser or app, paid for by monthly or yearly subscription instead of a one-off licence.
How SaaS works
The provider runs the software on its own cloud servers and handles updates, security and backups. Customers sign up, log in and pay a recurring fee per user or per plan.
Examples of SaaS
Slack, Shopify, HubSpot and Notion are all SaaS products. Many SaaS products are multi-tenant, meaning one system serves many customers with their data kept separate.
Why businesses build SaaS
Recurring subscription revenue is predictable, updates reach every customer at once, and the product can be sold worldwide without installation.